Women-owned businesses held back by funding void
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Women-owned businesses contribute a staggering £105bn to UK economy, but female entrepreneurialism in manufacturing and other high growth sectors remains more elusive, says new research published by the Federation of Small Businesses (FSB).
- FSB research revealed at Facebook’s Community Boost in London, shows an estimated 40% increase in UK economic contribution and a 26% increase in employment generated by women-owned businesses
- A quarter of private sector employment (23.85%) is now calculated to be generated by women-owned and women-led businesses
- Diversity in manufacturing and higher growth sectors is still a challenge, with a reduction in the proportion of women-owned firms in these sectors
- Women are increasingly becoming the job creators and growth drivers in the UK
The economic argument
The Federation of Small Businesses’ report, Supporting Women’s Enterprise in the UK: The Economic Case, shows that women-owned businesses are now calculated to contribute a staggering £105bn to the UK economy, an increase of 40% since comprehensive data was last collected and analysed. This equates to women-owned businesses contributing £36,000 Gross Value Add (GVA) for each person they employ, 6.3% of total UK GVA.
Despite the rise in female founders overall, the proportionate contribution from women-owned businesses in manufacturing has declined. Worryingly, the report findings show that over the period studied (2012 – 2015) there has been a reduction in the contribution of the manufacturing sector to women-owned businesses’ GVA (from 14.9% to 11%) and proportion of employment (from 8.7% to 7.1%). This is concerning because manufacturing is a relatively high profit sector. A larger proportion of women-owned businesses are in the care sector which has low profit.
The contribution women make to the UK economy is even more significant when the estimated GVA of women-led businesses is included. The research shows that women-led and women-owned businesses are estimated to contribute £221 billion, representing 13.3% of total GVA.
Across UK nations, using available data, the estimates show that Wales (7.24% of GVA) and Northern Ireland (9.23% of GVA) lead the way in the contribution women-owned businesses make to their economies. Northern Ireland has seen the biggest increase since 2012 with just under four percent increase in GVA.
The Supporting Women’s Enterprise in the UK: The Economic Case report is being launched at Facebook’s Community Boost two-day event on 13th and 14th November at London’s Millbank Tower. Across the two days, attendees can join a series of free-to-enter workshops and talks designed to help boost their digital skills, expand their networks and grow their businesses both in the UK and further afield.
Commenting on the launch of the report with Facebook, Nicola Mendelsohn, Facebook’s VP EMEA said: “We all have a role to play in addressing the diversity imbalances that exist around the world. It’s unacceptable that our culture is still hard-wired against women in leadership roles. Until that changes we need to find ways to get behind the women who want to step forward and lead, to give them the skills and courage to succeed. Through our #SheMeansBusiness programme, which empowers thousands of entrepreneurial women by offering them training, tools and practical advice, we discovered that one of the main barriers holding women back is a lack of confidence and digital skills. Together with the Federation of Small Businesses, Enterprise Nation and AllBright, we’ve already trained 13,000 women in the UK this year, providing them with the tools, networks and know-how to start a business and to grow it. We have big ambitions for 2019 and I can’t stress enough how important it is to work together to achieve change.”
Lina Bourdon, FSB’s Women in Enterprise lead, said: “Developing and supporting women’s enterprise is proven to be critically important for economic prosperity. The government must now address this untapped potential with a range of suitable measures, such as career advice, role models, and access to business support and finance.”
Carolyn Currie, CEO of Women’s Enterprise Scotland, which compiled the report for FSB, said: “Our research shows that women-owned businesses are providing critical employment in communities across the UK and now represent 11% of total private sector employment. We must ensure that this momentum continues, and we are calling for economic development organisations to step forward and provide the needs-based support that these businesses need to continue growing. With dedicated resources and support, women-owned businesses have the opportunity to harness the momentum already created and continue to grow their economic impact and value across all areas of the UK and all sectors.”
>See also: Huge opportunity for women in business