Women-led business contributed £3.51bn to the economy and created 77,000 jobs in 2015, according to new research by NatWest, a WEConnect International corporate member. However, despite a strong growth in female entrepreneurship overall since 2009, the number of women setting up a business in the UK still lags behind countries such as Canada and the US, costing the UK economy £1bn a year.
The research, undertaken in partnership with Development Economics, revealed that while the proportion of the UK’s female working population starting a business nearly doubled from 3.7% to 7.1% between 2009 and 2012, this has since tailed off, falling every year and standing at less than 5% in 2015. This is supported by ONS data which shows the number of businesses started by women increased every year between 2006 and 2013 from 58,000 to 139,000, before falling to 116,000 in 2014 and to 126,000 in 2015.
If the UK had sustained 2012’s level of female entrepreneurship growth in subsequent years to reach the levels of its commonwealth counterpart Canada, the UK economy would have enjoyed an additional £1.35bn in 2015.
Female entrepreneurs are central to the UK’s economy, setting up almost 1.2million business between 2002 and 2015. However, the study found that of all new businesses formed in 2015, around two thirds were set up by men, with women responsible for a third.
Alison Rose, Chief Executive of NatWest Corporate, Commercial & Private Banking, said:
“We know entrepreneurs are vital to the economy, and it’s fantastic to see just how much women contribute, but it’s clear we need to do more to power this growth in the same way our global counterparts do. At NatWest we have created numerous roles within the bank that are dedicated to providing tailored support for women to start up and succeed in business. It’s not simply about starting up, but supporting through all the business life stages. From introductions to relevant organisations to tangible day-to-day support, we want to go beyond providing financial services and help female entrepreneurs achieve their business ambitions.”
Commenting on the research, Steve Lucas, Managing Director of Development Economics, said:
“Women are a vital part of the UK’s enterprise economy, so it’s positive to see the rate of female start-ups has been increasing as women respond to opportunities across a wide range of business sectors. However, the UK still lags behind the likes of the US and Canada, which have a much higher proportion of female entrepreneurs. In these nations, the celebration of entrepreneurial qualities is something that is deeply embedded, whereas the UK has a reputation for being more risk-averse and in some cases having excessive red tape that might constrain entrepreneurship. If the UK is able to bolster its efforts to help female entrepreneurs, the opportunity for further economic growth is significant.”
Rebecca Hopkins, co-founder of British skincare company Balance Me, a WEConnect International women-owned business, said:
“I’ve absolutely noticed that there has been a surge in female entrepreneurs in recent years, certainly in the cosmetics industry. However I’m not surprised to find out that we are still quite far behind our global counterparts in the UK. I think this is because there hasn’t been enough guidance or encouragement from the government for women who want to start their own businesses. NatWest provided us with the most amazing relationship manager who really helped to de-mystify the scary parts of the next steps for growth for the business - there should be more people like this to help with the process!”
The research also looked at how the numbers of women-led businesses compared across the UK. Unsurprisingly London is the most popular location, with 33,200 new companies launched by women in the capital during 2015, followed by Manchester (5,200) and Birmingham (5,100).
To read the full NatWest report with lots of interesting statistics from the new research, click here