While hugely successful female entrepreneurs have been celebrated in the EY Entrepreneur Of The Year (EOY) awards, including overall winner Rosemary Squires in 2014, EY would have hoped to see more women following in their wake.
Sadly, that has not been the case. Both in the UK and globally, the number of EOY female winners has remained low. Here Joanna Santinon, Partner and EY Entrepreneur Of The Year leader, UK, explains why.
Last week (28 February), we closed EOY entries for 2020 with female entrepreneurs accounting for around 21% of our nominations – a notable increase on previous years. However, this number of nominations is significantly disproportionate to the funding opportunities available to female business leaders, with women-led companies receiving less than 1% of total UK venture capital, according to a study by the British Business Bank.
Understanding and addressing the reasons for this is vital if the potential of female entrepreneurs is to be unlocked fully to the benefit of society.
When we take a more in-depth look into those financial benefits, the unrealised economic potential is staggering. The Rose Review’s analysis puts the potential value to the UK economy of the advancement of female entrepreneurs at a £250 billion contribution if women started and scaled their businesses at the same rate as men.
Barriers facing female entrepreneurs
However, there are many barriers to achieving an environment where women can scale a business at the same pace as men. A recent survey among female entrepreneurs on our EY Entrepreneurial Winning Women (EWW) programme participants highlighted critical challenges preventing them from scaling up. These women, who hold a decision-making role in a UK business more than two years old and with revenues higher than EUR 1 million identified those challenges as limited access to funding, advice and mentors.
Our findings are echoed in broader research; the government-backed Rose Review listed access to mentors and networks and family care support as major barriers. Start-up database Bathurst points to funding disparities with male counterparts. Although the impact of impeding the growth and success of women-led businesses is clear, progress continues to be slow in tackling this.
Limited access to funding is a persistent problem and makes it more challenging to hire talent, rent office space and ultimately deters female entrepreneurs from any future capital raising plans. Coupled with an obvious lack of access to mentors and advice, many female entrepreneurs are struggling to achieve an equal footing.
Equal opportunity still a decade away
There has been some action taken. In response to the Rose Review’s findings, the UK government announced its ambition to increase the number of female entrepreneurs by 50% by 2030, equivalent to nearly 600,000 additional entrepreneurs. And this hasn’t gone unnoticed by female business leaders. According to our survey, 80% of respondents believe that progress is being made to create equal opportunities for female entrepreneurs.
However, when asked how long they felt it would take for there to be real equal opportunity, over 75% answered that it would take more than five years, with over two-fifths of respondents expecting it to take more than ten years. This timeframe could be to the detriment of many entrepreneurs who may struggle to develop the full potential of their business due to the slow pace of change.
What can businesses do?
Female entrepreneurs have the potential to be a powerful economic force with a major impact on the economy. However, to reap this economic benefit, more needs to be done by business leaders to accelerate progress towards equal opportunity, support women entrepreneurs and encourage female role models to emerge; you can’t be what you can’t see.
Organisations can create more routes to mentoring, advice and resources for female entrepreneurs which can help expand their knowledge of leading business strategies and practices, and connect them with prospective sources for private capital, potential partners, customers and suppliers.
The EY Entrepreneur Of The Year awards and Entrepreneurial Winning Women (EWW) programme – which, over the last 11 years has provided support and guidance to almost 500 entrepreneurs globally who have built profitable businesses – both aim to do this, connecting female entrepreneurs to a broader network and taking steps to put them on a path to growth and scaling up their operations.
In addition to this, senior business leaders can help female entrepreneurs strengthen their executive leadership and business skills and give them guidance on identifying opportunities to grow while increasing their visibility through media/promotional opportunities and training. These tools will help them expand sustainably and allow them to realise their full capabilities.
The procurement process – where, as a business, do you spend your money?
When considering the role of businesses in moving the needle on this issue, one critical element is the procurement process. According to research conducted by WEConnect International, it is estimated that women-owned businesses currently receive less than 1% of the global purchasing spend by large corporations and governments.
EY efforts to address this issue include a commitment to spend $100m on goods and services provided by women-owned businesses around the world, welcoming more female entrepreneurs into our supplier network.
Leading businesses have a vital role to play in helping more women receive equal and fair access to procurement opportunities.
Through reviewing purchasing policies and diversifying suppliers, they can empower female entrepreneurs. If we can tackle this issue, the impact on future generations of women business leaders and the UK’s presence as a business hub would be revolutionary.
Increasing the pace of change
There are many high-potential women-led businesses which could add significant value to the UK economy, and the case for levelling the playing field couldn’t be more clear. If business leaders can step forward and join forces with female entrepreneurs to unlock their potential, we could see real equal opportunity, accelerated growth and financial benefits much sooner than in a decade.
By Joanna Santinon, Partner and EY Entrepreneur Of The Year leader, UK