The current government’s strategy for economic growth has entered phase two, in which there is “one central purpose – creating the right conditions for business to start up, invest, grow and create jobs,” said Business Secretary Vince Cable, at the launch of the second round of the Growth Review.

The trouble with all this enterprise rhetoric is that the issues lie not in what the government is espousing, but that current policy relating to business support fails to recognise the huge economic potential that can be generated by women’s enterprise.

A barren landscape for female entrepreneurs

Even before the announcements of government cuts, there has been a massive decline in provision for women:

• The Women’s Enterprise Taskforce (WETF), closed down in 2009, leaving even fewer observers reporting on the difficulties women entrepreneurs are facing;
• Prowess, the UK advocacy network promoting women’s business ownership, has been reduced to a newsletter service;
• The regional Women’s ambassador programmes launched in 2009 have come to an end, with the demise of the Regional Development Agencies;
• Many specialist women’s enterprise support organisations have folded due to lack of funding, but their work not continued by “mainstream” Business Link;
• Women are addressed only as part of the intensive start-up support provision encompassing all ‘under-represented groups’;
• The government’s explicit priority for high growth heavily weighs in favour of male-owned businesses;
• The huge economic potential arising from removing barriers to growth for established women entrepreneurs in the ‘missing middle’ is being ignored.

A clear business case for investing in female entrepreneurship

In 2008, the European Commission highlighted the need to better exploit entrepreneurship potential, specifically referring to the continuing gender enterprise gap, which sees fewer women setting up in business.  One European action to help address the gap was the establishment of Europe-wide networks of female ambassadors to raise awareness and aspiration, and the UK Network for Female Entrepreneurship Ambassadors was launched last month. This brand new UK-wide initiative, managed by YTKO, aims to inspire new entrepreneurial activity and reach 20,000 women and young girls.

Earlier this year, the Position Paper formulated by the Learning Network on Gender Mainstreaming within the European Social Fund [1] concluded that gender inequality poses a severe threat not only to future progress on economic cohesion but also to the social cohesion of the European Union. In directing business support away from women’s enterprise, at start-up and at growth levels, the government is also failing to consider the wider social context and positive impact.

There has been a huge amount of academic and practitioner research in the UK and around the world that clearly shows the economic benefits that investing in women’s enterprise delivers to local, regional and national economies.  At a recent policy table in Edinburgh that I participated in, many in the room felt equally passionate that the economic case has to be made all over again to this coalition government.

The Women’s Enterprise Taskforce recommended the government to support female entrepreneurship based on the high contribution of these businesses to the Gross Value Add (GVA).  They estimated that 150,000 new UK businesses could emerge yearly if women started businesses at the same rate as men, which would help to create thousands of new jobs.

The Enterprising Women Growth Survey, which surveyed over 220 existing businesswomen from across the UK, showed that women have plenty of ambition: if growth barriers were removed and they were able to realise their stated targets for growth, their cumulative contribution to the UK economy would be £232 million!  What a return on investment that would be!

Why are businesswomen low on the agenda?

From our experiences with Enterprising Women, high quality, gender-specific support generates significant dividends both in the short and in the long-term, with substantially increased profitability and job creation in existing businesses, and new business survival rates over 80% after 4 years.

In spite of these recommendations, acknowledged and widely shared best practice, and much additional research in the past few years, the UK is taking a different stance from the European pro-women’s entrepreneurship policy [2] through putting all its eggs in the high growth basket.  The approach is to try to identify and support only the highest growth potential businesses, about 5-6% in each country – known as ‘gazelles’. This is something the venture capital business does for a living and still fails to make much of a return on, according to the latest NESTA report.

It is not a question of there not being any money to support women entrepreneurs – it is a case of prioritising. The vast majority of existing women-owned businesses typically do not fall within this narrow 5% profile, which tends to favour highly scalable enterprises with intellectual property, who need significant private investment to fund rapid growth.

Enterprising Women’s experience in enabling the creation of hundreds of new women-owned businesses, and training several thousand women, from pre-start to successful, established businesses, also provides a route for their voice to be heard through the community, such as in the SETWomen, Women’s Voices and the Growth Surveys. They tell us that women’s distinct business needs cannot be best met by either lumping them in with disadvantaged under-represented groups at the beginning of the journey, or through the gazelle approach at the other end.

Women share far more commonalities with each other than with other under-represented market segments, and respond dramatically to focused, high quality growth support.  For example, Enterprising Women’s Growth Programmes are repeatedly proven to help women move their businesses forward by significantly increasing profits, turnover and job creation.

A shift in thinking

Our mindset has to evolve: with women-owned businesses comprising only around 15% of the UK business stock, we cannot afford not to address this imbalance.  Some large companies – Avon [3] or Lloyds TSB Commercial [4] are pioneering corporate examples – have helped overcome the access to finance barriers by dedicating funds to women-led businesses and actively supporting initiatives to help them start and grow.

We might also learn from USA models, to engage and develop new programmes in collaboration with the private sector, since there’s a recognition that support is not solely philanthropic – there is a clear business case for partnerships. American Express OPEN recently conducted research – the State of the US Women-Owned Business Report [5] – and consequently acquired critical data to inform its business planning, programme development and enterprise support activities, as well as to demonstrate its commitment towards women’s entrepreneurship.

YTKO and Enterprising Women are two of the few key players who remain to vocalise and support female entrepreneurship.  We have been campaigning for many years for funds to be targeted to specifically addressing women’s barriers to growth, and enable women to fulfil their economic potential.

Women’s enterprise may be low on the government’s current agenda, but it’s at the top of ours; we’re committed to finding innovative ways to continue supporting women’s entrepreneurship and enabling the growth of strong, successful women-owned business across the UK.

Bev Hurley
YTKO CEO
Enterprising Women Founder
Holder of the Queens Award for Enterprise Promotion
Holder of the First Women Award for Business Services