A recent report outlines how entrepreneurship is being harnessed as a key driver in a sustainable, purpose-driven economic recovery.
Yet despite positive trends for women and Black and Racial Minority communities over previous years, recent levels of diversity in entrepreneurial activity have significantly decreased.
The Global Entrepreneurship Monitor (GEM) began carrying out survey-based research on entrepreneurship and its networks around the world in 1999. Never has this ongoing evidence-based research been more relevant than today.
Last year saw a shift in entrepreneurship motivations, with more and more societies reorganising their communities to embrace the benefits of entrepreneurship and recognise and reward its value to society and overall welfare.
The latest GEM report proves how these motivations have continued to shift, with rising levels of entrepreneurs seizing the current COVID-19 social and economic climate as an opportunity to make a lasting difference in the world.
Not only is entrepreneurship being recognised as an income-generating alternative in today’s downturned economy, but entrepreneurs are also more motivated than ever to build purpose-driven companies that have a positive effect on local communities.
Current levels of entrepreneurship may be necessity-driven due to the impact of the Coronavirus Pandemic, yet these activities, directly or indirectly, will eventually generate secure and established businesses, and create productive jobs and employment opportunities for many.
“Individuals that are currently making the decision to start and/or to grow a business are ultimately creating jobs and incomes, adding value to society and strengthening economies. In other words, as much as vaccination is the key to global health recovery, so too is entrepreneurship the key to unlocking worldwide economic recovery” The Global Entrepreneurship Monitor, 2020/21
However, not all trends have improved. The report highlights how previous positive levels of diversity in entrepreneurship are now declining.
Maggie O’Carroll, CEO of The Women’s Organisation said: “Over the course of the COVID-19 pandemic lockdown period The Women’s Organisation supported more than 1,160 businesses to access over £12.5m of business finance and grants.
“Research has proven that women have disproportionately shouldered the lion’s share of additional care duties and home schooling during this period while also being dealt devastating blows such as higher rates of redundancy and furlough, and unfair and restricted access to the Self Employment Income Support Scheme (SEISS) and Universal Credit.
“In order to build back better post-COVID we must ensure the power of diverse entrepreneurship is truly harnessed this will enable businesses to thrive and better serve and support local communities.”
Ahead of the Chancellor’s Spring Budget in March, The Women’s Organisation called for a £1.6bn investment for a national programme of employment and business support to be implemented locally to help more than 2 million women who lost their jobs and businesses during COVID-19, resulting in an £8bn economic return.
The GEM report further highlights the agility of entrepreneurs in the face of COVID-19. This is compared with the lack of responsiveness of governments in formulating and implementing polices to ensure that entrepreneurs are supported to take flight, or established businesses are supported to survive and grow.
While entrepreneurial activity within Central and East Asia, Middle and East African economies was found to be the same, if not higher, amongst women compared to men, Europe, and specifically the UK still lags behind.
The latest findings indicate a 40% gap in entrepreneurial activity between men and women in the UK, reporting on average of 6 female early-stage entrepreneurs to every 10 men at the same stage.
The GEM research found that increasing female participation in entrepreneurship boosts an overall economy, creating thousands of new businesses and adding significantly to employment opportunities and incomes.
Increasing female participation in enterprise creation needs to be a much more important policy objective in the UK to boost national economy and deliver a sustainable economic recovery.
Only 15% of SME employers are women-led, and only five per cent of SMEs have at least 50/50 representation of people from BAME groups on their senior management teams.
Most recent estimations calculate women-led SMEs contribution to be £85 billion to overall economic output, and this can be significantly increased given sufficient policy interventions.
By adopting policies to support women, creating women-focused entrepreneurship initiatives, and creating gender-based policies, female entrepreneurs would contribute significantly to the UK economy, but also create a substantial amount of sustainable employment opportunities across the country.
Professor Mark Hart of The Global Entrepreneurship Monitor, UK team said:
“It is clear from the evidence that the overall impact of the pandemic on women has been disproportionate as they are more likely to carry the additional burdens associated with COVID-19 lockdowns and restrictions. The persistent gap between male and female early-stage entrepreneurial activity rates in the UK is a matter of on-going concern and has been exacerbated during the pandemic in 2020 as the latest GEM results show.
“Much of that may well have been due to the lack of Government support the many hundreds of thousands of self-employed women who provide such an import role in the enterprise economy. As the economy begins to emerge from this unprecedented public health crisis decline there is a need for renewed energy into the work of organisations such as The Women’s Organisation.”
The full GEM Research can be found here.