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Women launched twice the number of companies in 2022 than they did four years earlier, according to a new report led by NatWest Group’s chief executive Alison Rose.
Women created over 150,000 new businesses in the UK last year, highlighting a rise in female entrepreneurship in recent years, a report has found.
Women launched just over 151,600 companies in 2022, an increase of over 6000 since 2021 and more than twice the number in 2018, according to the Rose Review, an independent review led by NatWest Group’s chief executive Alison Rose.
The annual report found a particularly striking rise in young female entrepreneurs, albeit from a low base. Women aged 16-25 founded just under 17,500 businesses last year, over 20 times higher than the level in 2018.
But the report also found that female entrepreneurs continued to find access to funding harder than their male counterparts, adding that this was particularly troubling given the UK’s poor economic outlook for this year. Previous Rose Review reports have also pointed out that far higher levels of women cite caring responsibilities as a barrier to starting a business.
The Rose Review dates back to 2019, when the government commissioned Rose to lead an independent review of female entrepreneurship. Her inaugural report noted that £250bn could be added to the economy if women matched men in starting and scaling up businesses. The project has since sought both to track data on women launching businesses and also to support female entrepreneurs.
“It’s a testament to the resilience and entrepreneurialism of female founders that they are creating more companies than ever before, and the Rose Review is expanding its support for their work,” Rose said in a statement.
For women starting and scaling up businesses, access to funding and investment remained a challenge. In 2022, over half of female business leaders and entrepreneurs reported finding this hard over the past 12 months, compared to just over 40% of their male equivalents, according to YouGov research commissioned by the Rose Review.
All UK businesses will face a relatively tough environment for finding funding this year, due to a slowing economy and rising interest rates. The report thus voices a concern that: “The downturn is likely to hit female entrepreneurs the hardest, given they already ask for and receive less funding than their male counterparts.”
The report points to the Investing in Women Code, which is overseen by the Treasury and aimed at financial services institutions such as banks and venture capital firms, as one solution. Around 190 institutions have now signed up to the code, to mark their formal commitment to boosting female entrepreneurs’ access to finance. Another often-cited solution is to boost the numbers of women making investments – women are under-represented in venture capital firms and amongst angel investors, individuals who invest their own money in small businesses.
Previous Rose Review reports have also highlighted how caring responsibilities – both childcare and caring for older relatives – disproportionately impact female entrepreneurs. Its inaugural 2019 report found that women were twice as likely as men to mention family responsibilities as a barrier to starting a business, and rates of entrepreneurialism fell sharply for women after the age of 35 compared to men.
This year’s report pointed to an ongoing need for solutions that lead to men and women sharing caring responsibilities more evenly. They cited Aviva as one of a growing number of employers that offer both mothers and fathers several months of paid parental leave, rather than the statutory system of 39 weeks for maternity leave and just two weeks for paternity leave.
The Rose Review and its partners run a range of measures to support female entrepreneurs, including mentorship, education and networking programmes. It also works directly with venture capital firms on how to drive investment in women’s businesses.