Women and Entrepreneurship: Myths, Barriers, and Progress in the UK

Introduction and Definition of Entrepreneurship

The woman who heads her own company is no longer something exceptional. However, there is still a disparity in the number of entrepreneurs and businesses run and owned by men compared to women in the United Kingdom. A definition of entrepreneurship does not reveal any logical or innate reason for this disparity.

The conceptualization of entrepreneurship is complex and one that evolves with economic development. In the modern business context, it means combining various factors in an innovative manner to generate a dual collaboration between entrepreneur and customer that will result in the creation of wealth. While scholars from diverse disciplines have over time grappled to define the function of entrepreneurship, contemporary economists place the emphasis on a blend of innovation, coordination of productive resources, and persistent formation of new demand for products, production methods, markets, and forms of organization. However, the interpretation of entrepreneurship is relative to a particular economic environment.

The term entrepreneur was first introduced in the early 18th century by the French economist Richard Cantillon. "In his writings he formally defines the entrepreneur as the 'agent who buys means of production at certain prices in order to combine them' into a new product."

While entrepreneurial activities remain traditionally male-dominated, the number of women heading businesses has escalated over recent decades. Technological progress has not only advanced performance in commerce and industry — it has also streamlined domestic work, opening the doors for women to explore independent self-employment outside the home. The most booming business sectors in the UK today include personal services and complementary therapies. According to a study launched by the Yellow Pages Alternative Census, there is "a general trend towards a boom in women-dominated businesses." The report — the first ever study of business growth and decline within key Yellow Pages business classifications over ten years (1992–2002) — reveals that seven out of ten classifications registering the highest increases come from professions catering for beauty and body image, or alternative therapy and stress relief. Between 1992 and 2002, there was a 635% increase in classifications for yoga classes and a 969% increase in the number of nutritionists listed.

Implicit in this definition is the fact that entrepreneurship and business ownership is a means of combating discrimination and gender or class restrictions. The positive role of proprietorship for women relies on the idea that in the capitalist system, members of economically and socially deprived groups can "escape" deprivation through business ownership, which provides opportunities for self-determination through owning and controlling resources, and through an increased ability to flexibly interface work and domestic life (Goffee & Scase, 1983, p. 626).

The social conditions of the 1970s and 1980s made it easier in many respects for women to achieve proprietorship and independence in business. Margaret Thatcher also served as an inspiration to many prospective female entrepreneurs during this time. Her success in politics proved that women could achieve in any field. There are numerous cases of successful female entrepreneurs who have not only improved their own lives but have "made a dramatic impact on the perception of women in society as a whole." As Goffee and Scase put it, "female entrepreneurs have a symbolic importance which implicitly questions popular conceptions of the position of women in society."

Comparison Between Male and Female Entrepreneurs

A recent report on the differences between the participation rates of male and female entrepreneurs in the UK indicates that there is a large disparity in female participation in the business world. The Global Entrepreneurship Monitor (GEM) found that "the most significant issue for the UK is the low relative participation rate in entrepreneurship of women. The UK comes near the bottom of a global ranking based on decreasing differences between levels of male and female entrepreneurship."

Other studies reveal similar results, indicating not only this disparity between male and female entrepreneurs, but also the need to adjust the common view of the possibilities and potential for female involvement in business. The GEM report emphasizes the economic necessity for "an increasing proportion of women who wish to, and do, start a business" as one of three key challenges for the UK government.

Various findings also indicate that there are many areas pointing to significant differences and discrimination between male and female entrepreneurs. Some of these are summarized below:

Men are 2.5 times more likely to be entrepreneurs than women. The peak age group for entrepreneurship is 35–44 for men and 45–54 for women. Women are more likely to be involved in customer-oriented businesses, while men tend toward either business-related or transformative sectors. Women are relatively more likely to believe that they will create no jobs in the next five years.

In spite of these facts, there are also studies showing an increasing number of women succeeding as entrepreneurs in the UK. For example, a survey by NatWest states that "the number of women going into business for themselves has risen by 38% in the past five years." The report for 2000 shows that "women accounted for 124,000 of the UK's new business start-ups in the first three quarters of this year, compared to a figure of 90,000 new female entrepreneurs for the whole of 1995." The increase also saw women lift their share of new business start-ups by almost 10% during this period, so that they accounted for 35% of the total. NatWest estimated that the final number of businesses set up in 2000 would be around 460,000.

The NatWest report also identifies various attributes and differences in focus between men and women entrepreneurs. Women starting up in business are less driven by the desire to make a great deal of money than their male counterparts, and are more driven by a sense of personal satisfaction in providing a service. A sense of fulfillment also ranks highly for women when considering what they hope to get out of their business.

According to the report, women are most likely to run businesses in the retail sector (28%), and there are an increasing number of women starting up in the finance, professional services, and property sector. Other dominant types of entrepreneurial concerns run by women include hairdressing and domestic services businesses.

Another significant finding — one that concurs with various other studies — is that female entrepreneurs have markedly lower expectations when it comes to turnover compared to male entrepreneurs. "Women forecast an average turnover of just £58,000, with men forecasting a turnover of £140,000 in their first year. Just under half of female respondents expect a turnover of less than £20,000 in their first year."

Many reports also indicate a regional differentiation between men and women entrepreneurs in the UK: "28% of all women starting up new businesses are based in the South East, followed by 18% in the Midlands and 12% in the North West. Yorkshire (7%) and the North (5%) account for the fewest start-ups amongst women."

Other significant statistics are that most female entrepreneurs are aged between 25 and 34; 31% have a first degree or HND compared to 27% of men; and 26% have A-levels compared to just 21% of men.

Importantly, the NatWest report states that there has been a favorable increase in the number of women entrepreneurs. However, it also makes the point that "the gap between the number of male and female entrepreneurs starting up is still wide. There's no reason why we shouldn't have as many women as men starting up in business." The report also states categorically that gender has no significant impact on whether a business is successful or not.

This report is supported by many other recent surveys stating that the disparity between female and male entrepreneurs has no foundation in economic principles and is due essentially to discriminatory social perceptions. There is also the fact that the UK lags far behind other countries in female entrepreneurship levels. Female entrepreneurship in the UK has improved in recent years but still lags behind that of men, according to a joint report from the British Chambers of Commerce and Learning & Skills Council — sponsored Global Entrepreneurship Monitor. For every ten male entrepreneurs in the country there are only four female entrepreneurs — a gap that is wider than in Canada, the United States, Germany, the Netherlands, Belgium, and Italy.

On the other hand, there are numerous studies, reports, and surveys attesting to the increasing number of women running successful businesses. "One third (32%) of women business-owners have owned their firms for five years or less, compared to just 21% of men." Women-owned firms are also expanding in size as well as in their share of the marketplace. In 1998, 28% of women business owners had zero employees, but by 2000 this had fallen to 20%. During the same period, there was an increase in the number of women-owned businesses in the 1–9 and 10–49 employment size categories.

The idea that women do not make good entrepreneurs is further countered by research from Barclays Bank, which revealed that there are "nearly a third more women entrepreneurs than there were in 2000 ... there are now 150,000 women-run enterprises across the UK, with the South West leading the way nationally."

Women as Entrepreneurs: Notable Examples

There have been many cases of extremely successful female entrepreneurs at almost every level of business. A prime example is the success of Liliane Bettencourt, one of the wealthiest people in France, who inherited a controlling stake in L'Oréal in 1957. Another successful entrepreneur is Anita Roddick, founder of the Body Shop. Her beginnings were small and not without struggle. However, she used her business and marketing skills to build an enormously successful enterprise almost from scratch, initially packaging her cosmetic products in her garage. It is also noteworthy that when she sought to open a second shop in Chichester, she was turned down for an $8,000 loan at the bank.

An important aspect of her approach was a deliberate rejection of the exploitation of women in the cosmetic industry: "I hate the beauty business. It is a monster industry selling unattainable dreams. It lies. It cheats. It exploits women" (Graham, p. 479). This philosophy led Anita Roddick and her partner Gordon to develop the unique ethos of the Body Shop — their purpose was to create profits with principles. Not only did they want to make profits; they wanted to create social and environmental change.

The Body Shop grew from a small alternative store in England to a multinational company with 1,366 stores in 46 countries. Roddick is a perfect example of how successful women can be in business; she was also one of the five wealthiest women in the UK in 1993. She received numerous awards, including being named London's Business Woman of the Year in 1985 and being awarded the Order of the British Empire in 1988.

Conclusion

There are numerous examples that prove women are as capable as men in starting and running a successful business, and some reports claim that many women in fact do a better job than their male counterparts. One of the strongest indications of success and recognition among female entrepreneurs is the increasing availability of opportunities to assist the development of female entrepreneurs in the UK. One of the reasons for this increased attention is the realization that women entrepreneurs are being recognized as an integral part of the national economy. A recent report indicated the following facts:

There are now over one million women-owned businesses in the UK yielding a turnover of up to £1 million — representing one third of all small businesses. In the year to September 2003, the number of self-employed people increased by 8.9% (8.6% for men and 9.7% for women). The level of self-employment increased by 200,000 for men and 82,000 for women in 2003.

These statistics indicate the growing development of the female entrepreneurial sector and constitute convincing proof that the perception of women as incapable of achieving entrepreneurial success is unfounded. The real barriers to female entrepreneurship in the UK are structural and social — rooted in discrimination, limited access to finance, inadequate childcare provision, and a shortage of visible role models — not in any inherent difference in the ability of women to run successful businesses. Addressing these barriers through targeted policy and cultural change remains one of the most important economic challenges facing the United Kingdom.

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