Entrepreneurship Policies through a Gender Lens

Scotland, United Kingdom

By Anne F. Meikle

Background

In Scotland, United Kingdom, one-fifth of all small and medium-sized enterprises (SMEs) are majority women-owned. Collectively, women-owned businesses contribute over GBP 8.8 billion (approximately EUR 9.7 billion) to the Scottish economy, and constitute 13.3% of private sector employment.

Scotland has a long-standing policy framework for women’s enterprise.1 Economic development has been devolved to the Scottish government with the inception of the Scottish Parliament in 1999, creating additional opportunities for women to engage in policy development. The Scottish Framework and Action Plan for Women in Enterprise aligns women’s enterprise policy with other national policy priorities, including the economy, labour market and entrepreneurship (Scottish Government, 2017); the framework is listed within the Scottish Government’s Economic Action Plan (2018, p. 20) as part of the strategy to drive entrepreneurship. Within the Scottish Parliament, delivery of the framework is supported by an action group chaired by the Minister for Business, Fair Work and Skills. The Women in Enterprise Action Group aims to “Realise untapped economic potential by tackling the gender gap across start-ups and growth companies, with action to deliver a sustainable model that collaboratively develops and monitors future gender-aware and gender-specific policies and interventions” (Scottish Government, 2017).2

Research finds that women entrepreneurs in Scotland are disadvantaged at various stages of business development (Federation of Small Business, 2016). Barriers such as: the availability of gender-aware start-up business support; few networking structures; lack of support for their business ideas, and limited access to low cost finance in early development have an effect on business growth. Support for childcare is also a key issue for women entrepreneurs. The policy framework seeks to address these barriers through actions, such as: improved measurement and use of sex-disaggregated data; creation of mentoring and networking opportunities; development of a women ambassadors programme; funding support for SME growth programmes; increased access to capital, and provision of gender-focused small business supports. Challenging gender stereotypes and misperceptions about women entrepreneurs and entrepreneurship as a career choice through education will also contribute to closing gender gaps (OECD/EU, 2017).

By way of counteracting the effects of gender stereotyping, there is an increase in calls for a greater focus on understanding and meeting the needs of women entrepreneurs through policy (EIGE, 2014).

Policy issue: Creating a gender-focused business support eco-system

Adopting a gender-focused approach to small business support is essential to ensure support services meet the needs of all entrepreneurs. On average, women entrepreneurs seek and prefer different kinds of advice to men, and seek more advice, particularly in the early stages of venture creation (Yazdanfar and Abbasian, 2015; EIGE, 2017).

Similar to other OECD economies, women entrepreneurs in Scotland tend to operate in certain sectors (OECD/EU, 2017). These sectors are not those which policy makers perceive to be ones with “high-growth” potential. Typical growth trajectories of women-owned businesses differ from those of men-owned businesses; this may be for a variety of reasons, including a need for women to balance business and family responsibilities. Women’s growth intentions can also be poorly matched to available business supports. Although micro and small businesses owned by women provide employment in local economies, and collectively make a significant contribution to the Scottish economy, small business services do not offer services of equal quality or status to companies being run by women (Federation of Small Businesses, 2018). Women have also expressed concern that a “hierarchy” of business support exists, with businesses in the more favoured growth sectors (mostly men dominated) receiving more specialised and tailored support while other sectors (mostly women dominated) receive a reduced access level of support (Women’s Enterprise Scotland, 2017; 2018). With a business landscape that is predominantly men dominated, strategies are required to mitigate outcomes where women entrepreneurs may have been missed.

Small business support services typically employ a “one size fits all” client approach. While this approach can claim to be “gender neutral” it can result in failure if services do not recognise that policies and programmes can have a different impact on women and men. A recent Scottish Parliament Committee Inquiry into business support services remarked that existing support packages are not suitable for all businesses, suggesting that “a range of tailored programmes” is required, with consideration given to how existing supports assist under-represented groups of entrepreneurs, including women. The Committee also recommended that the government create a national role (a Head of Women in Business) to co-ordinate policy in business support (Scottish Parliament, 2019).

Pre-start or early business stage supports produce economic benefits. In Scotland, such supports are not broadly available or accessible. Research by Women’s Enterprise Scotland reports on the lack of mainstream business support for women-led businesses that have evolved from early start-up but fail to meet the eligibility criteria for next stage business support (e.g. they do not meet the programme expectations on turnover, projected growth or scale-up; they operate in sectors that are not considered to have high growth potential). The “missing middle” impacts the capability of businesses to sustain start up momentum and scale-up; for example, only nine women-led scale-up programmes currently exist in Scotland.3

Conclusions and recommendations

Without an inclusive and informed entrepreneurial ecosystem, women will remain 20% less likely to benefit from government funded support compared to men (EIGE, 2017). This inhibits economic growth. Despite a policy framework and action plans, women entrepreneurs continue to be restrained by institutional and market failures, making access to resources, such as capital and scale-up programmes, more difficult for women compared to men (OECD/EU, 2017). “Traditional” misperceptions about women entrepreneurs (e.g. women lack ambition, are less capable, and are interested in developing only certain types of smaller businesses) must be challenged through targeted initiatives. More gender-based analyses are required to release the “untapped potential” of women entrepreneurs and further emphasise the importance of women-owned businesses to the Scottish economy (FSB, 2018).

Recommendations for Scotland, United Kingdom

• Address the gender gap in enterprise and improve provision of business supports by developing a national women’s business centre. The mandate would be to provide physical and digital delivery of ”needs-based” small business supports for women, creating appropriate initiatives and interventions through a national headquarters and regional hubs.

• Improve business support for potential women entrepreneurs by strengthening collaboration among ecosystem agencies. This includes aligning local and national policies, including the Framework for Women’s Enterprise, and developing a professional diversity training development programme for support staff.

• Undertake gender-based analyses of small business surveys conducted by the Scottish Government to provide more evidence for policy development (e.g. reporting using gender-disaggregated findings).

References

European Institute for Gender Equality (EIGE) (2017), “Economic Benefits of Gender Equality”, https://eige.europa.eu/publications/economic-benefits-gender-equality-eu-economic-benefits-gender-equality-eu-policy-context.

European Institute for Gender Equality (EIGE) (2014), “Good Practices in Women’s Entrepreneurship”, https://eige.europa.eu/publications/factsheet-good-practices-womens-entrepreneurship.

Federation of Small Businesses (2018), “Supporting Women’s Enterprise in the UK: The Economic Case”, https://www.fsb.org.uk/resource-report/supporting-women-s-enterprise-in-the-uk.html.

Federation of Small Business (2016), “Women in Enterprise: The Untapped Potential”, https://www.fsb.org.uk/resources-page/fsb-to-launch-women-in-enterprise-taskforce.html.

OECD/EU (2017), “Policy Brief on Women’s Entrepreneurship”, OECD Publishing, Paris, https://doi.org/10.1787/f493861e-en https://www.oecd.org/cfe/smes/Policy-Brief-on-Women-s-Entrepreneurship.pdf (accessed 13 July 2019).

OECD/EU (2017), The Missing Entrepreneurs 2017: Policies for Inclusive Entrepreneurship, OECD Publishing, Paris, https://doi.org/10.1787/9789264283602-en.

Scottish Government (2019), “Women and Enterprise”, https://onescotland.org/nacwg-news/women-and-enterprise-what-we-already-know/.

Scottish Government (2018), “Economic Action Plan”, https://economicactionplan.mygov.scot/.

Scottish Government (2017), “Scottish Framework and Action Plan for Women in Enterprise”, https://www.gov.scot/publications/scottish-framework-action-plan-women-enterprise/.

Scottish Parliament (2019), “Business Support. Economy, Energy and Fair Work Committee Report,” https://digitalpublications.parliament.scot/Committees/Report/EEFW/2019/2/20/Business-Support-1#.

Women’s Enterprise Scotland (2018), “Response to Scottish Parliament Business Support Inquiry”, www.wescotland.co.uk.

Women’s Enterprise Scotland (2017), “Women in Enterprise: Research Report”, www.wescotland.co.uk.

Yazdanfar, D., and S. Abbasian (2015), “Gender and the use of external business advice”, International Journal of Gender and Entrepreneurship, Vol. 7, No. 1, pp.105-124.