Supporting female-led businesses isn’t just the shrewd thing to do but the crucial step in building back the UK economy and closing the gender gap faced by female founders.
“Our economic recovery desperately needs the untapped potential that women-led businesses represent: equivalent to more than one million missing SME businesses and £250bn of additional value for the UK economy” – this week saw the publication of this year’s update to the Alison Rose Review of Female Entrepreneurship 2019 (the “Rose Review”) which highlighted the additional monetary value to the UK economy if women started and scaled new businesses at the same rate as men.
Two years on from the original publication of the Rose Review, against the difficult backdrop of a global pandemic and economic downturn, this year’s update demonstrates that progress is being made and the untapped financial growth being generated by female-led businesses.
In the last two years, significant progress has been made for several of the key eight initiatives set out in the Rose Review, including:
- the Investing in Women Code (IWC) now has nearly 80 signatories, including most major UK banks and investment firms. The first annual IWC Report is also due to be published imminently by HMT which will also be an important step towards more gender transparency in funding;
- new investment vehicles are being launched – in partnership with the Business Growth Fund, Coutts is launching the UK Enterprise Fund to invest in diverse and high-potential businesses and providing a support programme for female investees;
- The Council for Investing in Female Entrepreneurs brings together leading investment firms and institutions to tackle barriers. Its three working groups have this year published best practice guidelines for Venture Capital firms, launched the Invest in Women digital advice hub and are developing guidelines for Limited Partners and General Partners;
- catapulting the need for family-friendly flexible products identified in the Rose Review became urgent for many more business owners during the pandemic. Capital repayment holidays, fee waivers and government-backed Bounce Back loans have become core elements of the support offered by banks to all entrepreneurs; and
- creating a digital first-stop shop. A wide variety of digital support exists for women owners. The new Invest in Women hub is an important step towards creating a single unifying site to support women-led businesses navigate what’s on offer. Launched in January 2021, the hub creates a single channel for women to access educational materials on funding options and reconciling numerous existing distribution channels.
However in today’s Telegraph article by Alice Gast (President of Imperial College London) and Alexis de Raadt St James (Founder and Managing Partner of Merian Ventures) they highlighted that women risk being left behind in the economic recovery. This is due to women being under-represented in industries that have continued to grow (by both economic gains and new jobs) during the pandemic such as the scientific and technology industries, such growth largely benefitting their male counterparts.
Additionally, recent research commissioned by NatWest in conjunction with YouGov in December 2020 shows that support and encouragement for female entrepreneurs is needed as much as ever due to the disproportionate impact of the Covid crisis on women, namely:
- 1 in 10 female entrepreneurs plan to start a business in 2021;
- 55% of female business leaders would not recommend starting a business in their sector in 2021;
- female entrepreneurs and business owners are 17% more likely to struggle balancing business with family life during the pandemic; and
- nearly three quarters (71%) of female business owners and entrepreneurs found managing their business stressful during the pandemic, compared with just over half of males (55%).
The pandemic has compounded the difficulties and expanded the obstacles faced by many women in starting, continuing and scaling their businesses.
As Gast and Raadt St James captured in their Telegraph article – we have pockets of success where we support women-led businesses (such as in science and tech) but we all now have a duty to make the renaissance to the UK economy fair, “by supporting the people who can make it happen: women”.
“Indeed, if women find themselves at even more of a professional disadvantage on the other side of this crisis, then we will have failed and be attempting to build an economic recovery that will be ignoring the huge potential represented by female entrepreneurs. The Rose Review and the interventions it identified are the best way of ensuring that all female entrepreneurs who want to start, scale and grow their business can do so and by extension the UK economy will benefit.”