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Women's Enterprise- Some Facts and Figures
Supplied by Train2000
Contents
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What would the economy get out of increasing rates of female entrepreneurship?
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If more women-friendly business support was available how do we know that more women would use it?
Background Information
Whilst the gender gap in enterprise has been part of the economic development discourse for over twenty years and whilst evidence in the Global Entrepreneurship Monitor (2007) showed a growth in UK total entrepreneurial activity, there has as yet been no significant change in the position of women who are still around half as likely to be involved in business start-up activity as men. Independent start-up activity in 2005 was 3.74% of the female adult population compared with 6.17% amongst men (Minniti et al, 2006).
Women remain under-represented among the UK’s business owners. This means that there are many women in the UK who could be obtaining all the benefits that would come from running their own business but it also means that there is a very real loss to the UK economy. The UK, and its regions, are missing out on a major resource.
It is neither possible nor desirable to categorise all women owned business as somehow ‘different’ and in need of different treatment. However, the research shows that there are some issues that affect many women setting up their own businesses in specific ways and that some women find it difficult to achieve their full business potential in an environment that has been designed for a different model of entrepreneur. This following evidence has been gathered by the Department of Trade and Industry and provides an overview of the nature and scale of the problem and explores why it matters.
What evidence is there that women are under-represented in business ownership?
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Over half the working age population are women, but they remain under-represented in all forms of economic activity. In few areas is this worse than in business ownership:
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There are encouraging signs that entrepreneurial activity among women is increasing:
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Twenty years ago, fewer than 650 thousand women were self-employed - now there are more than 950 thousand self-employed women in the UK
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Total entrepreneurship activity (TEA) for women in the UK rose from 3.3 per cent in 2002 to 3.9 per cent in 2004
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But men are still twice as likely to set up in business as women.
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And there is still a very substantial gender gap when it comes to women owning and running their own businesses. Statistics show that 12% of businesses with employees and 15% of all businesses are majority female owned, equally owned it is 26% and 19% respectively and male owned 51% and 60%.
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The experiences of some of our major competitors shows what can be achieved when more use is made of women’s entrepreneurial talents
Why do some women want, or need, different things from business support programmes?
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Whilst not all women’s businesses are the same, there is evidence that the motivations, experiences and aspirations of female entrepreneurs differ from those of their male counterparts.
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Many women start businesses for different reasons from men and this can impact on how and when they are able to benefit from business support:
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Only 2% of men cite family commitments as a reason for becoming self-employed, compared with 21% of women
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Significantly more women than men say that fear of lack of finance, and of debt, would prevent them from starting a business
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Many women starting businesses have different levels of experience from men and may therefore need to develop different skill sets and have to overcome different personal development challenges:
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Many women run business whilst they continue with other occupations. Female entrepreneurship is higher than male entrepreneurship among homemakers and those who run a business as a sideline to their other employment.
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Perhaps because of the issues above, women-led businesses grow differently from those run by men. Therefore women’s experience of running a business in the early years may be very different from their male counterparts, making it more important for them to have peer group contact, networks and pre-start up support.
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The average turnover in the first year of a business is £290K, the average turnover for male owned businesses is £360K and for female owned businesses £150K
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All of this tends to indicate that a significant proportion of women who are thinking about starting their own business will look for a particular kind of support, relevant to them and, in some cases, different to the mainstream. Existing support programmes are geared, naturally, towards the majority of small businesses and how they work. There may be issues of availability (e.g. timing or places) of child care, or the ethos or content of existing business support that make a significant proportion of women feel that what is on offer is not for them.
What would the economy get out of increasing rates of female entrepreneurship?
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Business start-ups, or wider self-employment, whether male or female, are crucial to employment and productive growth. Government and many other bodies are already dedicated to promoting enterprise and entrepreneurship in the regions, but women remain a largely untapped resource.
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Women owned businesses already contribute hugely to the economy:
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Women in small business ownership make an estimated £50-70 Billion annual contribution to the gross value added by business
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Women starting up in business will tend to provide a more immediate contribution to the economy (GDP):
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Around one in five women come into self-employment from unemployment compared with around one in fifteen for men
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Women owned businesses can make a real impact:
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Business creation and employment - recent estimates suggest that every 100 businesses started up leads to around 260 jobs in the economy
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Women-owned businesses in the US employ an estimated 19 million people. This is one seventh of all those employed in the country
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For every 14 clients helped (counselling & training) by the Women’s Business Centres in the US, one more job is created
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Supporting women-owned businesses creates and preserves jobs. The Canadian Gender-based Training Program (WEI) estimated that across the 37,000 client businesses, WEI had a role in preserving 6,704 full-time jobs and 18,999 part-time jobs
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Contribution to the regional and local economies:
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Those involved in small business ownership have more spending power in the local economy. They can and do buy more goods and services than the average
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The 3 most productive regions, in terms of gross value added per employee, have the highest rates of business start-up and generally high rates of female entrepreneurship.
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Contribution to growth:
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There can be considerable multiplier (or knock on)benefits from businesses starting up. Not simply because they grow themselves but also because their dynamism stimulates competition, innovation and in turn increases productivity in the economy as a whole.
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There are indications that female businesses are more innovative than male businesses. They are more likely to use new technology and to be providing a product or service that is new to the market
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Female start-ups became increasingly export-orientated between 2002 and 2003. The number of start-ups with often quite high proportions of their customers abroad, has increased
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Around a quarter of self-employed women (24%) have a degree or equivalent, compared with a lower level of 18 per cent of self-employed men. Research shows that more highly qualified entrepreneurs grow their business at a faster rate.
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In addition, this is a ball that, once rolling, gathers its own momentum. US evidence shows revenues increase at a higher rate than the average when the number of women-owned businesses is increasing. In effect, growth in the number of women’s enterprises strengthens all women’s enterprises.
If more women-friendly business support was available how do we know that more women would use it?
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Attitudes to entrepreneurship among women (and men) are changing. There is generally a more positive feeling about the opportunities involved in starting your own business. But the data also indicates that women still tend to be more disadvantaged than men by cultural factors which result in them relatively lacking confidence in their entrepreneurial skills, their ability to spot good business opportunities, and confidence in their ability to succeed in business. These are all areas where effective business support can make a real difference.
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The gap between men and women thinking about going into business (38% fewer) is lower than the gap between men and women actually engaged in entrepreneurial activity (56%)
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Around 8 % of women have an interest in starting an enterprise or are giving it serious thought, compared with 13% of men. Having dependent children and other dependents, far from being a barrier, appears to make it more likely
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Women interested in starting up their own businesses want help and they are looking for it in innovative ways:
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70% of women-owned businesses seek advice at the start-up phase compared with 64% of all businesses
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48% of visitors to the businesslink.gov are women
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Relatively high proportions of both Mentors (48%) and clients (38%) of the Business Volunteer Mentoring Scheme are women
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Young women say that they could be tempted to train for work in a not traditionally female sector if they see other females making the same choice, and if they are given support and encouragement from other women
Source Paper - Department of Trade and Industry
There is consensus in the research literature that women who are self-employed often face additional problems associated with lack of business knowledge and training, discrimination and prejudice (particularly in obtaining finance), as well as increased home/work conflicts and stress.
Women appear not to have the same access to business advice and support systems as men. Moreover, recent reports outline how business enterprise provision could be made more accessible to female clientele (Dti 2004). There is now a recognised need by Government to address how the enterprise agenda is marketed and delivered on a local regional and national basis in order to tap into potential female market, and mainstream agencies need to adapt their monitoring procedures noting the proportion of females utilising their services. Enterprise service providers will also need to adopt and aggressively implement equal opportunity programmes, employ more female business counsellors and trainers and support single-sex training, as well as women-only business networks and incubation (Marlow et al 2005, 2006, Carter et al 2004, Dti 2004).