Last Wednesday, International Women’s Day celebrated the massive impact that women have on every aspect of the economy and society across the World.
However, one area which still requires attention is ensuring that women, if they wish, are given every opportunity to become an entrepreneur and, more importantly, for their business to then be properly supported to create jobs and prosperity in their local communities.
In 2019, this critical issue was a subject of a major investigation chaired by the chief executive of NatWest Bank, Dame Alison Rose. The Rose Review was a long overdue analysis not only about the state of female entrepreneurship in the UK but, more importantly, what could and should be done to ensure that the entrepreneurial potential of women is maximised for the benefit of the nation. As the original report noted, £250 billion could be added to the UK economy if women matched men in starting and scaling businesses.
At the time, several specific recommendations were made to further enhance the support for women-owned businesses including promoting greater transparency in UK funding allocation, launching new investment vehicles to increase funding going to female entrepreneurs and encouraging UK based institutional and private investors to further support and invest in female entrepreneurs.
In addition, support for wider entrepreneurship policy initiatives were also encouraged including expanding existing mentorship and networking opportunities, accelerating the roll-out of entrepreneurship-related courses to schools and colleges, and creating a digital one-stop shop to provide information to entrepreneurs.
Four years later, it would seem that the situation has improved for those women starting and growing their own businesses.
For example, data shows that over 150,000 new companies were started by women last year, twice the number recorded when the original Rose Review was published. From a standing start, there are now more than 190 financial services organisations that have signed up to the Investing in Women Code which sets out a framework of best practice to improve the success of female entrepreneurs.
There are a growing number of awards and programmes that are helping to celebrate female entrepreneurship across the UK and more women are putting them forward for recognition. For example, 46 per cent of the entries to this year’s UK Startup Awards, which announced its finalists this week, were from businesses started by women.
Finally, the Rose Review and its partners created more than 800,000 opportunities to access schemes and support including networking events, mentorship and masterclasses.
However, in terms of access to funding for women-led businesses which was identified as one of the key issues in the original report, much remains to be done and there remains still a significant funding gap between male and female entrepreneurs that seems difficult to close.
For example, research showed that over half of female business leaders and entrepreneurs reported finding access to funding and investment hard in the past 12 months, compared to just over 40 per cent of their male equivalents. In addition, 44 percent of female leaders expected access to funding to become more difficult as economic difficulties become prevalent over the next few months.
That is completely unacceptable and if more women are thinking of starting a business, then they must be confident of getting access to the funding they need to develop their ventures properly. That is clearly not the case now for many female entrepreneurs.
Another key issue that holds back women from participation in entrepreneurship is that of caring responsibilities, especially for young children with a recent study from the OECD showing that UK nursery fees are the second highest in the world and take up one-third of the average wage.
Of course, this is not just an issue for those running their business and has been highlighted as a major drag on the finances of many working mothers. However, it is noteworthy that women are twice as likely as men to mention family issues as a barrier to starting a business and when women reach the age of 35, their participation in entrepreneurship falls considerably.
Therefore, the Rose Review is making good progress although more could certainly be done to accelerate the further involvement of women in new and growing businesses especially at times when the economy needs boosting.
Whilst private businesses, especially financial institutions, need to step up their efforts, there is also a significant role for the government to support this agenda.
Next week the Chancellor of the Exchequer will stand up in the House of Commons to deliver a budget speech which will hopefully focus on measures that will help grow the UK economy and provide support to businesses in doing so.
As he and his advisers spend the next few days in finalising the policies that will achieve, they would do well to break with tradition and rather than focus on gender neutral fiscal and economic initiatives and instead make a concerted effort to develop an approach that maximises the incredible potential of women-led businesses and provides them with the support they deserve.
