In the ten years between 1992 and 2002, the number of women-owned businesses in the US doubled. Today, nearly half of all private companies in America are owned or controlled by women. It’s a success story our own government would dearly love to emulate; if we could match the rate of women-run enterprise here, 750,000 new businesses would be born. Business wouldn’t just recover; it’d be booming. So how do we do it?
1) Stop soul searching and copy America’s Women’s Business Act of 1988 – fund women’s business centres; eliminate discrimination against women by banks. Recent evidence from the UK Survey of SME Finances reported that women were charged more (2.9 per cent vs 1.9 per cent) than men on term loans. Now the government owns most of the banks, this must stop. 2) Create a large capital fund to invest in women’s business. In 2007, the Small Business Administration loaned $3.5bn specifically to women’s companies. They didn’t do this out of fairness or political correctness. They did it because they know that women-owned businesses are more profitable, create more jobs and are more likely to survive than the average start-up. Investing in success should not be controversial.
3) Set up a microfinance programme for women. In India, Africa and South America, micro-finance supports women’s start-ups. It works there; it can work here. Tiny amounts of seed funding make the difference between an idea and a vigorous company.
4) Establish a women’s network in every UK business school. Many academics dance around gender and women themselves can be coy about it, but entrepreneurs need role models and that’s what networks develop.
5) Put your money where your mouth is. Allocate five per cent of government spending to women’s businesses. Even in the US, the biggest hurdle women in business face is access to markets. The US target is five per cent and, so far, they’ve reached only three per cent. Surely we can do better?
6) Make public companies do it, too. The more enlightened ones already have diversity supplier strategies, but they’re more aggressive about them in the US. If you’re squeamish about telling public companies how to spend their money, start with the banks.
7) If you treasure it, measure it. The greatest change to the image of women entrepreneurs came once the federal government started requiring firms to identify gender ownership on tax returns. Hard numbers dismissed the impression that women run only hairdressing salons. Once successive governments saw how critical women’s businesses were, they were never trivialised again.
8) Put senior women at the top table. They are great inspirations and investors. If, as in Norway, 40 per cent of company directors were female, talent would surface and attitudes would change. And there’s evidence to suggest firms would be better run. Follow the Scandinavian example and make maternity payments dependent on dads spending time with their children, too. Women will never have the freedom they need to resurrect the economy if they’re expected to do all the childcare. When both parents have to pull their weight, female employees will be no more of a liability than virile young men. 9) Get rid of Alan Sugar from TV and government. Business leadership isn’t about bullying; it requires imagination, communication, peripheral vision and zeitgeist – the soft skills women use to create hard profits.Margaret Heffernan is a champion of women entrepreneurs. She has run software and media firms and featured in Channel 4 reality TV show, Secret Millionaire.
Read our ten-point manifesto for saving Britain’s future here.