Women in business: a turning tide?
Reflecting on International Women’s Day, which each year brings a wave of celebration and growing optimism, we might be seeing tangible improvements in the environment for female entrepreneurship in the UK. Despite women still being underrepresented in the business world in 2024, the tide seems to be changing.
London-based lawyer and Ignition partner – Tammy Evans
Recent Studies
The barriers to progress range from funding shortages and gender bias to insufficient support and family responsibilities.
Funding remains the most significant obstacle. The UK Treasury’s 2019 Alison Rose Report revealed that female-led businesses receive less funding at every stage of their development. Launching a business is already challenging, and doing so with 53% less capital than male counterparts is even more daunting.
Gender bias significantly contributes to this funding gap. A 2022 Simply Business survey of female business owners found that 91% felt gender bias was a major issue in business. Female entrepreneurs often encounter discrimination, stereotyping and unconscious bias from investors, customers, and even partners.
The Alison Rose Report noted that women are twice as likely to identify family responsibilities as an obstacle to entrepreneurship when compared to men. This societal expectation highlights the need to support and celebrate female business owners and leaders through mentoring and aspirational thinking.
Addressing this issue is crucial. Research by McKinsey & Co shows that companies are 21% more likely to outperform competitors on profitability if they have greater gender diversity.
How is the UK business environment evolving?
Positive Signals
The 2023 Rose Review Progress Report highlighted several encouraging trends:
150,000 new UK companies were formed by women in 2022 – more than twice the 2018 number.
Among these, 17,500 were formed by individuals aged 16-25, a 22-fold increase compared to 2018.
20% of UK businesses are now female-led – up from 16% in 2018.
Better Funding
We now see dedicated efforts to ensure access to early-stage investments as well as ongoing support, and acknowledgement of the need to dismantle these barriers.
In 2023, the Investing in Women Code received 190 signatories, including 30 banks (four of the UK’s big six) and non-bank lending bodies, all committed to fostering an inclusive culture of and enhancement of access to capital for female entrepreneurs.
Specialised venture capital funds for women are now more common, with 133 companies on board with the Investing in Women Code. Alternative sources of funding like angel investments and crowdfunding are also more accessible, supported by initiatives like the Women Backing Women campaign.
Flexible Working
The way we work is changing, accelerated by the pandemic of 2020, benefiting those who balance business demands with family responsibilities. New regulations around flexible working, effective as of April 6, 2024, will allow employees to request flexible work from their start with a new employer, and with an obligation for employers to discuss these requests.
This development supports primary caregivers, mainly women, and acknowledges a vast, previously underutilised resource.
Direct Support
The ecosystem for female entrepreneurs is expanding rapidly. Numerous female-focused communities and networks offer skill development, support mentoring, and professional resources.
Overcoming self-imposed limitations is crucial for real progress. The Rose Review Progress Report highlighted that, alongside partners, it has provided over 800,000 direct support opportunities for female entrepreneurs.
Significant progress has been made in advancing opportunities for female entrepreneurship in recent years. While challenges remain, the signs of improvement are encouraging.
We are here to help you along any stage of your business journey. Please get in touch at info@ignition.law or contact Tammy Evans directly via tammy@ignition.law.
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