Patricia Hewitt on women in business
The government minister gives her views on UK businesses and changing the status quo
Do women still have to fight harder to succeed in business? Why?
It’s probably true that women have to fight harder for success. Women often start in business with less capital, less management experience and fewer business contacts than their male counterparts – so they must work even harder to make their businesses work. But it is noticeable that more women are taking the plunge and starting on their own. And we’re seeing attitudes to women in business change, albeit slowly. Only 12-14% of businesses in the UK are majorityfemale owned and the evidence shows that women still have to overcome more hurdles than men in becoming entrepreneurs. Women still have more than 80% of the caring and domestic responsibilities in the UK and they face real challenges balancing work and family life. This can contribute to a lack of confidence in their ability to get a business going and it seems that women still find more difficulty in finding financial and other support. In April the Government introduced a whole package of improved family-friendly working rights which offer parents more choice and support than ever before.
In which areas of business are women particularly disadvantaged or treated differently to men?
Raising capital is certainly still an issue. Research shows that where the average male-owned business raises around 70% of its financial requirements through banks and other external sources, the equivalent figure for female-owned enterprises is just over 30%. Women appear to use sources such as personal savings and family loans before they’ll approach a bank. The level of capitalisation in femaleowned businesses is therefore lower and tends to remain that way – an issue that could prevent women’s businesses from growing at the same rate as men’s. The proportion of VC or ‘angel’ funding going to female-owned businesses in the UK is tiny – less than 2% of the total. So there are major opportunities to encourage equity funders to consider a more diverse range of investments.
Are women entrepreneurial enough? Why are there so few? Is that changing?
Many women are naturally entrepreneurial – they have to be able to cope with the conflicting demands of family life and work on a daily basis – but many do not see themselves as ‘entrepreneurs’. Perhaps the term itself is misleading. An entrepreneur is perceived as someone special or extraordinary – a Richard Branson or an Anita Roddick. We need to encourage women to recognise and value their talents, skills and experience and put them into a business perspective.
From your experience of talking to businesswomen, how do you think female entrepreneurs feel? Empowered, embattled, downtrodden, determined to make a difference?
I certainly don’t think businesswomen feel downtrodden. I think any woman who has successfully established a business feels empowered, committed and determined. This isn’t to say that she won’t continue to have real challenges and issues to face along the way. Some women who have successfully got started in business only encounter genderrelated problems when they decide to expand their business and, for example, find growth capital hard to achieve. Although explicit discrimination or bias is now rare, many women still come up against attitudes and barriers which prevent them from developing in the way that they want. But I’ve met many truly remarkable women who have overcome many hurdles, achieved great business success and who are now actively helping others to do the same.
What can and is the government doing to encourage and nurture women entrepreneurs?
The Government is committed to creating an environment and a culture that encourages more women to start businesses, and where every woman who wants to start – or grow – a business is given the necessary help and support. That is why we have developed a national strategic framework to provide a co-ordinated and long-term approach to the development of women’s enterprise.
The DTI published the Strategic Framework for Women’s Enterprise in May this year. It aims to encourage a long- term change in the cultural and social attitudes to women in business. It provides the policy context for why we need to encourage more women into enterprise – and, importantly, provides practical ideas and guidelines for business support organisations, such as banks, to encourage the provision of better business advice, access to finance, mentoring, networking and much more.
The Government is encouraging agencies and networks at regional level to develop women’s enterprise action plans and some tangible developments are already taking place. In the north-east, for example, the Business Links are bringing all the relevant bodies together and through existing women’s business networks are ensuring that the right level of advice, training and assistance are available to any woman who wants it – and they will particularly target women who have specific challenges.
How does the UK compare to other countries for female entrepreneurs?
It is estimated that women constitute around 27% of the total numbers of self-employed people in the UK and about 12 to 14% of businesses are wholly owned by women, compared with 44% by men. When compared with other countries, female participation in self-employment and business ownership, the UK is on a par with that of most European countries, but lower than in the USA, where a woman’s share of ownership is estimated to be 28%. The overall aim of the Women’s Enterprise Strategic Framework is to increase the numbers of women starting and growing businesses in the UK, to proportionately match or exceed the level achieved in the USA.
Should women be encouraged to set up businesses over men?
Positive ‘discrimination’ is illegal. What we want to do is achieve a level playing field and in order to do that, we recognise that positive action may be required, particularly when women are at that early stage of developing a business. This may take the form of women-only business training courses for example – research shows that this will encourage many women to make the first move. But anything that is done to improve the environment for women in business automatically makes it better for everyone.
If women started up businesses at the same rate as men, a further 100,000 businesses would be created every year. That is why we need a co-ordinated approach to increase the number of female entrepreneurs. This is vital, not just to ensure that women have the same chance as men to fulfil their potential, but also, so that our economy benefits from their creativity and innovation.
Is support for female entrepreneurs adequate? Why do women have to set up their own networks?
The Strategic Framework highlights areas of support which need to be strengthened – and networking is one of them. Women set up their own networks because they value networking with other women. A businesswoman’s network in Merseyside recently identified the benefits they got from regularly meeting up. They included: sharing information; idea generation; support; contacts; inter-trading; inspiration; motivation & confidence-building; and mentoring. What’s holding female entrepreneurs back – talent, opportunities, backing, fitting into a male environment? And what can change that? It’s certainly not talent or opportunities – but we have to accept that many women still face barriers and these can also contribute to a lack of self-confidence and self-belief.
The situation is not going to change overnight, but the culture is changing – more women start-ups, more self-employed women, more family friendly workplaces, action to get more women in Britain’s boardrooms – all will have an effect. Attitudes towards women have changed dramatically in the 30 years I have been involved in public life so I am confident that with the right policies, positive action and support that we can help ensure women can start-up and develop more successful businesses than ever before in the UK. Far from being held back women are making positive steps.