Women entrepreneurs could save the Covid-hit economy

Toni Vicars

By Toni Vicars

August 17, 2020

The Daily Telegraph, 17 August 2020 Katie Lewis

As women bear the brunt of job losses, Katie Lewis explains why we need to support them to start their own businesses.

As the crisis continues, by economic statistics, the fall out of Covid19 is impacting working women more acutely with significant strides backwards in pay and employment equality. According to National Women’s Law Center (NWLC) in April alone, women accounted for 55% of the jobs lost with only a third of those jobs returned in May and June. To give you some perspective according to the U.S. Bureau of Labour Statistics, in the USA alone in April men’s unemployment went up from 3.55 million in February to 11 million while women’s unemployment went up from 2.7 million to 11.5 million over the same period and that pattern is continuing.   

Women experience greater economic and social impacts when crisis strike as they often earn less, hold more insecure jobs and are the majority of single-parent households. To add insult to injury, women most often hold roles in the sectors and industries hardest hit by the Covid-19 crisis. As globally the hospitality, leisure and retail industries are being demolished the International Labour Organization estimates that almost 510 million, or 40% of all employed women, work in the most affected sectors, compared to 36.6% of men.

But the negative stats don’t just stop here; sadly, the discrimination goes deeper. The campaign group Pregnant Then Screwed recently released data showing of those surveyed 46% of working mothers made redundant cited a lack of childcare as the reason.

But we can start to address this Covid-19 inequality.

With the right outskilling programmes and organisations making the transformational approach to provide more pathways during redundancy and layoff schemes we can start to make a positive impact to the lives of these women, their futures and their families. Statistics from GoDaddy and Directline both show that a third of those made redundant want to take the opportunity to start a new business. And interestingly the Global Entrepreneurship Monitor (GEM)’s 2018-2019 Women’s Report showed the intention to start a business within the next three years is approaching parity between men and women. Globally, younger women between the ages of 25 and 44 had the highest entrepreneurial participation rates.

With support, education and guidance, we can see the success rate for entrepreneurs of all kinds from those wishing to start a freelance business to the next major corporate increase from 10% to over 70%. Providing that training as an outskilling pathway within the options for redundancy will become invaluable to those who want to take this opportunity.

Those that decide to create their businesses are in the position to take control over their ability to generate security for themselves by building their sustainable source of revenue, delivering stability for futures and families. The freedom to control their work experience, career path and work environments can have huge impacts on working single mothers. The same Pregnant then Screwed survey showed that “more than half of employed mothers say lack of childcare has had a negative impact on how they are perceived and treated by their employer.” Having responsibility for when and how they work can also give them back control over their daycare needs.

Adding a “startup” pathway to redundancy programmes, we could also start to see another unbalanced statistic positively impacted. If we use this time to begin providing women with the opportunity to start their own business, we could begin to bridge the startup divide.

V.C.s have traditionally invested 98% of their capital in startups led by men and when women-led startups that did raise capital, on average, raised 36 times less money than those founded by men, according to PitchBook Data Inc. But with more women coming out of roles and having access to startup support pathways, we could start to see a new flood of women entrepreneurs. And that is never going to be a bad thing both for those women and for the economy as “women-owned businesses are growing much faster than all businesses. From 2007 to 2018, women-owned businesses grew by 58% in terms of the number of firms and 46% in terms of revenue,” according to American Express research advisor Geri Stengel. 

By empowering women to start their businesses, we might just be empowering a re-start as entrepreneurs are the real engine of any dynamic economy. The GEM study also showed that prior to Covid19 in North America, the total employment by women-owned businesses rose by 8%. In comparison, for all businesses, the increase was lower at 1.8%.

As women feel the impact of Covid-19, if corporates making these decisions to significantly reduce their talent pools can discover the power of startup outskilling we could see a movement of empowerment and economic growth for us all. Given the enormity of the challenge facing the global economy, we must be thinking about how we can empower women entrepreneurs as they will be our future.  


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