Female-led companies generate (on average) 58% less turnover than male-led companies, finds The Gender Index
The Gender Index, an online interactive tracking tool of 4.4 million active UK companies, has launched providing the first ever in-depth, freely available picture into the state of female-owned companies across the UK.
Powered by AI data provider mnAI, the Gender Index showed that while there are more females starting companies than ever before – with 145,200 new companies last year – nationally active female-led companies make up only 16.8% of all UK companies – three and a half times smaller than the 2.7 million male-led companies.
However, the starkest findings, concerning policymakers, is that female-led companies disproportionately generate less investment, compared to male-owned companies.
Of the 1.3 million UK investments that were identified, 66.1% went to male-led firms whereas female-led companies obtained nearly six times less investments (11.9%) than male-led companies. Of the remaining 22%, 17.3% went to mixed led firms where there was an even number of male and female founders. The remaining 4.7% was to companies where no gender information was available.
Moreover, the disparity in the rate of growth of companies run by males and females is laid bare by figures showing that even female-owned companies hitting seven-figure turnover still lag significantly behind that of their male counterparts. The average turnover of female-owned companies is £1.3m, compared to £3.1m for male-owned companies.
Jill Pay, chairman of The Gender Index said: “Mapping the impact that female-founded companies have on the UK economy, uncovering their potential and supporting their growth, is paramount to a more inclusive, diverse and stronger economy, yet until now, the ability to do so has remained stubbornly out of reach.
“We now have the ability to map every company in every country, region, LEP and local authority across the UK, by sector, in real-time. By making this information public, our ambition is to ensure that greater support is provided to female founded companies, helping to accelerate and stimulate fiscal and corporate growth.”
When we look at the regional picture, there are some encouraging signs which the rest of the UK might be able to learn from. The East Midlands recorded the highest- average three-year turnover at 71%, comprehensively beating the UK average of 51%. The devolved nations of Scotland and Wales have the highest percentage of high growth female-led companies at 12%, compared to 8.5% in the rest of the UK.
John Cushing, CEO of mnAI said: “The creation of The Gender Index marks a significant milestone in the support provided to female business owners, and we’re delighted to collaborate on this truly historic initiative.
“Its ultimate mission is to help create a more equal future by providing a clear and accurate picture of what’s going on across the UK business landscape. Revealing the disparity between male and female led businesses, highlighting the challenges, and identifying the opportunities.”
Building networks to help give women the best chance to succeed is something that Lynne Parker knows very well in her role as founder and CEO of Funny Women, a leading non-for-profit company that empowers women to do business with humour.
Lynne said: “We are all being urged to ‘break the bias’ this year for International Women’s Day and information and data is really important to back up why these biases still exist. Not just bias in respect of gender, culture, race and ability – also age and class which are often forgotten.”
To find out more about The Gender Index click here.
