Despite the impact of COVID-19 on the economy, the sentiment around female entrepreneurship appears positive. But do female founders have the infrastructure around them to succeed?
Research shows that British workers are looking for more independence in their careers with 51.2% of a new survey’s respondents wanting to start their own business or freelance sometime in the future.
Has COVID-19 bolstered female entrepreneurship?
The survey, published by software accounting firm FreeAgent, found that more women than men wanted to become entrepreneurs in the long-term, whereas last year’s study found that women were 11% less likely than men to want to go it alone. While the report found general interest in entrepreneurship to be down this year due to COVID-19 and Brexit’s impact, women remain more likely to want to start their own business in 2021.
The growing desire among women to become entrepreneurs despite the economic climate could be down to the impact COVID-19 has had on their working and personal lives. Some have dubbed the current recession the ‘shecession‘ as the pandemic has so badly impacted women’s’ careers. Not only are women more likely to lose jobs as a result of COVID-19 due to the sectors they tend to work in, such as retail and hospitality, but hiring rates for women in late 2020 also dropped, leaving many women without a job.
Women as entrepreneurs and caregivers
While men may have put the brakes on their entrepreneurial ambitions this year, for some women, they have little to lose with the pandemic facilitating rather than hindering their chances of becoming an entrepreneur.
Apart from being forced into self-employment life through redundancy, women may want to become entrepreneurs to maintain career flexibility, including remote working, that many employees have experienced over the coronavirus period, and have benefitted from in terms of wellbeing and productivity.
Thirty-three per cent of the survey’s participants cited a desire for “better work/life balance” as their reason for wanting to start their own business. As women make up the majority of those wanting to become entrepreneurs in the study, women who have families may want to run their own business to balance their roles as professionals and caregivers. Being self-employed could mean working mothers spend more quality time with their children as they can choose how, where, and when to work. If these female entrepreneurs choose to work from home, they could also save on childcare costs following the pandemic.
The most popular reason among respondents for starting their own business was being able to “choose what work they do” (41.7%). This could also apply to entrepreneurial women who enjoy the freedom of choosing the type of work or workload that fits in with their wider lives and additional responsibilities, whatever they are. In fact, a US study by McKinsey and Lean In last year found that one in four women were considering reducing their hours or leaving their jobs due to “company inflexibility, caring responsibilities, and stress.”
Gender inequality and female entrepreneurship
While the survey shows a growing desire among women to start their own businesses, it doesn’t mean we will see more female entrepreneurs around as women-led businesses are still more likely to fail than male-led enterprises. However, this is mostly down to a lack of financial and social support for female founders and their businesses rather than any women’s innate inabilities to lead. In 2019, the UK government-sponsored Rose Review of Female Entrepreneurship outlined the gender gap at play in the entrepreneurial world and found that only one in three British entrepreneurs were female.
Like other minority-led startups, female-founded businesses also tend to receive less funding, making them more vulnerable to economic downturns. Across the US and UK women of colour founders, in particular, struggle to gain funding.
While growing female interest in entrepreneurial life is a positive sign for diversity and inclusion in the business world, more needs to be done to help women maintain their roles as entrepreneurs and business owners. While there are several aspects to entrepreneurship that could liberate female professionals, including work flexibility for those with caregiving responsibilities and potential childcare costs saved by working for themselves from home, these matters are redundant if female-founded businesses don’t survive.
To remedy this issue, startup funders such as venture capital firms must be encouraged to spread their early-stage business investments more evenly across different groups. This includes considering female, and other minority-led pitches and startups as much as their typical white-male candidates.