A Glaring Gender Gap in the UK’s High-Growth Entrepreneurship Ecosystem
A recent report has shed light on a troubling gender gap within the UK’s high-growth entrepreneurship ecosystem, revealing that this disparity is not just a statistic but a significant barrier to innovation and economic growth. Spearheaded by Anne Boden, the founder of Starling Bank, the Women-Led High-Growth Enterprise Taskforce has called for a comprehensive reevaluation of investment strategies, highlighting that only six percent of high-growth enterprises are wholly or majority led by women.
The Taskforce’s Mission
Established in May 2022, the Taskforce has collaborated with entrepreneurs, advocacy groups, and the investment community to gather crucial data and identify the barriers that women face in starting and scaling high-growth enterprises. The insights gathered have painted a stark picture of the challenges women entrepreneurs encounter, particularly in accessing funding and resources necessary for growth.
Funding Disparities
At the heart of the report’s findings is the alarming revelation that women entrepreneurs continue to struggle to secure essential funding. Despite some progress in recent years, women receive less than two percent of annual venture capital funding in the UK. This statistic underscores a significant gender disparity in the investment landscape, where male-led enterprises dominate funding opportunities.
To address this funding gap, the Taskforce has put forth several recommendations. One key suggestion is that investment companies should publicly disclose the percentage of senior investment professionals they employ, along with specific targets for gender diversity. Research indicates that female investment professionals are more likely to support female-led businesses. Additionally, the Taskforce encourages investment firms to sign up for the Investing in Women Code, which has shown that signatories are more inclined to back female-led companies—35 percent compared to 27 percent for non-signatories. Encouragingly, the number of signatories has increased by 40 percent since 2022.
Diversity Challenges
Beyond funding, women-led businesses face significant obstacles related to workforce diversity, leadership representation, and access to vital networks. The Taskforce’s findings reveal that only 18 percent of high-growth enterprises have one or more women on the founding team, while a staggering 82 percent are led by all-male teams. This lack of diversity not only limits the perspectives and experiences that inform business decisions but also stifles innovation.
Improving diversity in senior investment roles is crucial for enhancing the funding pipeline for women-led, high-growth businesses. Taskforce members agree that gender-balanced investors can offer a broader spectrum of insights, enriching the decision-making process and reducing the risk of groupthink.
Regional Disparities
The report also highlights significant regional disparities in high-growth entrepreneurship. Nearly 45 percent of England’s high-growth enterprises are concentrated in London, despite the fact that only 13 percent of the UK population resides there. This concentration raises concerns about the equitable distribution of resources and opportunities for women entrepreneurs outside traditional tech hubs.
To address this imbalance, the Taskforce recommends establishing Female Founders Growth Boards on a regional basis. These boards would bring together public and private local stakeholders to create tailored support networks and resources for women entrepreneurs, particularly in areas outside of London.
Boosting the Economy
Maria Caulfield, Minister for Women, emphasized the importance of addressing these disparities, stating, “The number of high-growth enterprises with at least one female founder is incredibly low, and the picture is even worse for all-female teams. This represents a shocking waste of talent and innovation.” She underscored the need to harness the skills and ambition of women to launch successful businesses, which is vital for boosting the UK economy.
The government aims to increase the number of female entrepreneurs by half—equivalent to nearly 600,000 entrepreneurs—by 2030. This ambitious target reflects a growing recognition of the untapped potential that women represent in the entrepreneurial landscape.
Boden’s Vision for Change
In her concluding remarks, Anne Boden expressed her commitment to ambitious recommendations, stating, “Making small incremental changes won’t move the dial. We’ve been talking about this being a challenge for too long. Now we need to take big strides forward.” She believes that building upon the work of the Taskforce is in everyone’s interest, regardless of gender, and that the timing is right to support female entrepreneurs in overcoming barriers to success.
Boden’s vision is clear: when these obstacles are removed, the potential for female entrepreneurs to drive innovation and contribute to economic growth is immense. The report serves as a call to action for all stakeholders in the entrepreneurial ecosystem to work collaboratively towards a more inclusive and equitable future.