The Women’s Business Council was set up in 2012 to advise Government on how women’s contribution to growth can be optimised. The aim was to focus on areas with the greatest potential economic benefit and on recommendations with a clear economic case for action. In June 2013, a report was published by the independent Women’s Business Council.
In much the same way that we wrote about Budget 2013 and What it Means to Startups, the recently published “Maximising women’s contribution to future economic growth” report by the Women’s Business Council (WBC) tapped perfectly into a topic we feel passionately about sharing. In this blog, we will take a look at some of the findings of the report. We hope it helps in making that leap into self-employment.
General report overview
The WBC was setup in 2012 to help advise the government on how women can contribute positively to the nation’s economic growth. They state that: “Our aim has been to focus on areas with the greatest potential economic benefit and on recommendations with a clear economic case for action.”
General key findings were as follows:
- The urgent need to broaden girls’ career choices and aspirations by bringing together schools, business, career development professionals and parents
- Flexible working needs to be embraced by business to offer support and greater opportunities for working parents
- Offer women in the third phase of their working lives opportunities to expand their knowledge and unlock untapped potential
These findings – coupled with the comments on female entrepreneurship we will cover in more detail in a second – should become a road map for “clear and achievable gains.” The WBC also believes that encouraging women’s economic development in this manner now is perfectly timed, as the Government struggles in its many initiatives to stimulate growth. To reach the UK’s economic potential, we need to utilise the talents, skills and expertise of all.
We are particularly interested in what the report had to say with regards to growing female entrepreneurship, and we will look into the findings in more depth now.
– The Strategy
The report believes that economic growth could easily be supplemented by inspiring more women to enter the start-up landscape. It believes this can be achieved by helping women to understand how enterprise opportunities can increase their financial independence and workplace flexibility, while also offering the assistance needed to help women gain the skills necessary for running a successful business.
– The Aims
Empower future generations of young women to consider enterpreneurship as a viable career option is to embed this female entrepreneurism in the education system.
Encourage women who are currently in the labour market and struggling to find the necessary workplace flexibility should also be encouraged to consider enterprise as a realistic career choice.
– The Rationale
On a wider scale, British enterprise in general is vital for economic growth, innovation and competitiveness on the world market. This was reiterated in the recent “Growing your business” report by Lord Young, wherein he recognised the important role played by small and medium businesses in the economy.
Despite this, women are currently are about half as likely to be entrepreneurs as men. While this is an alarming figure – especially when combined with the fact that only 19 per cent of small and medium enterprises are majority-led by women – it does mean there is a huge untapped goldmine of female entrepreneurial talent out there just waiting to be mobilised. Ultimately, if women set up and ran new businesses as often as men, there would be an extra one million female entrepreneurs on top of the current figure.
So why the disparity between the sexes?
The report found that a large number of women see access to finance as the main barrier between them and realising their entrepreneurial dreams. Interestingly, while women are less likely than men to seek external financing, they are actually more successful than male-led small businesses at getting the finance needed when applied for.
The report also puts forward evidence that women are less likely to believe they have the skills needed to start and run a successful business, with the fear of failure also weighing heavier on their minds. During a 2011 study, 45 per cent of men felt capable of starting their own business, compared to just 29 per cent of women. Far from the disparity being due to lack of relevant skills, the study argues that it is largely due to wider issues related to a lack of self-confidence.
Finally, the report found that for many women, there isn’t a diverse enough cohort of successful female entrepreneurs available to help inspire the entrepreneurial instinct.
- Promote enterprise through education
To make sure that such disparity does not continue into future generations, entrepreneurship needs to be promoted vigorously in an educational setting. The skills, networking opportunities and gaining of self-confidence all need to be addressed from an early age to improve the chances of enterprise being viewed as a viable option for young women. The study cites Lucy Cohen and Sophie Hughes of Mazuma UK Ltd as an excellent case study of highly-successful female entrepreneurs who took advantage of Young Entrepreneur schemes during their school years.
To achieve this, the Government need to research which existing schemes help to produce the highest levels of successful entrepreneurs. Existing micro-finance schemes in schools also need to be evaluated and expanded if they are proven to stimulate entrepreneurship.
In business itself, women’s organisations such as Everywoman, Sistatalk and Enterprising Women among others should work together with the British Chambers of Commerce women’s business networks to help create an industry-led approach. The business world should also aid the development of a college and school module based on starting a business to ensure that it covers all the necessary skills.
- Increase the availability of role models
According to the study, 83 per cent of women who have started their own business were inspired by someone else who has done so. Clearly, this is an important factor in inspiring potential female entrepreneurs. The Government could successfully roll such schemes out by promoting female entrepreneurs through the newly-appointed Entrepreneur in Residence.
Successful female entrepreneurs can also help the cause by signing up to existing programmes and speaking at events in educational institutions and women’s networks, while also mentoring prospective entrepreneurs themselves – the Female Founders Programme is one to note..
- Access to finance
As this is the most common barrier preventing most women from starting their own business, promotion of all the business financing options available to women needs to be more widespread. This should include alternative sources of finance such as those we have covered in detail in the past. This will mean that when a great idea arises, the knowledge of how such a venture can be funded is already there.
This promotion of available financing methods needs to come from both a Government and business level, and financial services need to ensure they are successfully marketing their services to women who want to set up their own business.
- Promoting support from women wanting to start a business
The existing support for those wanting to start a business is not gender specific, instead operating under a “one size fits all” approach. To successfully mobilise this group, good quality, relevant information and support needs to be more readily available.
To achieve this, the Government and business need to work closely to create an advice portal with an achievable route map into enterprise. The marketing of schemes also needs to be targeted towards men and women separately in order to be successful.
Clearly then, successfully addressing the current disparity between men and women with regards to enterprise is a mutually-beneficial initiative. The study says that if the gender gap is closed by 2030, around £160 billion would be added to the UK’s GDP. With traditional job opportunities thin on the ground and the moment, we all need to be doing all we can to help bridge this gap.
If you’re interested in setting up a business you should start with our company formation guides – they’ll explain how to get set up and the steps you should take to get there. For more interesting reads about the current issues facing startups and entrepreneurship in the UK, browse our blog.