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Member blog: Gender and enterprise – The use of entrepreneurial support organisations by men and women
In the summer of 2023, a research project led by Colin Gilfillan of Shared Enterprise CIC and Andrew Jones of London South Bank University (both longstanding IED members), took a look at a strange phenomenon. Why do so many more women than men use the services offered by Shared Enterprise? The various sources consulted revealed a somewhat puzzling paradox: there are far more enterprises in Britain led by men than are led by women, yet women seem to use entrepreneurship support services far more than men.
In the 2021 Longitudinal Small Business Survey, conducted since 2015 by the Department of Business, Energy and Industrial Strategy, only 20% of very small businesses (no employees) were led by women, and 60% were led solely by a man. A similar proportion – 19% – of small and medium sized enterprises (SMEs) with employees were defined as led by women.
The apparently lower propensity among females to start or run a business has attracted government interest, one product of which was the Rose Review published by HM Treasury in 2019. Its findings are based, among other things, on a large survey of both male and female entrepreneurs and non-entrepreneurs. The review showed that women in the UK were less likely than men to embark on all stages of the ‘entrepreneurial journey’ (from start-up to scale-up). Barriers to female entrepreneurship included difficulties in accessing finance, family care responsibilities, and a higher level of risk-awareness among women than men. It was found that women were less likely than men to know other entrepreneurs or to have access to sponsors, mentors, or professional support networks.
Entrepreneurial support organisations (ESOs) are organisations whose primary, often sole, purpose is to support start-ups and small businesses. A worldwide phenomenon, they can be private or public agencies, for profit or not, entrepreneurs, or charities. Shared Enterprise differs somewhat from many other ESOs in that their ‘Enterprise Clubs’ are facilitated by alumni, with the element of peer support and guidance being a distinguishing characteristic. The Clubs aim to empower members to gain confidence and to learn from and inspire each other. Some 25 Shared Enterprise Club members were interviewed for the research.
As part of the project, a small number of other ESOs in London were interviewed. All said the majority of their participants were women, with the proportion ranging from 60-70%. None could explain conclusively why. It was pointed out that some funders nudge ESOs into ensuring that a sufficient proportion of their participants are female, but it was also said they have never had any difficulty in meeting targets.
Interviews with Shared Enterprise Club members revealed that a far higher proportion of male members than female members – 81% versus 60% – had ran a business before. This meant that more men than women had entrepreneurial experience, and had had access to informal sources of advice. This led to the tentative conclusion that women use ESO services more than men for the simple reason that they need them more.
As often happens, this investigation raises as many questions as answers. To fall back on gender stereotypes, if only to hypothesise, is it the case that men are deluded in thinking they don’t need support? Perhaps, as seemed to be overwhelmingly the case among those interviewed at Shared Enterprise, men are more likely to take risks without thinking through the consequences. If the consequences are business failure and all that entails, debt, bankruptcy, and much more besides perhaps this is an issue that warrants further investigation. Do men really not need ESO services as much as women, or do they just think that?
According to the ONS, only slightly more than 40% of businesses born in 2015 survived for more than four years. Given the high proportion of businesses led by men, it is likely that many of these failed businesses were male led. Perhaps ESOs should worry about men more and find ways of engaging with them. It would be interesting to hear about the perspectives and thoughts of other IED members.
Authors: Colin Gilfillan, Shared Enterprise CIC; and Andrew Jones, London South Bank University. A full paper has been published in Local Economy, the journal of the Local Economy Policy Unit.