Gender and enterprise: The use of entrepreneurship support organisations by men and women

Abstract

This In Perspective paper reflects on the use by men and women of entrepreneurship support organisations (ESOs). It arose through an inquiry conducted in partnership by London South Bank University and Shared Enterprise, the latter being an ESO based in London. As part of the inquiry, a small number of other ESOs in London were interviewed, who revealed that the majority of their participants were women, although the gender imbalance is not as extreme as is the case with Shared Enterprise. On the other hand, far more enterprises in Britain are led by men than are led by women. According to the Longitudinal Small Business Survey (LSBS), only 20% of very small businesses (no employees) were led by women, and 60% were led solely by a man. A similar proportion – 19% – of small- and medium-sized enterprises (SMEs) with employees was defined as led by women. A combination of interviews with Shared Enterprise participants and a desk review leads to a (tentative) solution to this seemingly puzzling paradox: women who aspire to entrepreneurship use ESOs more than men because they need them more.

Introduction: Enterprise and entrepreneurship support organisations

This In Perspective paper reflects on the use by men and women of entrepreneurship support organisations. It arose through an inquiry conducted in partnership by London South Bank University and Shared Enterprise, the latter being an entrepreneurship support organisation based in London. Shared Enterprise wanted to know why far more women than men use their services, and what, if anything, they should do about it. The inquiry was based on a small number of interviews conducted with Shared Enterprise participants split almost equally between men and women, a small number of interviews with other entrepreneurship support agencies in London, and a desk review of women and small firm leadership. Combined, these sources reveal a somewhat puzzling paradox: there are far more enterprises in Britain led by men than are led by women, yet women seem to use entrepreneurship support organisations far more than men.

Entrepreneurship support organisations (henceforth ESOs) are organisations whose purpose is to support start up and small businesses. They also have been referred to as enterprise support agencies, business support organisations, or enterprise agencies, although this is unlikely to be a complete list. Unlike other organisations that provide services to businesses, like universities, local and national governments, banks, lawyers, or accountants, they exist primarily, or solely, to support businesses. ESOs provide assistance to small businesses through the provision of both tangible and intangible resources, the former consisting of things like finance and premises, the latter of things like advice, mentoring, training, and networking. They provide support across a range of business development stages (pre–start-up, start up, growth), sometimes specialising in one or several. Some have sector specialisms. They attract public funding, in part because it is believed they mitigate barriers to entry for new ventures and speed up the process of bringing innovations to market (Stam and Van de Ven, 2021). They contribute to the desiderata of an ‘entrepreneurial ecosystem’, comprising local, city-wide, or regional networks of entrepreneurs and various support organisations that assist the creation and growth of businesses (Hruskova et al., 2023). The desirability of entrepreneurial ecosystems as a means of supporting productive enterprise has attracted the attention of national and sub-national governments across the world (Mason and Brown, 2014).

Probably the most comprehensive literature review of ESOs is provided by Bergman and McMullen (2022). Addressing what appears to be a burgeoning sub-set of the already massive literature on small businesses and entrepreneurship, Bergman and colleagues sampled research across several disciplines, including management, entrepreneurship, technology, sociology, and urban studies. This initially produced 10,949 items which were screened to produce a final set of 337 journal articles. The review confirms the ubiquity of ESOs worldwide, but the general sense conveyed is that of a less than satisfactory body of literature. Where there is a focus on individuals, there tends to little demonstration of clear outcomes, and where the concern is with ventures, there tends to be few outcomes clearly associated with processes deemed to be important. Research that deals with sponsor organisations focuses on university and corporate-sponsored ESOs and is largely conjectural about outcomes for the sponsor. Overall, it is concluded that the notion of ‘support’ is under-explored, meaning that ways in which the entrepreneur participates in learning to become self-sufficient is relatively overlooked and the agency of entrepreneurs is downplayed. The word gender appears only twice (in the references), for two papers on gender, techno-business, and incubators both in the same journal and apparently written by the same authors.

The next section of this paper deals with women, enterprise, and small firm leadership. If we want to know more about why men use (or do not use) ESOs, it is helpful to know more about women. This is followed by a summary of a small number of interviews with ESOs in London and then by a brief resume of Shared Enterprise, whose practice contrasts with the overlooked aspect of participant agency identified by Bergman et al. Then there is a summary of the experiences of Shared Enterprise participants as related in their interviews. The final section concludes.

Women, enterprise, and small firm leadership

An imprecise proxy for comparing the number of women to men engaged in some form of entrepreneurial activity is provided by the Labour Force Survey (LFS) for the UK. The LFS provides ‘headline’ statistics for various types of labour market status, including employment, self-employment, unemployment, and economic inactivity which are easily available from the NOMIS website hosted by the ONS. These figures simply show the number of people engaged at any point in time in an employee or self-employed job as their main job.

Over the year to March 2023, there were about 2.5 million males aged 16–64 in the UK counted as self-employed compared with about 1.4 million females. As a percentage of the 16–64 population generally, this equates to about 11.9% of men and 6.6% of women. There are slightly more employed men than employed women – with about 13.8 million men and 13.6 million women, but the disproportion (66.6% vs 65.2%) is not nearly as large. One reason for both employed men and self-employed men outnumbering employed and self-employed women could simply be that more women than men are counted as economically inactive – neither looking for work nor in work. In the year to March 2023, there were about 3.7 million males (an unusually high number) classed as economically inactive compared with about 5.3 million females. However, if we subtract the numbers of economically inactive from the denominator (the population aged 16–64) so that we are effectively only dealing with the economically active population, the disproportion between male and female self-employment remains, at 14.5% versus 8.8%.

According to the latest ONS labour market bulletin (ONS, 2023), about 1.4 million women were classed as economically inactive because they were looking after a family/home, about 85% of all economically inactive people classified in this way. The other frequently occurring reasons for economic inactivity – being a student, temporary or long-term illness – were more evenly distributed by gender among the 16–64 population.

As we shall see below, the greater likelihood of women leaving the labour market for reasons of family, or caring, responsibilities is an important part of the explanation for a divergence in entrepreneurial behaviour between men and women. This divergence mirrors gaps between male and female earnings and hours worked following the birth of a first child in the mainstream labour market. The average earnings of men are almost entirely unaffected by parenthood, but maternal earnings take a sharp fall. The post-parenthood gender divergence occurs across all three components of total earnings – participation in the labour market, hours worked, and the hourly wage (Andrew et al., 2021). Further, work interruptions and shorter working hours have long-lasting effects on mothers’ ability to earn. Similarly, work interruptions could affect female entrepreneurship in several ways, perhaps the most important of which is through a weakening of professional networks.

Another source of information for female entrepreneurship in the UK is the Longitudinal Small Business Survey (Department for Business, Energy, and Industrial Strategy, 2022). The Longitudinal Small Business Survey (LSBS) is a telephone survey of UK businesses in the private sector with fewer than 250 employees. The sample is divided between businesses with no employees (‘non-employers’), and small businesses with employees. The definition of ‘size’ is entirely determined by the number of employees in the business (as opposed to, say, turnover, or assets), with micro businesses defined as having 1–9 employees, small businesses as having 10–49 employees, and medium-sized businesses as having 50–249 employees.

In the 2021 LSBS, only 20% of very small businesses (no employees) were led by women. An additional 13% were classified as led equally by a man or a woman, but 60% were led solely by a man. The proportions of business led solely by a woman vary dramatically by industrial sector (as defined by 1-digit SIC), ranging from 58% and 56% in health and social care and accommodation and food, respectively, to 4% and 8% in construction and transport and storage. A similar proportion – 19% – of small- and medium-sized enterprises (SMEs) with employees were defined as women led (meaning more than 50% of owners, directors, or partners were women). For SMEs, the industry distribution is slightly more evenly spread, although the pattern is similar. The proportion of women-led SMEs ranges from 44% in education to 37% in health and care, to 9% in construction. The tendency of female-led enterprises to cluster in particular industries might be one reason female entrepreneurs find it harder than male entrepreneurs to access finance (see below). For example, only 12% of SMEs in the information and communications sector, which might be expected to be attractive to venture capital, were female led.

Female entrepreneurship has emerged as a rapidly growing field of study over the past two decades, becoming yet another thriving sub-set of the literature on small businesses and entrepreneurship. There is currently at least one specialised journal (International Journal of Gender and Entrepreneurship, which began in 2009), and, as with ESOs, there is an occasional review paper that surveys the current state of play. One such (Cardella et al., 2020) identifies six clustered themes in this sub-set, of which the two most important concern the role of families as a source of financial, moral, and psychological support for women who have to reconcile family responsibilities with the demands of a business, and barriers to female entrepreneurship. Another is Surangi (2020), which also identified themes relating to the barriers to female entrepreneurship, in addition to others such as the specific characteristics of female-led enterprises.

In the UK, the far lower propensity among females to start or run a business has attracted government interest, one product of which was the Rose Review (HM Treasury, 2019), which receives special attention here because of its currency in the UK context and its thoroughness. The findings are based on two surveys of over 5000 respondents in the UK, one of around 1600 male and female entrepreneurs, and another of about 3500 men and women in the general population, 200 in-depth interviews with business leaders, investors, support bodies, and academics, and a general literature review. The review shows that women in the UK are less likely than men to embark on the various stages of what is described as the ‘entrepreneurial journey’ (intention, start-up, sustain, and scale). A number of barriers to female entrepreneurship were identified.

First, access to and awareness of funding was an issue for both female entrepreneurs across the entire entrepreneurial journey and women non-entrepreneurs. In the surveys conducted for the review, women were nearly twice as likely as men to mention lack of knowledge about funding as a major barrier to starting a business, whilst 31% of female entrepreneurs said securing funding was a major barrier to further business success compared with 21% of men. Drawing from a report produced jointly by the British Business Bank, Diversity VC, and the British Venture Capital Association, it is claimed that only 1% of all venture funding value goes to businesses founded by all-female teams, inhibiting scale up (British Business Bank, Diversity VC and BVCA, 2019).

Second, family care responsibilities disproportionately affect female entrepreneurs throughout the entrepreneurial journey. In the surveys, women are twice as likely as men to mention family responsibilities as a barrier to starting a business, and for female entrepreneurs with children, primary care responsibilities are the most important barrier to further business success. Female entrepreneurs or would-be entrepreneurs may also be caring for adult family members with special needs, or ageing parents and relatives. There is some ambivalence in this, given that the potential for flexibility around family care is an important ‘pull factor’ to starting a business for women with care responsibilities.

Third, there are what are described as three separate but reinforcing cultural barriers affecting women at all stages of the entrepreneurial journey. It is claimed that women typically have higher risk-awareness than men and are more cautious about starting or scaling a business. In the survey, women were 55% more likely than men to cite fear of doing it alone as a primary reason for not starting a business. In addition, women are less likely to believe they possess entrepreneurial skills: only 39% of women were confident in their capabilities to start a business compared to 55% of men. It is claimed that this is a perceived gap in ability, rather than an actual gap in skill sets.

For women who had already started a business, a third barrier emerged as important, which was limited professional networks. Women value networks more than men, but according to sources drawn on for the review (Klyver and Hindle, 2017), more men than women know an entrepreneur personally.

The view from enterprise support

The primary purpose of interviewing a small number of ESOs in London was to compare and contrast their experiences and views of the gender balance in enterprise support with that of Shared Enterprise. They also serve, however, to shed more light on the diverse range of provision in this comparatively niche activity.

All but one of the organisations interviewed has a local focus, with attention given to areas of relative deprivation. Two had been established for 40 years, with a relative newcomer, which has a national focus, established in 2016. Funding is described as a ‘melting pot’ of various sources, but the Government's Shared Prosperity Fund, supposedly a replacement for the the EU’s Structural Funds after Brexit, was mentioned several times. Other sources included S.106 payments routed through a local authority, local government discretionary funding, and benevolent funds (for soft loans). One had succeeded in self-generating most of their income, derived from office rents, hiring meeting rooms, and co-working spaces. The relative newcomer had created a national digital platform with about 130,000 registered users made possible in part due to its partnership with Master Card, and had also secured support from other parts of the private sector, in addition to the public sector, including central government, universities, colleges, and local authorities.

Popular services include one-to-one mentoring and advice, training, incubators, workshops, and networking events. Signposting and matching services are available, often to fee-based providers. Delivery had settled into a hybrid mixture of face-to-face and online since the Covid pandemic, although the ESO with a national reach had delivered a large part of its offering online since 2017. Some offered bespoke sector-based services, an example being the jewellery quarter in Hatton Garden. Much of the effort was focused on pre–start-up and start up, although there is support for established businesses (sometimes as tenants) and one had developed an exporting service for established businesses. The opportunity for participants to network, either as an explicit service (for example, bespoke networking events) or as a by-product of other services (for example, co-working services), was said to be among the most popular part of the offering among all ESOs.

All ESOs said the majority of their participants were women, with the proportion ranging from 60 to 70%. None could give a satisfactory explanation for this, with some admitting that they had never really thought about it. It was pointed out that some funding sources nudge ESOs into ensuring that a sufficient proportion of their participants are female, along with other groups such as over-55 s and BAME, but also that there had never been any difficulty in meeting targets. Networking activities appear to particularly favour, and be favoured by, women – the ESO with a national reach allows users on its platform to create or join distinct online networks which can have a sectoral or regional focus, but one of the most popular peer group networks, Women in Business, has 1500 members.

Shared enterprise

Shared Enterprise is a social enterprise and Community Interest Company Limited by Guarantee, founded in 2016. Its mission is to empower people facing additional challenges to realise their enterprise ambitions. Its primary mode of delivery is in Enterprise Clubs, which are essentially facilitated events run on a regular basis. There are currently three clubs operating in London in what are considered to be deprived neighbourhoods in the London Boroughs of Kingston, Barnet and Hackney. Some are in residential settings, such as a supported accommodation unit in the London Borough of Newham, HM Prison Huntercombe and HM Prison Whatton in Nottingham. An additional club will open shortly in Brent Cross. The model appears to be transferable, and a club is run under licence by a different organisation in HM Prison Wymott. About 530 people from local settings have passed through the clubs, in addition to around 180 prisoners. About 140 businesses have been started by club participants. Prisoners aside, the largest proportion of participants are women (around 80%) and from an ethnic minority.

Shared Enterprise employs three part time staff. Clubs are usually facilitated by alumni, with the element of peer support and guidance being a distinguishing characteristic. By far the most successful events are those that involve people who have been members of a club before sharing their enterprise journeys. The clubs give people the ‘basics’ of running a business (marketing, finance, costing, pricing, and so on), but participation does not lead to formal qualifications which is thought to be unattractive to the sort of participants Shared Enterprise wishes to encourage. There is a certificate of achievement if participants complete a programme, but they do not have to.

A Workbook (Start Your Business on a Shoestring) is available, and shorter workshops have recently been developed with partner organisations, including with Mind, the mental health charity, and Refugee Action Kingston. Nonetheless, the main effort is put into to developing interactive, activity-based events, sometimes supported by resources which have been co-developed with club members, such as board and team games. The aim is to develop sustainable, long-term networks in which people ‘inspire each other’ and are encouraged to embark on a process of ‘self discovery’. In attempting non-traditional pedagogic methods, club members are encouraged to identify problems of relevance to them, and solve them through discussion, hands-on activities, and guidance. There is a conscious departure from mainstream enterprise support activities which are thought to often require a pre-formed business idea and a certain level of educational attainment, and are associated with performance metrics and measurable outcomes as a condition of funding. Funding sources for Shared Enterprise are diverse, and include property developers, the National Lottery, and local colleges, but no government funding.

Interviews with shared enterprise club members

Of the members interviewed, 10 were women and 11 were men. Over three quarters (76%) were of an ethnic origin other than white British. All were classed as ‘alumni’, that is, they had some experience of enterprise clubs, some quite lengthy.

There is a huge range of professional, personal, and educational backgrounds. About half have degrees with two at masters’ level. Over a third arrived as immigrants, including from Somalia, Hong Kong, Romania, Greece, and Jamaica. Many are of immigrant descent. Previous working lives had been interrupted by redundancy, illness, and childbirth, although one was still a student.

Previous professional activities included construction, accountancy, marketing and public relations, building surveying, professional dancing (Zumba coaching), costume design for the film industry, fashion photography, community development, childcare and youth work, bid writing, importing, a disability sports website, bespoke pottery, public health, and catering. There was a strong interest in voluntary work.

Participants were asked whether self-employment (or running a business) was more preferable to them than conventional employment. Well over half (57%) said self-employment was preferable, but a fairly large proportion (33%) said they had no preference. For these 30% or so, self-employment was seen as an additional option – a means of ‘hedging bets’:

“Not any better just wiser, shouldn’t keep eggs in one basket, the entrepreneurial model works better.” [A08]

“Maybe both so that I can continue my business even if I have to retire from the job.” [A18]

There is a some difference by gender in people preferring self-employment to employment, with 64% of men seeing it as a preferable option compared to 50% of women. Across both genders, ‘push’ and pull’ factors into self-employment are evident, as is an awareness of a trade-off between security and autonomy, with the latter including an opportunity for personal fulfilment in an activity seen as intrinsically rewarding. One female respondent said:

“Being employed gives me security and I couldn’t survive without it, dancing supplements this. [It} is more rewarding but I can’t survive on it at the moment. But being able to turn this into a business is so uplifting.” [A14].

There is also some gender difference between men and women in the reasons given for their preferences. Men are slightly more likely than women to stress the ‘pull’ factor of autonomy, although the desire for autonomy is present in both genders. As one male respondent said:

“Self-employment is better, no bosses. [You] work better when working for yourself. [I] Don’t like corporate structures.” [A03].

Two women said that self-employment gives them the flexibility to combine working with caring. This element was not mentioned once by men:

“Yes, I’m a single mum so it gives me more flexibility, can work around my child. The flexibility is important.” [A04].

“Strengths: set own hours, make choices of what jobs [I do], work around caring for my dad. Weaknesses: miss working in a team, security- [I] worry about being paid in own business but not when employed.” [A09].

In the last of these, there is a similar ambivalence to that found in the Rose Review; self-employment is simultaneously attractive as a means of combining caring with working because of the flexibility it offers and unattractive because of the daunting time demands of running a business whilst raising children or caring for others. It is worth noting that being able to work flexibly does not mean more spare time. As one female respondent said:

“I prefer employment for security, work- life balance, less responsibility. Work doesn't stop when the business is your own.” [A01].

‘Push’ factors were present in both genders. These arise in the main from perceived or real discrimination in employment for reasons of ethnicity, disability, and immigration status:

“The level of discrimination against neurodiverse people and people seen as ‘other’ in the workplace is very high. I also struggle with workplace politics and I am much more productive as self employed” [A13].

“For me it’s best because of my health issues and disabilities”. [A12].

“Running my own business means doing what you want to do. Equality is not applied in most employed working environments I’ve experienced.” [A11].

“Yes partly because the limited other options available to me whilst I try to get UK citizenship, which I have been trying to get for many years.” [A17].

“Here [in the UK] it is hard to find a job so maybe it has given me a chance to find something new which is good but is also a challenge with so many things to work out when starting a business.” [A19].

The vast majority – 71% – had run or had attempted to run a business in the past, or were currently running a business. The proportions vary dramatically between men and women, with 81% of men saying they had run, or were running, a business compared with 60% of women. The profile of earlier or existing businesses corresponds closely with prior professional experience, and includes businesses in construction, fund raising and bid writing, Zumba training, photography, female fitness training, an import business, and running food shops for refugees. Some of these were businesses in other countries, including Greece and Hong Kong. Ideas for starting a business included setting up a youth club and consulting on youth work, a CIC for raising awareness on damp, a mobile barber shop, and a carry-over from a previous business in Hong Kong as a digital content creator and author.

When those who had run a business before were asked whether they received any support or help in running their business, a minority – 40% – said they had. A slightly higher proportion of women than men said that they had received some help with the earlier business, with 50% compared to 33%, but the actual numbers here are very small. However, the responses were in many cases unclear, and it would appear that the source of ‘support’ or ‘advice’ asked about was construed as a formally constituted support agency. When those who had received some support were asked about the source, four mentioned what could be described as ‘formal’ means of support (although not strictly speaking an ESO), which included a university course, the Greater London Authority, Jobcentre Plus (which, given the history involved, probably meant the Employment Service), and the New Enterprise Allowance programme, but three also mentioned informal help from friends or colleagues in an industry:

“No formal support or training, didn’t ask for it, didn’t know who to ask but knew other builders who run their own businesses so got advice from them.” [A08].

When those who said they didn’t receive any help with the earlier business were asked why, a majority said they were able to find help informally through their contacts:

“[I] Had a construction company in Greece. It employed approximately 30 people. Didn’t have any formal support but family members had businesses so learnt from them.” [A02].

[I am a] sole trader writing bids for ESF projects for clients. I Learnt some of the skills at university and didn’t get any other support…. learned more about bid writing from a former employer” [A03].

“No formal support or training. Didn’t ask for any. I know people who run their own businesses who have given advice.” [A05].

“When I first had my idea I did try and get support from the visual impairment programme, but they didn’t get back to me. I don’t know anyone here who runs their own business, but I do in Jamaica.” [A10].

“ No - mainly because I was already working with established professionals in the fashion industry e.g magazine editors and I did not see the need for it at the time” [A17].

One respondent [female] said they had learned about running a business before arriving in the UK, in Hong Kong. Another [male] had combined attempting formal means of support with building up informal contacts:

“No. I went to Access to Work (an employment programme for people with disabilities) for a few sessions but did not get much support. I have tried other places too. I have managed to build up a handful of people that I stay in touch with for support, including you at Shared Enterprise” [A13].

Of the eight people who admitted to some sort of ‘informal’ support in their previous business life, five were male, probably because the question was only asked to those who had ran a business previously or were currently doing so, the majority of whom were male. It should also be borne in mind that the question about support referred to an earlier business, whereas some respondents were seeking help in starting a new kind of business. Only one respondent – a female – explicitly made reference to not knowing anyone who ran their own business:

“I am a sole trader- female fitness and dance classes. Didn’t have any formal support. Didn’t look for any but wouldn’t have known where to look anyway. Didn’t know anyone that ran their own business.” [A04].

Participants were asked why they thought more women than men come forward to use Shared Enterprise Clubs. Much of the responses were framed around various notions of gender particularities. Interestingly, negative stereotypes were entirely directed at men, often by men, some of it elaborations on the by now popular notion of ‘toxic masculinity’, for example, in the view that men are reluctant to ask for help. There was some acknowledgement, however, that women are more likely than men to experience career breaks, with a concomitant loss of professional networks and contacts.

Conclusion

The contrasting experiences of men and women in the participant interviews provide some evidence to support an explanation for the reason why fewer men than women use ESOs and Shared Enterprise in particular. Put simply, women need them more. ESOs provide surrogate networks for women. In our, admittedly small, sample, more men than women had run a business before, and they, in their earlier business experience, have access to informal sources of information and advice, sometimes derived from industry contacts, either in the UK or in a country of origin.

Curiously, men were more positive than women about the benefits of self-employment which could raise a question about why more women than men use Shared Enterprise’s services. However, the scepticism towards self-employment expressed by women is consistent with the observations raised in the Rose Review about women’s greater risk-awareness and lower confidence in their entrepreneurial skills relative to men, whilst the greater use of Shared Enterprise by women supports the conclusion that women have greater need of ESOs. ‘Push’ factors, arising mainly from difficulties in mainstream employment, were present for both men and women in the decision to explore self-employment, but this suggests an additional layer of vulnerability for women. If we add greater caring responsibilities for women into the mix, we have a good case for more support in the wider policy context for women not only in entrepreneurship but also mainstream employment, for example, in better publicly funded childcare.

Why, then, worry about men? If we fall back on gender stereotypes briefly, if only in the spirit of hypothesising, perhaps it is the case that men are deluded in thinking that they don't need formal support. According to the ONS, the 5-year survival rate for businesses born in 2016 was only 38.4% (ONS, 2022). Admittedly, these data need to be unpicked a bit more, but given that it is likely that many of these failed businesses were male led, perhaps, as seemed to be the perception of many of those interviewed at Shared Enterprise, men are more likely to take risks without fully thinking through the consequences. If the consequence is more business failures for businesses started by men than by women with attendant problems like debt and bankruptcy, perhaps this is an issue that warrants further exploration. Perhaps ESOs should worry about men more and think of ways of engaging them.