Federation of small businesses exposes untapped potential of women enterprises for UK economy

By Sangeeta Haindl —

What would you say, if you knew that only one in five U.K. small businesses are majority-woman owned and yet contribute over £75 billion to the country’s economy? Or that if women set up businesses at the same rate as men, there would be a significant boost to the U.K.’s economic growth. These thought provoking statistics are revealed in the Federation of Small Businesses (FSB) latest report, Women in Enterprise: The Untapped Potential, which explores the specific challenges faced by women-led businesses along with recommendations for improving support, developing mentoring networks and increasing the diversity of business ambassadors.

The report shows that the U.K. economy is missing out on more than 1.2 million new enterprises due to the untapped business potential of women; that’s despite a number of initiatives by the government along with devolved agencies and the business community to promote and facilitate women business leaders and enterprises. In 2014, 20 per cent of single-person businesses and 18 per cent of smaller firm employers in the U.K. were majority-led by women; and self-employment is at the highest level in 40 years with the recent growth among women!

Small firms make a huge contribution to the U.K. economy; and if it was to harness the still largely untapped potential of women entrepreneurs, it could lead to additional jobs, economic growth and a more diverse and representative small business community - all issues that the U.K government is trying to solve. The FSB, a not-for-profit making and non-party political organisation wants a cultural shift towards equality in business and will soon launch a dedicated ‘Women in Enterprise Taskforce’ supporting woman entrepreneurs and business owners to get to the root of these problem. Helen Walbey, FSB Diversity Policy Chair, says: “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.”

Interestingly, from this study women-led businesses tend to be more highly concentrated in health, social work, community, social and personal services. There is a lack of women-led businesses in construction, transport, storage and communications sectors; reflecting traditional gender segregation patterns found in the wider labour market. While the sectors where there are greater numbers of female-owned businesses, tend to have lower levels of business growth with smaller turnovers. Tellingly some women felt that across all sectors there appeared to be a continued perception that entrepreneurship and business ownership is a male career.

Sadly, in this day and age these FSB findings reveal that there are specific and persistent barriers for too many women when setting up and growing their own businesses. From balancing work and family life (40 percent), achieving credibility for the business (37 percent) and a lack of confidence (22 percent). When comparing the U.K. to the other countries such as France, Germany, the U.S., Australia, Japan and a number of Scandinavian countries – its gender gap is high, placing it low down with Hungary, Poland and Canada. The only country with a greater proportion of female entrepreneurs to male entrepreneurs is Switzerland. While Spain, China and Italy are among those countries who report some of the highest levels of female entrepreneurship! It is definitely time for change here in Britain.

Photo Credit: Pixabay

This article originally appeared at Justmeans.