Gender gap narrows among entrepreneurs as women excel with start ups

The number of women that went into business rose by 45 per cent over the last decade, compared to just 27 per cent among men

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The rate of entrepreneurialism in the UK has risen far faster among women than men in the past decade, new research has found.

Comparing 2003-6 and 2013-16, the number of women set up their own business rose by 45 per cent, compared to just 27 per cent among men a team at Aston University discovered.

Overall, men are still nearly twice as likely to be entrepreneurs, however, with 10.4 per cent of men running their own business versus 5.5 per cent of women.

The team studied data from 60 countries around the world, finding large geographical disparities when it comes to the gender "enterprise gap".

Within the UK, women in the South East are the most likely to start their own business, with 7 per cent describing themselves as early-stage entrepreneurs.

By contrast, just 2.8 per cent of women in the North East fall into this category. Most regions saw sizeable jumps in the proportion of female entrepreneurs over the past decade, but in the South West and North East the proportion fell.

The West Midlands is the region closest to gender parity, with 74 new female entrepreneurs for every 100 male ones there, compared to just 33 in the North West, which is the worst-performing region.

The researchers suggested these regional differences may be partly explained by the presence of higher numbers of graduates and mobile individuals including international migrants.

Across both sexes, the research found there were more early-stage entrepreneurs in the UK in 2016 than the previous year. The UK also fares well on an international level, with an early-stage entrepreneaurship rate of 8.8 per cent of the population, compared to 5.3 per cent in France and 4.6 per cent in Germany - confirming the UK as the start-up capital of Europe. However the figure is still significantly lower than in the US where 12.6 per cent of people are entrepreneurs.

Spain has the closest male/female ratio of any developed economy when it comes to start-ups, with 74 Spanish women entrepreneurs for every 100 male ones, compared to 53 for the UK.

Many developing economies display even higher rates of female entrepreneurship. In Ecuador, 31.9 per cent of women are entrepreneurs, while other Latin American and South East Asian nations dominate the top spots. Indonesia and Brazil are the only participant countries where there are more female entrepreneurs than male.

The research was part of Aston University's annual Global Economic Monitor Report which looks at a range of entrepreneurship indicators, coordinated by Professor Mark Hart of Aston Business School in Birmingham and Professor Jonathan Levie of the University of Strathclyde Business School.

Dr Karen Bonner, senior researcher at Aston Business School, said the reasons behind the continuing disparity between male and female entrepreneurship rates were complex:

“On the one hand, we could point to different societal expectations, with women still taking on the bulk of unpaid caring roles and entrepreneurship still stereotyped as a ‘male’ career choice in our wider culture,” she said.

“When asked why they started their business women are significantly more likely to cite ‘greater flexibility for my personal and family life’ and the desire for ‘freedom to adapt my own approach to work’ than men. But despite these differences, and controlling for other factors like sector, age and start-up capital, both men and women display similar levels of ambition when it comes to growing their businesses.

“We also observe a tendency for women generally to be more risk-averse which may make them self-select out of entrepreneurship, particularly in places where there are ‘safer’ employment options that allow them to work more flexibly around caring responsibilities. This would help to explain why places like Northern Ireland and the North East of England, with relatively high proportions of public sector jobs, have low start-up rates for both men and women.”