Surge in female entrepreneurs and start-ups narrows ‘enterprise gap’

Proportion of women early-stage entrepreneurs jumped 45 per cent between 2003-6 and 2013-16, narrowing the enterprise gap.

The UK has witnessed a rapid rise in the number of start-ups in recent years. But the number of new female entrepreneurs in the UK has risen far faster than men in the past decade.

New research from Aston University using data from the Global Entrepreneurship Monitor (GEM) also reveals that there are large disparities between different parts of the country when it comes to this ‘enterprise gap’.

The GEM data shows that between 2003-6 and 2013-16, the proportion of women that went into business rose by 45 per cent, compared to just 27 per cent among men. Overall, however, men are still nearly twice as likely to be entrepreneurs (10.4 per cent of men versus 5.5 per cent of women).

Women in the South East are the most likely to take the plunge, with seven per cent describing themselves as early-stage entrepreneurs. By contrast, just 2.8 per cent of women in the North East fall into this category. Most regions saw sizeable jumps in the proportion of female entrepreneurs over the past decade, but in the South West and North East the proportion fell.

By region

The region with the closest gender parity is the West Midlands, where there are 74 new female entrepreneurs for every 100 males, compared to just 33 in the North West. Researchers have suggested these regional differences may be partly explained by the presence of higher numbers of graduates and mobile individuals including international migrants.

Across both sexes, the 2016 UK early-stage entrepreneurship rate was significantly higher than 2015, and again exceeded the previous long-run rate of around six per cent which prevailed until 2010. The UK rate of 8.8 per cent compares favourably to France (5.3 per cent) and Germany (4.6 per cent) – confirming the UK as the start-up capital of Europe. But this is still significantly lower than that of the US (12.6 per cent).

At the global level, the UK’s rates of female early-stage entrepreneurship remain well below many other advanced economies. Canada has the highest absolute rate of female early-stage entrepreneurs at 11.6 per cent, while Spain has the closest male/female ratio of any developed economy, with 74 Spanish women entrepreneurs for every 100 men, compared to 53 for the UK.

Many developing economies display even higher rates of female entrepreneurship. In Ecuador, 31.9 per cent of women are entrepreneurs, while other Latin American and South East Asian nations dominate the top spots. Indonesia and Brazil are the only GEM-participant countries where there are more female entrepreneurs than male.

Dr Karen Bonner, senior researcher at Aston Business School, said the reasons behind the continuing disparity between male and female entrepreneurship rates were complex.

Bonner adds, ‘On the one hand, we could point to different societal expectations, with women still taking on the bulk of unpaid caring roles and entrepreneurship still stereotyped as a ‘male’ career choice in our wider culture.

‘When asked why they started their business women are significantly more likely to cite ‘greater flexibility for my personal and family life’ and the desire for ‘freedom to adapt my own approach to work’ than men. But despite these differences, and controlling for other factors like sector, age and start-up capital, both men and women display similar levels of ambition when it comes to growing their businesses.’

She says, ‘We also observe a tendency for women generally to be more risk-averse which may make them self-select out of entrepreneurship, particularly in places where there are ‘safer’ employment options that allow them to work more flexibly around caring responsibilities. This would help to explain why places like Northern Ireland and the North East of England, with relatively high proportions of public sector jobs, have low start-up rates for both men and women.’

Mark Hart, professor of small business and entrepreneurship at Aston Business School, adds, ‘The regional disparities we observe in male and female start-up rates across the UK are striking. The closing of the ‘enterprise gap’ in the Midlands (West and East), in particular, may be partly explained by internal and international migration patterns.

‘We know from previous GEM research that mobile individuals, who also tend to be university graduates, are much more likely to become entrepreneurs and this appears to fit with the experience in these regions and the growth of places like Birmingham and Leicester as thriving diverse and dynamic cities providing many opportunities for new venture creation.

‘At the national level, it’s encouraging that more women are seeing entrepreneurship as a career option and a route to financial independence and that may be a reflection of a more supportive ecosystem and private sector led initiatives to highlight the success of female role models in business.’

Case study – Whisky Gal(ore)

Amy Seton is making her mark in the traditionally male-dominated world of whisky.

With a ten-year career in events marketing under her belt, Amy initially planned to launch her own food and drink events business, but chose to specialise in the ‘water of life’ following huge enthusiasm from customers.

Her company, The Birmingham Whisky Club, is now in its sixth year, with Amy hosting up to 10 tasting events every month and organising the city’s annual Whisky Festival featuring 300 varieties of the golden spirit. The concept has been so successful she’s now expanding to Bristol and has eyes on other UK cities including London.

But despite her extensive knowledge, Amy admits she sometimes found it hard to be taken seriously at first. ‘People are interested in the idea of a younger woman working in a culturally male world,’ says Amy. ‘But the fact that it’s still a subject to be talked about sits slightly uncomfortably with me. Even after hosting tasting sessions, I will still occasionally get asked ‘do you actually like whisky?’ which I don’t think a man would get.’

Since starting her own firm, Amy has seen other friends embrace entrepreneurship as job security becomes an increasingly outmoded idea. ‘The way people are seeing work has changed. People are more flexible these days and not willing to endure a cultural setting that doesn’t suit them. Companies that are very entrenched will lose people to business.’

She feels the enduring disparity between male and female entrepreneurship rates could be tackled by greater availability of mentoring schemes and start-up finance. ‘I’m sure I wouldn’t have made half the mistakes and propelled the business more quickly if I’d been able to get advice from people who are older and wiser.’

She’s now taking the bull by the horns herself, establishing a lunch club for female business owners in Birmingham to network and share experience with like-minded entrepreneurs from a range of sectors. And being based in the city’s creative hub of Digbeth means she has benefited from being part of a growing cluster of ambitious new firms. Office space in Birmingham is relatively cheap, while the city’s central location means business trips to Leeds, Manchester or London can be easily accomplished in a day.

Her advice to other would-be entrepreneurs is straightforward: ‘If you have an idea and you’re confident about it, it’s about grit and time and not giving up.’

Further reading on female entrepreneurs

Related Topics

Female Entrepreneurs

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