Written evidence submitted by Dr. Farzana Chowdhury (Associate Professor at Durham University) [FEN0016]

Creating a Supportive Environment for Female Entrepreneurs

Farzana Chowdhury, Ph.D.

Position: Associate Professor

Affiliation: Department of Management and Marketing

Durham University Business School, Durham, UK
Email: farza.chowdhury@gmail.com, farzana.chowdhury@duham.ac.uk

Phone # (44) 0191 33 45221; (44) 07719164627; (+1)812-360-9358

Brief Bio

I am an Associate Professor at Durham University Business School. My research resides at the intersection of business strategy and entrepreneurship, focusing on new venture creation, female entrepreneurship, innovation, and decision-making. It seeks to understand factors such as resources and institutional context that influence entrepreneurs' behavior and decisions about new venture emergence, creation, and innovation.

The purpose of this evidence is to provide an overview of the challenges that female entrepreneurs in the UK are facing.

This call for evidence addresses the following questions: What are the barriers facing women, including specific groups of women from an ethnic minority background, seeking to start and grow successful businesses in the UK? The evidence provides an overview of female entrepreneurs' challenges in starting and growing their businesses and the support schemes that can be helpful for female entrepreneurs.

Background

This call for evidence addresses the following questions: What are the barriers facing women, including specific groups of women from an ethnic minority background, seeking to start and grow successful businesses in the UK? This piece of evidence provides an overview of female entrepreneurs' challenges in starting and growing their businesses and the support schemes that can be helpful for female entrepreneurs.

For many female entrepreneurs, entrepreneurship through starting a business or self-employment serves as a route to emancipation from discrimination and other hardships through seeking autonomy, authoring, and making declarations by meeting financial and family needs. Evidence suggests that female entrepreneurs have made significant progress in forming businesses. Despite progress in this area, female entrepreneurs still face different challenges, which are even more severe for minority women.

1. According to Companies House data, 19.1% of UK companies were led by females in 2024[1]. The number was higher in 2023; women led 20.1% of businesses in the UK[2]. The entrepreneurial framework condition considers thirteen pillars that describe a country’s entrepreneurial context. However, national experts rate only two of the thirteen pillars as sufficient (Figure 1).

Figure 1: Entrepreneurial Framework Conditions in the UK in 2023

Source: Adopted from GEM 2023/2024 UK National Report

2. To engage in entrepreneurship, people need to understand that there are good opportunities. Global Entrepreneurship Monitor (GEM) survey data indicate that female entrepreneurs perceive less opportunity in their local area. At the same time, they also have a higher fear of failure than men (Figure 2). In 2019, 55% of the women mentioned that fear was a significant determinant of their decision not to engage in entrepreneurship[3] (Figure 2).

Figure 2: Perceived opportunities and fear of failure by gender.

Source: Adapted from GEM report, 2024

Lack of support elements

Challenges of Caring Responsibility

Female entrepreneurs face the challenges of caring responsibilities.

3. Research on entrepreneurship and work-life balance suggests that work/family conflict significantly contributes to female entrepreneurs' engagement in entrepreneurship due to location, work schedule, and work hours flexibility[4],[5],[6]. Figure 3 shows that women spend more time on care and household work than men; caring responsibilities predominantly fall on females and are unpaid work.

Figure 3: Average time spent on care work by women compared to men

Source: https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/datasets/timeuseintheuk

4. Engagement in entrepreneurship allows men to receive preferential treatment from family but participate less in domestic work; female entrepreneurs do not receive the same treatment[7],[8],[9],[10],[11]. They continue to care for their families while also running the business, which leads to time constraints for their business and their families.

Challenges in intermediary/support organisations

Entrepreneurs participate in support organisations such as accelerators and incubators to access mentorship, educational components, resources, and an opportunity to develop their networks and access financial resources. However, the benefits of these programs have been mixed[12].

5. Accelerators and incubators vary in the types of services they provide. While there are some overlaps in their services, admission into the accelerator programs is very competitive. The location of these programs is also a significant barrier. Many of these programs are often located near urban areas rather than near rural or remote areas. For female entrepreneurs, participating in these programs from remote areas can be challenging due to commuting time requirements and family responsibilities. Figure 4 below shows the number of accelerators and incubators in the UK. Female entrepreneurs' participation in these programs is very low (<10%), while minority women’s participation is even lower[13],[14].Even when they participate, they are discriminated against, feel out of place, and feel as though they have to act like their male counterpart to be heard or respected[15],[16].

                                                                 Source: https://www.centreforentrepreneurs.org/research/report/incubation-nation/r/recqS0zPeG1xcTAjG

Challenges of marginalised female entrepreneurs

People in marginalised groups (e.g., minorities and disabled) continue to face challenges.

6. Entrepreneurship also acts as a venue for people with disability to generate income and gain social inclusion[17],[18],[19],[20]. A 2018 study found that 11% of the entrepreneurs had bipolar disorder, and 29% had attention deficit hyperactivity disorder (ADHD), suggesting a prevalence of mental health diversity among entrepreneurs[21].

7. When it comes to immigrant entrepreneurs, female immigrant entrepreneurs are less likely to engage in entrepreneurship. Figure 5 reflects the female entrepreneurship rate among regional migrants, and Figure 6 reflects the female entrepreneurship rate among migrant female entrepreneurs; entrepreneurship is measured by total early-stage entrepreneurial activity[22].

Figure 5: Total early-stage entrepreneurial activity rate of regional in-migrants by gender

Source: Global Entrepreneurship Monitor Report

Figure 6: Total early-stage entrepreneurial activity rate of immigrants by gender

Source: Global Entrepreneurship Monitor Report

Lack of mental health support

8. Male entrepreneurs receive more support (both emotional and practical) when they engage in entrepreneurship[23]. Female entrepreneurs experience loneliness due to social isolation[24],[25] and overly rely on ‘friends and family’[26].

Essential Resources Necessary for Entrepreneurship

Financial skills

Digital financial skills have implications for financial outcomes. Individuals with high digital literacy can find financial resources and opportunities for savings38.

9. Accessing financial resources for entrepreneurs is one of the most prominent challenges female entrepreneurs face. One-third of entrepreneurs mention that accessing financial resources is the biggest barrier3. They are less likely to receive bank loans, and only 1% of female-led ventures receive venture funding32,[27],[28].

Knowledge and work experience

10. Industry experience, entrepreneurial experience, digital knowledge, financial knowledge, and formal and entrepreneurial education[29],[30],[31] significantly influence individuals’ motivation to engage in entrepreneurship. Female entrepreneurs face inequality in these areas[32],[33]. Female entrepreneurs tend to lag in all of these areas; only 39% of women believe that they have the ability to start a business compared to 55% of men[34].

Digital skills

Digital skills can enhance female entrepreneurs’ ability to search for markets to access new customers, supplies, and other resources[35],[36],[37],[38]. However, they lag significantly behind their counterpart.

11. According to the 2024 Lloyd’s Consumer Digital Index report, it is estimated that most people are proficient in using social media such as YouTube and Instagram (83% of male and 74% of female internet users used YouTube to watch videos, and 47% of female and 39% of male used Instagram)[39]. Male internet users are also more aware of AI-generated content (33% vs 22%). Even though people can use entertainment and social networking platforms, women lack essential skills at the foundation level, life skills, and work skills; 44 percent of women can complete all 20 essential tasks for work than 52 percent of men. Cloud computing is also a challenge for female entrepreneurs, as many people are uncomfortable using the cloud even though the cloud can be a source of financial benefits (26% female vs. 19% male), and 17% of self-employed people are not comfortable using the cloud[40],[41].

Policy considerations

1. Increase income support, business-related skills, and digital literacy for female entrepreneurs.

Solo entrepreneurs do not receive Statutory maternity pay. Expanding the income supplement scheme will help reduce income insecurity, increase well-being due to ‘peace of mind,’ and lessen the burden of the stress of caring responsibility. Providing entrepreneurship-related training and digital work-related training will help increase the confidence of female entrepreneurs.

2. Increase accessibility in intermediary/support organisations

There has been an increase in awareness about entrepreneurship being a positive alternative to regular wage jobs, but entrepreneurship-related education and training need further improvement[42]. Accelerators, incubators, and catapults provide these critical skills, but the lack of access to these organisations limits the benefits of these programs to female entrepreneurs. Some of these programs offer mentorship for the participants, but most fail to provide mentoring services. Therefore, a targeted effort to increase participation in these programs by female entrepreneurs where they feel that they ‘belong’ without acting like their male counterparts is essential, perhaps women-only programs. Tailoring programs to the specific needs of female entrepreneurs can significantly enhance their impact.

3. Community support through coworking space

Accelerators and incubators are significant support services for female entrepreneurs. However, since many are located near metropolitan areas or large population areas, coworking spaces can be an alternative solution for entrepreneurs. While coworking spaces do not provide financial support or education-related services, they can create opportunities for entrepreneurs to network by providing working spaces, meeting spaces, Wi-Fi, a kitchen, other amenities, and, in some places, childcare services for the coworking space members[43]. Coworking spaces are only available in London, Reading, Manchester, Birmingham, Bristol, and Leeds (coworker.com).

4. Place-based support for rural female entrepreneurs

We have data and information about female entrepreneurs[44],[45]. However, we have limited information about their locations. Female entrepreneurs in a large urban area can access resources that rural female entrepreneurs do not have[46],[47],[48],[49]. Creating support schemes for rural and remote female entrepreneurs can help reduce barriers.

5. Support for intersectional entrepreneurs

Academics have identified that female entrepreneurs with disability face challenges and use entrepreneurship as a vehicle to generate income and gain social inclusion[50],[51],[52],[53]. We have limited information about female entrepreneurs with multiple identities that are associated with stigma (i.e., Asian and disabled, Black, Asian and disabled, Black, Asian, disabled, and poor)[54],[55],[56],[57]. Support schemes tailored for these entrepreneurs, such as mentors and entrepreneurs (role models), can help to reduce barriers.

March 2025

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