How the recommendations in Alison Rose’s review of female entrepreneurship can support the UK economy
After becoming the first female CEO of a major British bank, Dame Alison Rose created her influential Review of Female Entrepreneurship (2019). This government-commissioned report mapped strategies to unlock the economic potential that female entrepreneurs UK-wide hold.
The report calculated that a sustained, concerted effort that enables female entrepreneurs to start and scale businesses at the same rate as men could add around £250 billion of value to the British economy. This would be around the same as four years of natural Gross Value Added (GVA) growth.
Although entrepreneurs across the UK set up businesses all the time — approximately one every 75 seconds — only one in three is a woman. In addition, female-led ventures are, on average, 44% of the size of male-led ventures in terms of economic contributions.
Read the Alison Rose Review of Female Entrepreneurship.
Alison Rose on the productivity gap
In the Rose Review, Dame Alison Rose explains that more scaling support for female entrepreneurs could help the UK close its productivity gap with global rivals.
When the UK went into the financial crisis, it had one of the lowest labour productivity levels in Europe. When the country emerged, it had the steepest decline in productivity growth. Although the UK’s productivity has improved over recent years, it’s still nearly 20% below its level had it continued at pre-crisis rates.
Now, two-thirds of UK employees work for companies with below-average productivity. On average, employees in Germany produce 36% more than employees in the UK for every hour they work.
Also, female-owned businesses make up less than one-quarter of ventures in the UK’s five most productive sectors. Of the women-led businesses in these sectors, 81% employ five or fewer people, compared to 73% of male-owned businesses.
To improve productivity, British policymakers and businesses will need to:
- Improve access to information and support in rural and city areas
- Build skills for the future
- Quicken digital transformation
- Strengthen access to business and finance collaborations
- Promote investments and exports
The Rose Review notes that it is critical for initiatives that unleash female entrepreneurs’ economic potential to be woven into these strategies where possible.
The value of diversity
The Rose Review also examines the value that diversity brings to a business — and the economy. Diversity instils creativity and promotes the sharing of information and perspectives that lead to stronger decision-making. Additionally, gender diversity at senior levels correlates with profitability and growth.
The Rose Review refers to a study that demonstrated large companies with at least one female board member outperformed those without by 26% across six years. The study also found that small-cap firms with at least one female board member performed 17% better.
Why women are less likely to start and scale ventures
The Rose Review examines the disparities between women and men in business in great detail. It also peels back the layers of the barriers that block so many women from starting or scaling businesses. These barriers include:
1. Lack of funding
The Rose Review found that female-led businesses receive less funding than male-led businesses at every stage. Women receive 53% less capital than men to start businesses, and all-women teams receive just 1% of venture funding. In general, women are also less aware of funding options and less likely to take on debt.
Aside from accessing the funding itself, even finding information on sources of capital can be complex. This information is often highly technical and fragmented across several platforms. It’s not always easy to understand what funding is available or the benefits this funding offers over alternatives.
As such, women-led startups are more likely to use bank loans and credit cards. These can work out much more expensive than alternative sources of finance, such as angel investors and venture capital.
Many early-stage female entrepreneurs (around 40%) also apply for grants, which average approximately £7,000 per business. Only 1% of these female entrepreneurs secure angel investments. On the other hand, male entrepreneurs are 10% less likely to use grants, and 10% secure angel or other investments averaging at £150,000-£200,000.
Women are also much less likely to use their savings as capital compared to men. While nearly half of male entrepreneurs invest savings into their ventures, this is only the case for one-third of women. This may be because women earn an average of £223,000 less than men during their working lives, which could leave them with fewer savings.
Funding scale-ups
The funding disparities heighten as women scale their businesses. While 21% of male-owned businesses scale to at least £1 million in turnover, this is only true of around 10% of women-owned businesses.
Women are less likely to take on debt, more likely to ask for a smaller fund, and may be so pessimistic about their chances of securing funds that they don’t apply at all. The Rose Review found that women are almost twice as likely than men not to pursue a loan process because they expect to experience issues.
2. Lack of family care
Balancing work with family-related responsibilities is the biggest barrier to success for female entrepreneurs who have children. The Rose Review found that women are double as likely to highlight family care as a barrier to starting a business compared to men.
On average, women spend 60% more time on primary care than men, and entrepreneurialism rates drop sharply for women aged 35+ compared to men of the same age.
What’s more, as our population ages, we can expect caring responsibilities to increase for elderly loved ones as well as children.
While lack of family care is a huge barrier in the UK, the situation is different for female entrepreneurs in countries that better support the balance of work and family. For example, in the Netherlands, women are more likely to express growth ambitions, employ more team members, and be more innovative.
The Rose Review identified that female entrepreneurs are 60% more likely than men to highlight care-related interventions as helpful to them and their businesses. These interventions could include subsidised or accessible childcare or co-working spaces with childcare.
Interestingly, female entrepreneurs who have children rated every potential support option more highly than female entrepreneurs who don’t have children. This was the case even when it came to initiatives that don’t directly relate to care.
The Rose Review concluded that many female entrepreneurs who have children experience several business challenges with indirect links to caring responsibilities. These may include financial pressures and a lack of access to sick pay, training, and networks.
3. Lack of accessible mentors and networks
The Rose Review identified three cultural barriers that make entrepreneurship less accessible for women, finding that women are generally:
- More risk aware, which can make them cautious of starting or scaling a venture. The Rose Review shows that women are 55% more likely than men to express fear as a primary reason not to start a business.
- Less likely to have entrepreneurial contacts or know how to access sponsors, mentors, or professional support networks. While, in general, women value external networks more than men, 26% feel their lack of networks is a barrier to business.
- Less likely to believe in their entrepreneurial skills. The Rose Review found that while 56% of men are confident in their capabilities to start a venture, this is only true of 39% of women.
Overall, these barriers suggest that women tend to perceive a higher bar to entrepreneurship entry than men. The perception aligns with the fact that while women often believe they need to hold 100% of the qualifications listed to apply for a job, men will often apply if they hold 60%.
In an entrepreneurship context, many women believe they need near-perfect professional and technical credentials to even get started. Meanwhile, men are more likely to take risks and learn as they go.
Despite this perception, the Rose Review found that female entrepreneurs who have already launched a business are almost as likely as male entrepreneurs to have senior management experience.
By extension, it’s possible that as fewer women hold senior leadership positions, fewer women launch their own ventures. Those in these positions may have more of a springboard to take the plunge and go self-employed.
Alison Rose’s eight recommendations (as listed in the Rose Review)
Using the Rose Review’s extensive research, Dame Alison proposed eight recommendations that the private sector could implement immediately, especially with support from the public sector. With these steps, the UK has a starting point to close the equality gap between male and female entrepreneurship.
While opportunities 1-3 focus on improving funding for women entrepreneurs, opportunity 4 focuses on improving family care support, and opportunities 5-8 focus on making entrepreneurship more accessible through local support and relatable mentors and networks.
1. Encourage more transparency of funding allocation
The Rose Review suggests the creation of a pledge that commits venture capitalists, angels, and other institutional investors to the principles of gender equality and the transparent reporting of gender funding data.
2. Create investment vehicles that improve funding for women entrepreneurs
The Rose Review encourages banks and investment funds to enable high-net-worth clients and institutional investors to support women-led businesses.
3. Incentivise investors to support women entrepreneurs
The Rose Review asks investors to increase transparency of funding decisions, hire more female investors, and provide improved training to investment teams on the challenges and biases that female entrepreneurs experience.
4. Review and launch banking products for entrepreneurs with family responsibilities
The Rose Review calls on financial institutions to develop products that help parents manage their ventures and the challenges of raising a family. These products should be available to parents of both sexes.
5. Broaden the entrepreneur and expert in residence programme to develop access to expertise
The Rose Review asks private-sector actors and business hubs UK-wide to collaborate on the provision of resources and expertise. These should support government-led information initiatives, especially in rural areas.
6. Increase mentoring and networking opportunities
The Rose Review urges public- and private-sector organisations to share networking best practices, create a centralised platform that connects all networks in one place, and develop the reach of these networks in underserved areas.
7. Develop and implement entrepreneurship courses in schools and colleges
First, the Rose Review encourages more organisations to offer education on entrepreneurship in schools and colleges. Second, it asks private- and public-sector organisations to create a common set of entrepreneurship-focused educational materials.
8. Build an entrepreneur digital first-stop shop
The Rose Review asks private sector actors and public bodies to work together to centralise the huge amount of entrepreneurship information that is currently available but isn’t necessarily accessible.
A starting point for equal entrepreneurship in the UK
Although there is no way to reshape the business world for female entrepreneurs overnight, these recommendations provide a cohesive starting point. With these initiatives in place, the UK can begin to shift its attitudes and behaviours towards women entrepreneurs — and unlock their economic contributions.
As the Rose Review emphasises, some areas in the UK will need additional attention. These are likely to be the areas outside major cities where support structures and levels of female entrepreneurship are particularly low.
Women from minority ethnic groups will also need additional support. These women often experience barriers to female entrepreneurship to a greater extent.
About Alison Rose
Alison Rose made history as the first woman to lead a major UK bank. Her leadership and impactful projects earned her the title of Dame Commander of the Order of the British Empire in 2023, recognising her dedication to supporting vulnerable customers and empowering women in business.
Alison Rose serves as a senior adviser at the private equity firm Charterhouse and an adviser at the law firm Mishcon de Reya. She’s one of the founders of GFANZ, and she’s part of the SMI Council for Climate. Her career continues to influence both the financial sector and the broader business community.