As many of us are no doubt already aware, an imbalance still exists in the UK’s business sphere. While we make up more than half of the population of Britain (51%, according to statistics), research from the Department of Business has shown that just 18% of the UK’s SMEs are owned by women.
Why the disparity? It may be the case that due to gender discrimination it’s harder for women to access the finance they need to get started on the entrepreneurial road. Others will ask if it’s not simply a fact that we generally don’t want to start businesses of our own, and that we’re happy to work for others. Well, studies have shown that the latter is not the case – and as many as half of us harbour the fiery entrepreneurial spirit.
Equality – essential for a strong economy
It’s important that we address the imbalance and get more women into the business arena. And I don’t just say this with a view to fighting gender inequality: a number of sources have suggested that if more of us joined our male counterparts in setting up our own commercial ventures the UK’s economy would benefit exponentially.
Reports have shown that there are currently 690,000 female-owned businesses in the UK today, and that if our country had the same level of female entrepreneurship as exists currently in the United States, there would be a further 600,000 businesses. That would mean an extra £42bn a year for Britain’s economy. RBS’ managing director of diversity in business, Anne McPherson, made an even more ambitious forecast in an article published in the Guardian last year, in which she suggested that boosting female entrepreneurship could bring as much as an extra £60bn to our economy.
We can take some comfort in the fact that steps are being taken to increase diversity and get more of us on the business spectrum.
Last year, Home Secretary Theresa May announced that in a bid to boost female entrepreneurship 5,000 mentors would be called upon to guide those of us looking to start our own business. In addition to this, the government launched the Women’s Business Council.
The Council has actually published a report highlighting what I’ve already said about how encouraging more women into business is sensible for the economy. While the report – which is titled ‘Maximising women’s contribution to future economic growth’ – seemed to focus more on employment than entrepreneurship, it did make one point I believe supports my view:
[quote][Helping] women in working life is not a moral duty but good working practice. Business, and our wider economy, have to prioritise business needs. Happily, increasing numbers of employers are convinced of the business case for optimising women’s economic activity. For them, the question is not, ‘should I employ women?’ but, ‘How can I recruit and retain the best women, and help them grow my business while supporting their professional development?[/quote]
Access to finance
Some banks are also taking important steps. RBS, for instance, has acknowledged the fact that we’re less likely than men to apply for finance (as much as half as likely, according to research). In a bid to provide better support to women, the bank has reportedly committed itself to providing dedicated services such as specialist relationship managers and mentors, networking events and start-up surgeries. At the same time, it understands that the best thing banks can do is focus on offering funding where it’s needed. In her Guardian article, RBS’s Anne McPherson suggested that since we are generally less likely to apply for funding, banks need to ensure their services are accessible to that somewhat more tentative approach.
Further, one of Ashridge Business School’s research fellows, Viki Holton, has highlighted the fact that while starting a new company is a tough task for anyone, women face more obstacles than their male counterparts on the long, steep road to business success. In an article published by BusinessZone, she also drew attention to the difficulties we potentially face in accessing the finance we need.
However, improving access to finance isn’t the only measure to be taken. Indeed, research has shown that for the average start-up just £500 is required to get the ball rolling – something that could be easily attained through short-term financial solutions like overdrafts and loans from friends or family.
So what’s to be done? I think we could make a huge difference if we were to encourage the new generation to see business in a different way. We should do what we can to make female role models – and, in particular, successful women business owners – much more prominent. If we show girls and young women that establishing a business is not only a viable alternative to standard employment but also constitutes a challenging, invigorating and ultimately rewarding life experience, then I think we can move forward.