A new report claims that closing the huge investment gap in women-led ventures will drive the UK’s tech growth. The report, ‘Women-Led High-Growth Enterprise Taskforce,’ highlights that backing women-led ventures would add £250 billion to the UK economy if women started and scaled businesses to the same extent as men. But it emphasises a distressing gap that will hinder this achievement, showing only 18% of high growth enterprises with founding teams include at least one or more women in the founding team.
As the UK government gears up to meet its ambitions to become a science and technology superpower by 2030, the Taskforce claims that bridging this gap will generate more investment for the UK economy, significantly contributing to achieving this goal while improving diversity in senior leadership.
Access to funding was highlighted by the report as a ‘persisting barrier’ for women, causing the divide. Anne Boden, founder of Starling Bank and chair of the Women-Led High-Growth Enterprise Taskforce said: “We are effectively starting this race with one hand tied behind our backs.” Boden added that the UK’s goal should be to place women “front and centre of the tech superpower aspiration” to close the gap.
Increasing funding to close the gender gap
The report identifies key areas to improve more diverse representation in ventures that will help to contribute the UK’s tech growth to drive up its place in the global competition. The Taskforce presented the collection of data from founding teams while also advocating for diversity and regulatory changes. It also promoted implementing initiatives that will spur greater inspiration and access for women entrepreneurs beyond London.
The Taskforce works with campaigning organisations, entrepreneurs and investors to collect data and identify barriers for women in starting and scaling high-growth enterprises. A high-growth enterprise counts as having an average annualised growth higher than 20% per year over a three-year period. This is either measured by turnover or number of employees, with at least 10 employees in the baseline year, the report defines.
Women-led ventures are critical for improving the UK economy
While several initiatives have been made to increase access and close the gender gap over the past ten years, progress has been slow. The State of Deep Tech report by the Royal Academy of Engineering from December 2023 highlighted that just 7.5% of deep tech businesses were founded by all-women teams. The Taskforce report also found that in 2022, of the UK’s multibillion-pound venture capital funding, women entrepreneurs frequently received less than 2% each year. “For every £1 of equity investment in the UK, just 2p goes to fully female-founded businesses, representing no improvement in the past decade,” said the report.
The Taskforce report emphasises the critical role that venture capital has to play in bridging the gap for opportunities for women to contribute to the UK’s economic growth, emphasising the need for intentional collective action to make opportunities and funding more accessible with diversity in mind.
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“Unless we urgently move to address this lack of diversity at the decision-making level we will struggle to deliver on the huge potential of VC and technology to drive wealth creation, economic growth and development for the UK,” said Check Warner: CEO and Co-Founder of Ada Ventures and Diversity VC, and Taskforce member.
