The gender gap has been a very real thing for too long. But low and behold, we are now seeing an influx of female entrepreneurs and powerful women in business. SBT looks at what has caused this sudden increase and which barriers are still holding strong. 

Portrait of happy office worker looking at camera

Historically, there have been significant gaps between men and women with regards to all levels of equality; one being career prospects. When it comes to levels of self-employment, pay or business ownership, the story has long remained the same, and the conclusion to that story is often that women are left behind. However, more recently we have been seeing a shift: over the past few years or so, the UK has seen a sustained increase in the number of women in self-employment, starting their own businesses. Since the 2008 recession (between November – March 2008 to November – January 2016) the number of self-employed females has risen by approximately 40% according to the Federation of Small Businesses (FSB). As such, women now account for 32% of all self-employment compared with 28% prior to 2008. In 2014, 20% of single-person businesses and 18% of smaller firm employers in the UK were majority-led by women.

These are clearly encouraging signs – signs that in this modern age, in 2016 look almost outdated in principle, but unfortunately in reality are not. But what has prompted this rise? Well, firstly, self employment has been recorded to be at its highest in 40 years, but simple probability isn’t solely the reason. Changing perceptions from both sides surrounding women in business and entrepreneurship has also certainly made for a rather different environment from that of the past. No matter the probability calculations, such a rise in female entrepreneurship must, at least in part be led by a shift away from – arguably – long-standing, largely patriarchal views of society. However, there’s still plenty of room for improvement as Fiona Anderson, Entrepreneurial Development Manager for NatWest, reveals:

“If women started businesses at the same rate as men, there would be an additional 150,000 startups launched every year, potentially increasing UK GDP by £60 billion by 2030, which really underlines the importance of boosting female entrepreneurship.”

Clearly then, there are still challenges and barriers that remain to be overcome. Among the most pressing are access to business support and finance, skills and training, the age old juggling act between a successful career and being a parent and, quite simply the gender gap whilst growing up. Sharon Davies, Chief Operating Officer for Young Enterprise thinks that a more fundamental change in education must be implemented:

“The increase in women entrepreneurs is encouraging, and it’s great to see more millennial women setting up businesses. However, male entrepreneurs far outnumber women across other age groups. Women still face barriers to overcome, the main ones being a lack of confidence and the perception that going into business is for men, which needs to be tackled early through education. Bridging the gender gap at school, college and university will make the gender gap in entrepreneurship and also in salaries easier to tackle.”

In agreement with Sharon’s comments, in spite of evidence that shows that more women than men are now choosing to move into self-employment, the RBS Enterprise Tracker – which tracks people’s attitudes to starting up in business – has found that women continue to be less likely than men to want to start a business (30% vs 38%) and that fewer women are in the process of starting their own business (3% vs 5%).

A recently published report by FSB called ‘Women in Enterprise: The Untapped Potential’ spoke to almost 2,000 women business owners in the UK. It found that the key challenges that women faced when starting their own business included balancing work and family life (40%), achieving credibility for the business (37%) and, as Sharon pointed out herself, a lack of confidence (22%). The report also found that a third (34%) of women business owners say they have experienced gender discrimination in the workplace. This was felt particularly in sectors that are traditionally male dominated – for example in construction where over half (54%) had experienced discrimination.

In SBT’s most recent roundtable event in association with NatWest on entrepreneurship, Melanie Lawson, Director of Bare Biology, agreed with the findings of this study and Sharon’s opinion, suggesting that a lack of confidence was indeed a key barrier for women in business:

“I believe that if men think they can do 30% of a job they will apply for it; if women think they can’t do 30% of the job, they won’t apply. Reshma Saujani in a recent TED Talk said that girls are taught to be perfect and boys are taught to be brave. So, women are thrown into life with this idea that they can’t start anything unless they know it’s going to succeed, whereas men just give it a go. This really affects the business climate, as women are so much less inclined to just start up a business without fear.”

This is one woman’s opinion of course. However, the overwhelming evidence – including that from the Women’s Business Council – does in fact suggest that women are more likely to be prevented by a fear of failure when starting a business and indeed less likely than men to think they have the skills needed. According to the Council, a key explanation for the gender entrepreneurship gap may be ‘linked to wider issues of lacking self-confidence rather than an actual lack of skills’. If this is the case, it seems that perfectly ably skilled people are being left behind simply because of an issue with self-esteem. Research by the Council itself has shown that the UK economy is missing out on more than 1.2 million new enterprises due to the untapped business potential of women. This is despite a number of policy initiatives by the UK Government and the devolved administrations, and the business community to promote and facilitate women business leaders and enterprise.

Holly Bonfield, FSB Manchester & North Cheshire region’s National Councillor, said:

“Women-led smaller businesses already contribute over £75 billion to the UK economy, yet less than one in five (18%) of businesses are majority run by women. If women were to set up businesses and grow them at the same rate as men, we would see a huge boost to growth and prosperity in this country. In fact, the Government estimates it could add £600 billion to our economy.”

Where has this lack of confidence come from and how can we tackle it?

The obvious answer is that women have been ingrained with a mantra developed by centuries of inequality and misconceptions over their abilities as leaders, or even as anything other than a menial housewife. Whilst there isn’t anything wrong with this, it should never be expected for a woman to strive for nothing more. The challenge we face leads us in a spiral. A lack of female entrepreneurs due to a lack of confidence leads to a distinct lack of female entrepreneur role models in the limelight; which in turn stifles entrepreneurial ambition. Young girls have comparatively very few examples to work from. Men dominate as entrepreneurial role models, perhaps largely due to the stereotypical trait linked to entrepreneurship; that of competitive risk takers in pursuit of wealth, which in itself is strongly associated with masculinity. This persistent stereotype of ‘what it means to be successful’ is highly damaging to the aspirations of girls and young women attempting to overcome it. As with so many ingrained perceptions, change is not going to happen overnight. Of course that is not to say that things are not improving in this regard, it’s just not with the speed or ease with which many of us would like.

Being able to access external business support and advice is crucial to starting, running and growing a business – and this is one area that’s clearly improving for female entrepreneurs. Research by the FSB found that two thirds of women say they have accessed both private and government-sponsored business support in the past in order to help grow their business. In fact, a promising survey by the British Banking Association found that, while women-led SMEs are less likely to use external finance, those who did apply for finance were more successful than male-led SMEs (70% of women-led SMEs were successful in loan applications compared to 56% of male-led SMEs). However, in spite of this, 33% don’t receive support of any kind.

To further the recommendations of the report that was published, FSB plans to launch a dedicated ‘Women in Enterprise Taskforce’ to support woman entrepreneurs and business owners.

Minister for Women, Equalities and Family Justice, Caroline Dinenage commented on the state of equality in our country today:

“We have a lot to be proud of – Britain is ranked one of the top three places in the world for female entrepreneurs and we have over one million female led small to medium businesses. But we know there is even greater potential out there, which is why we’ve given a further £1.1 million to help women improve their digital skills and launched the Meet a Mentor scheme – providing women with valuable advice and expertise when they start out.”

NatWest have thrown their hat in the ring too. As part of a public commitment to support female entrepreneurs and business owners, the bank has developed the Women in Business initiative. Fiona Anderson of NatWest explains:

“The Women in Business initiative has been designed to tackle the barriers to business success through access to expertise, finance, skills development and networking-building. At the beginning of the year we had 250 accredited Women in Business Specialists and by the start of 2017, that number will be doubled to 500, helping to ensure female entrepreneurs and women-led business customers can receive specialist support at all stages of their business journeys.”

There may not be an easy fix for this problem. It’s one among many other aspects of the world we live in which needs to be improved upon, in order to benefit us as people as well as strengthen our economy. However, things are slowly getting there, which can only be a good thing for the business climate.

Holly added:

“Everyone should have the same chance to succeed in business. Understanding the importance of diversity and getting more women into business is critical for a dynamic and vibrant small business sector. That’s why we need to work out what the barriers are for women and break them down one by one.”