Indeed, investing is part of capitalism, but the question lies in making capitalism work better as a market-based economy, which has been often far from perfect. Therefore, as smart investors, we have to assess opportunities beyond the silo mentality by looking meticulously for risk reduction, performance and accountability and pushing for greater long-term impacts, which go hand in hand with good financial performance.

Women are one of the world's most undervalued resources. Half of the world population is female, yet only 51 percent of women participate in the labor force, compared to 83 percent of men. Indonesia’s figures are not very different: According to Statistics Indonesia (BPS), the labor force participation rate for women is 52 percent, against 82 percent for men.

The yawning gap only shows that there are still many economic "spaces" that women can fill and help increase economic productivity to Rp 28 trillion, according to Finance Minister Sri Mulyani Indrawati. The International Finance Corporation (IFC) report “Investing in Women” highlighted an Indonesian coffee trading company, one of the world’s largest, which boosted productivity by 131 percent when it developed gender-specific training after identifying the knowledge gap between men and women as the key barrier to growth.

However, to tap into this opportunity, much work remains in increasing women’s participation in the workforce and closing the 50 percent gender pay gap. On top of that, women entrepreneurs, as our economic backbone, receive a disproportionate amount of financial assistance and investment. For instance, women in South Asia received only half the COVID-19 financial aid than men did. The World Bank even stated that as a result, women-owned businesses were 5.9 percent more likely to face closure than businesses owned by men.

The gender issue has become more pressing in terms of access to jobs and finance. Higher investments and assistance are needed to ensure that women have the same opportunities in realizing their full economic and business potentials. Failing to address these challenges will only slow our economic recovery.

This has led to our focus on efforts to close the gap through gender lens investing (GLI). GLI is about not only investing in women or providing funds to women, but also using gender analysis in investment consideration and decision-making. This is not limited to investing in women-led enterprises and also includes investing in women-led supply chain start-ups and other start-ups that promote workplace equity.

Many philanthropic organizations refer to their programs that benefit women as gender lens philanthropy, or gender lens grantmaking. However, this is not gender lens investing, as these organizations primarily seek to make social impacts rather than financial returns.

On the other hand, gender lens investors are not particularly philanthropic; they seek financial returns, and they might be willing to accept below-market returns.

Put simply, GLI is one way to scale up investment in women through attractive financial tools for a wide range of investors, and not just philanthropists.

Applying the GLI strategy to your investment portfolio could be powerful. We are talking not only about addressing gender, but also about women in the economy as a whole. The impact on economic performance is significant, in that companies run by women have annual revenues 12 percent higher than companies run by men.

Various researches have found that companies and investees with gender-diverse boards will outperform by 48 percent their peers that have executive teams where women make up only 10 percent or less. Further, fund management firms with gender-balanced investment teams have 20 percent higher returns than their peers that do not.

In short, investors and investments with a relatively diverse gender and race makeup will have more complete information and hence, can make smarter investment decisions.

The gender lens investing ecosystem has been developing since 2013, when I was among the first to introduce a GLI fund in Indonesia, called the Angel Investment Network Women Fund, or ANGIN WF. The fund was established by 15 Indonesian women to support and invest in businesses led or owned by women entrepreneurs, or businesses use models that positively impact women.

In 2018, the total capital deployed through the GLI fund exceeded US$44.8 million. In addition, others have started to set up GLI funds, such as the recently launched Women’s Livelihood Bond of Impact Investment Exchange (IIX) in partnership with Partnering for Green Growth and the Global Goals (P4G), an example of public-private partnership in gender-smart climate investing.

Despite the benefits and growing trend, there is not enough regulatory support from the government to allow GLI to compete with conventional investment instruments, as opposed to the investment regulatory schemes in Singapore or Malaysia that provide tax incentives to attract more investment.

Likewise, Indonesian investment funds in are mostly driven by foreign funds. Although foreign funds bring a positive light to our investment climate, this reflects a lack of local investment funds that should be captured and channeled into GLI. The government can look for derisking tools to bring in more local investors, such as providing technical assistance so investors can tap into GLI, strengthening the equity share to downsize the debt-financed portion and hence, lower the risks.

Since investors have limited knowledge and awareness of GLI, organizations like the ASEAN Gender Network, which pools investors and philanthropists in scaling up awareness in gender lens investment and provides opportunities for collaboration, are important.

To execute and measure the effectiveness of GLI, there is a need for gender-disaggregated data and analysis across the funding process and fund life cycle. Hence, organizations like ANGIN will also be key in providing capacity building for GLIs, facilitating investment and scaling up the GLI network.

One GLI strategy involves investing in diverse management at the portfolio and fund management levels, where the real effort is also creating fully inclusive workplaces for the team. The Indonesia Business Coalition of Women Empowerment (IBCWE) has long been stepping up efforts in this area.

While GLIs could be truly transformational, it will take many years of hard work and facilitation to live up to expectations. Like the Chinese board game of Wei Qi, the goal is to build up investment patiently to achieve the desirable results by emphasizing long-term strategy, not short-term returns.

Keep in mind that gender-smart investing is an intersectional lens that presents both complex challenges and opportunities. Ultimately, the future of investment is already here, and if you have yet to invest in them, now is the time to start.

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The writer is CEO of Sintesa Group and founder of ANGIN.