Women in business: how the UK measures up
It’s a widely accepted fact that women still lag behind men when it comes to taking on leading roles in business around the world, but how does their position in the UK compare to that in other countries? Is the UK leading the way or are there things that other countries are doing better? Understanding the global picture helps us to spot where UK government and industry initiatives are helping to set the pace and identify where more are needed to make sure that we don’t get left behind.
Female business owners
The UK is struggling when it comes to encouraging women to start their own businesses, with only 6% doing so at present, compared with 10% in the US and 15% in Canada. This seems to be changing however, with around a third of all new businesses launched in the UK in 2018 being run by women. in total, around 1.5 million UK women are self employed, out of a total 163 million women around the world, but it’s worth noting that, for women, starting a business is more likely to be the product of necessity than a proactive choice. Female owned businesses have a higher failure rate than male owned ones, frequently because their owners have to prioritise other commitments and perhaps also because they struggle to attract the same level of financial backing, but many women who face failure go on to try again and do launch successful businesses.
Women in the boardroom
Of course, founding a company isn’t the only way to get to the top. Some 29% of board positions in FTSE 100 companies are now held by women, including 20% of chairs. Successive governments have pushed to support this, unfortunately, however, the rate of progress has recently slowed (it actually fell in 2018). There does seem to be a perception among many men in business that with numbers having risen to this level, no further effort is needed and the imbalance will gradually disappear by itself. There is, alas, no evidence to support that contention. In the US, where government efforts to encourage diversity have been stronger, women make up a further 5% to 10% of board members but, again, progress seems to be grinding to a halt.
The wider context
In order to get a clearer understanding of what’s happening at the top level, we need to understand what the world of work looks like for women more widely. Forty years ago, relatively few women in the UK were in any kind of formal employment, but they now make up 47% of its working population. This percentage is roughly the same in most developed countries but falls below that in some fast-growing African economies and post-Soviet economies, where it corresponds more precisely with the proportion of women in the population. Women are least likely to be in paid employment in majority Muslim countries and countries which still rely heavily on their unpaid agricultural labour.
Women in the UK compare particularly well to men in educational terms, doing better at school and at university, but are notably thin on the ground in some areas, such as tech, where they fall below the worldwide average of 20% – hence the way figures like Lady Barbara Judge have been stressing the need for cultural change and a can-do attitude to subjects like maths and science.
Perception and reality
Both in the UK and worldwide, research tells us that women’s participation in business is undervalued. Investors who fund female-owned businesses actually enjoy better returns than those putting their money into male-owned ones, yet women still have a harder time finding funding. Companies whose boards have a better gender balance are more profitable, yet women have to fight harder for promotion. And because women’s average earnings increase by more than men’s when they become self-employed, they represent a better immediate investment for that state – something which the US government has recognised but which the UK government is still failing to take full advantage of.
In addition to this, women have a harder time believing in themselves. That starts early in life and seems to be worse in the presence of men – there is a notable drop in girls’ scores in maths tests, for instance, when they take those tests as part of mixed gender groups. The key to helping women advance in the long term is to invest in girls, with countries which do so rapidly seeing economic gains. As more and more countries discover this, the UK is going to have to work harder to keep up.