The depressing truth about women and business

It was a struggle setting up my own business 20 years ago as a woman, and the truth is, that hasn't changed. But they can.

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It is twenty years since I first set up in business by co-founding the Future Foundation, a new kind of consumer think tank. We aimed to promote greater corporate social responsibility through better research and consumer understanding. Our masterstroke was to create an online database of our trend analyses which grew in attractiveness as the Internet expanded into every space in commerce. The business has grown into a multimillion pound, international global trends agency, with offices in London, New York and Stockholm. We have some 50 employees and over 200 blue chip clients.

It wasn’t easy being a female entrepreneur twenty years ago. I was one of very few female owners in our sector and had no direct role models. At first, the bank refused to lend us money, despite our copper-bottomed business plan, so we had to put our homes on the line and to add insult to injury, they assumed I was married to my business partner – which wasn’t at all the case! I was very clear that I wanted to create an entity that represented my values; had a life of its own; generated a steady income; and contributed to society. As the business grew, we became more commercial and whilst the values didn’t disappear, the greatest satisfaction I have experienced as a business owner has been employing young people and giving them both a positive experience and salary so that they can live their lives. To me this is what real enterprise is about – becoming an engine of growth and employment.

I have been struck by how little things have changed. It is this excruciating pace that spurred me to stand as a candidate for the GLA elections in May, representing the Women’s Equality Party (WE). From the outset, flexible working has been a mantra at Future Foundation and we have always had as many female directors and managers as male. However, elsewhere it is clear that women are still struggling to make their mark both as entrepreneurs and within small businesses (SMEs) nationally. Women are half as likely to be entrepreneurs as men (6.3 per cent compared to 11.6 per cent) and only 19 per cent of SMEs are majority-led by women, with a shocking 49 per cent still led entirely by men. And the dynamic tech start-up sector is making things worse, compounding underlying structural inequalities with the shortage of women graduating in STEM subjects – a recent survey found that only 3 per cent of tech start-ups in Silicon Valley are founded by women and only 6.5 per cent have a female CEO.

Whilst much has been trumpeted about women’s increasing self-employment being at its highest rate for 40 years, it is clear this a very different thing to real enterprise. The kind of self-employed work women do reflects occupational segregation – child minding, teaching, cleaning and retail. It is not a transformative tool and flexibility comes at the price of insecurity and low pay with on average 41 per cent lower rates than their male counterparts.

Growing self-employment is a symptom of women being at the raw end of recent economic turbulence, austerity and failures of the workplace to provide more flexible arrangements and support for carers.

The question is, what is to be done? One of the biggest personal challenges I have faced in coming into politics from business is identifying workable and affordable policies that will make a difference. There is a lot of rhetoric about ‘empowering’ women, but we have to address the structural inequalities that are driving women into lower quality self-employment. This means we need equal pay (not too much to ask 45 years after the Equal Pay Act?), universal childcare, equal parenting leave, flexible working and mandatory representation of women in management and on boards. All of these are WE policies. All of them will work to make women’s employment of all kinds more rewarding and more compatible with caring responsibilities.

In addition, we need a UK-wide enterprise support structure in that encourages women with the best credentials into real entrepreneurship in the high-value added sectors. This would provide access to start-up funding, necessary development and support from established entrepreneurs, accountants and lawyers along with ready access to childcare. The key is to provide streamlined and supportive entry routes rather than leaving each would-be entrepreneur to struggle on her own.  

If women were to set up enterprises at the same rate as men, there would be an additional million entrepreneurs all creating jobs and contributing to the economy. That is a prize worth going for and one that will benefit us all. Let’s not have another twenty years of glacial change – let’s be bold and go for it now.

 

Melanie Howard is co-founder and Chair of the Future Foundation, a Visiting Business Fellow at InnovationRCA, Royal College of Art and a Women’s Equality Party Candidate for the Greater London Assembly elections in May 2016.