The number of women setting up a business in the UK still lags behind Canada, Sweden, Singapore, the Netherlands and the US, costing the UK economy £1bn annually, according to research published yesterday by Natwest.
The proportion of the UK’s female working population starting a business nearly doubled from 3.7 percent to 7.1 percent between 2009 and 2012, but has slumped since.
In 2015, Canada was a global leader for female entrepreneurship growth, with 13.5 per cent of women setting up their own businesses, followed by the US at 9.2 per cent, the Netherlands at 7.3 percent, Singapore at 7.2 percent and Sweden just ahead of the UK at 4.7 percent.
If the UK had sustained 2012’s level of female entrepreneurship, the country could have added £1.35bn to its economy in 2015 alone.
Heather Melville, director for strategic partnerships and head of business inclusion initiatives at RBS, the parent company of Natwest told Verdict that mentoring schemes are vital if the UK wants to rise up the global ranks when it comes to women starting their own businesses.
“It is really important to connect women to other female entrepreneurs who have been through the same journey. The work we do at Natwest helps to give women the support they need. We are one of the only UK businesses that has a really strong female entrepreneurial proposition,” she said.
The bank puts female entrepreneurs in touch with relevant local organisations, professionals and strategic partners.
Natwest’s research also revealed that there are stark regional differences across the UK in terms of female entrepreneurs.
London leads the way, with 33,200 new companies launched by women in the capital during 2015 but northern cities like Edinburgh saw just 1,400 new businesses started by women over the same period.
Pip Murray, founder of Pip & Nut, an all-natural nut butter brand thinks London is a hub for start-ups — but other regions deserve more funding.
“In London, you have a lot more access to funding and a support network. We need to invest more in other regions across the UK. Starting out can be very lonely and without the network London provides, it’s a lot harder,” she told Verdict.
“It’s much more accepted to be a start-up operating in London, whereas in other regions it’s still considered quite unusual. The draw of London is that you also have more businesses to sell your product to.”
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Steve Lucas, an economist and managing director at the consultancy Development Economics, agrees that some parts of the UK are less willing to move away from traditional business models.
“The UK has a reputation for being more risk-averse and in some cases having excessive red tape that might constrain entrepreneurship,” he said.