Enterprise and skills review phase two report: supporting papers

Paper by Women's Enterprise Scotland (Wes) for the Enterprise and Business Support Project

"The moral case for greater gender equity is clear, and so is the economic case. As countries around the world seek to grow their economies and reduce inequality, tapping into the huge potential of women can be a game changer."
Christine Lagarde, IMF, International Women's Day, March 2017

Changing the Game: The Leaky Gender Pipeline Women Specific Business Support Interventions

Introduction

The four key pillars of the Scottish Government's economic growth strategy are Investment, Innovation, Internationalisation and Inclusive Growth. In this paper, whilst we will touch on all these pillars, our focus is on achieving overall economic growth for Scotland with regard to gender, presenting proposals for consideration to ensure that:

Every woman in Scotland, no matter where she lives, no matter her background, socio-economic status, age or ethnicity, will be able to start up and grow a business, supported by the highest quality gender-aware business support.

This goal does not necessitate a radical change in policy and procedure. It simply requires an understanding that many female-led businesses have an alternative growth trajectory and face different business challenges. Significant economic gains can be made by aligning business support to the needs of women-led businesses at all stages of the user journey.

A vibrant and inclusive economy requires all shapes and sizes of businesses. Many women want to grow their businesses, many do not, many are unable to. The ecosystem must collaborate to provide the right level and amount of non-judgemental user-centric support - based on what the female user chooses to do with her business - at the right point in time.

Studies continue to show that women led businesses are projecting growth and aspire to scale up ¹. By providing a supportive, encouraging environment much earlier in the business creation process, and maintaining that consistency of gender-aware support throughout the user journey, we will remove many of the barriers hindering growth. In this way we will enable women to start up businesses at the same rate as men, unlocking the trapped economic potential of women in business, and contributing an additional £7.6 billion minimum to the Scottish economy.

In this paper we outline the Strategic Framework on Women's Enterprise in Scotland, Ecosystem Partnerships, the five-step female business owner journey (highlighting gender issues at each stage), and present proposed interventions that will plug the leaks in the existing business support pipeline. Whilst we believe these proposals will have significant positive short-term impact, it must be noted that real change will be achieved only through sustained long term activity until such time as cultures, mindsets and behaviours associated with economic development and business support are truly gender-aware.

Strategic Framework on Women's Enterprise in Scotland

The Strategic Framework on Women's Enterprise in Scotland underpins everything we do to strengthen the Scottish economy through facilitation of women's enterprise. This framework is the first of its kind in Europe and now being adopted globally as a model of best practice ².

The Strategic Framework and Action Plan, currently being refreshed and to be relaunched in summer 2017, delivers economic capability in the key areas of measurement, mentoring and networking, role models, growth and finance, gender-aware support and best practice for women in enterprise. Informed by research studies and feedback from women-led businesses themselves.

Women's Enterprise Scotland ( WES) provides the gender expertise to lead and manage the implementation of this framework, with delivery of the actions through the Ecosystem Partnerships. It is anticipated that framework partners will be held accountable for performance of gender-aware business support to the Strategic Board that will hold Scotland's enterprise and skills agencies to account. This is expected to be in place by September 2017, led by an independent chair and with Ministerial membership.

Collection and analysis of gender-disaggregated data is crucial to both the short and long-term success of the framework implementation. Key measurements for women in enterprise need to be redefined to include less focus on turnover and investment raised, and more consideration given to profitability, sustainability, entrepreneurial mindset, confidence, well-being and societal impact as measures of inclusive growth. This accords with emerging global best practice in national economic measurement ³.

Ecosystem Partnerships

Ecosystem Partnerships include Scottish Enterprise, HIE, Business Gateway, Innovation Centres, Enterprise Hubs, E-Spark, CDS, Chambers of Commerce, Investing Women, Networking Groups (such as ASB and BWS), Associations, private companies e.g. RBS.

Significant cultural change will only be effected through expert collaboration with partners, all working together in the true spirit of partnership towards a common goal.

Women Business Owners' Journey (See Appendix 1)

There are five key stages in the journey of a female business owner:

1. Sit Up (Pre Pre-Start Support)

A vibrant economy requires potential business owners to come forward. While some pre-start support is available via Business Gateway ( BG), many women are holding back. The formal business environment represented by BG can feel intimidating and this, coupled with a lack of knowledge about the business start-up process, can deter women from taking action. Research ⁴ on the experiences of women who have come forward and started up a business in Scotland, points to a structural lack of understanding of the challenges faced by women and a desire for:

"Advisors who aren't using behaviour or language that belittles women seeking support. "

Earlier stage intervention can begin to address this barrier – supportive, encouraging, friendly, helpful, local support - allowing women time and space to think through their ideas and aspirations, build their confidence to believe their business is possible and talk it through with a trusted adviser who does not pre-judge anything nor has a visible need to " tick boxes". At this stage concerns over confidence, ability, work-life balance, childcare, etc. can start to be gently considered and tackled, along with a basic introduction to business skills and supportive networks. Provision of non-judgemental women-specific support is vital at this early stage to optimise the existing business support framework and return on investment.

An example of successful pre pre-start up business support for women is the business creation course run for military wives in Midlothian. At the start of the project participants were only comfortable with speaking their name and 57% said they lacked the confidence to start a business. By the end of the 10 week 1.5 hour workshop course, 100% of participants said they had the confidence to start a business, 100% had identified a clear business idea and 76% had started up a business.

2. Stand Up (Pre Start Support)

With the boost gained from pre pre-start support and equipped with increased confidence and basic business skills, women move onto the second stage of the journey. Undertaking more research, testing and validating their idea, reaching out more and gradually building their own supportive networks and business acumen.

At this stage they benefit from support in navigating the broader ecosystem, thinking about planning the next stage, low-cost/no-cost research, micro-grants, listening to and learning from peers, being encouraged by relevant role models, again all done in a non-judgemental manner which builds mutual trust and confidence.

3. Start Up

At this stage women transition into more traditional mainstream support. Their confidence has grown, backed up by a level of demonstrable business skills, their networks have evolved, they are surrounded by other females setting up businesses, and they feel equipped and excited about forming their own business, ready to undertake more in depth business planning and more action, secure in their new level of skills and support.

It is a crucial transition point – research ⁵ points to the existence of structural discrimination and women believe the current system does not understand their business support needs.

"You know the cliché I am so very tired of "fail fast". Just aaargh ….we do it in a different way. "

The ability to access gender-aware business support is key to success, particularly with evolving their business plan. Having time to think things through, properly assess the risks ahead and being comfortable to ask questions without "feeling stupid" all strengthen confidence. This phase is typically a longer incubation and analysis stage for women. Understanding and catering for the needs of women led businesses at this point will reduce current pipeline leakage and produce more robust, sustainable businesses.

"That one size fits all, I do generally think my contact with advisory services has been incredibly positive and helpful but other parts have been really offensive. "

4. Sustain (Missing Middle)

This "missing middle" is a critical phase for women-led business as the "leaky gender pipeline" problems really become evident at this stage of the user journey – referred to as the "Missing Middle". Women can start up and grow their businesses to say £100k t/o, but after this growth tends to slow. Many women are happy to remain at this stage, and should not be judged for doing so, if that fits their work-life balance and aspirations.

However, many women do wish to grow their businesses, but at this point they can stall, stifled by numerous barriers, including but not limited to, lack of appropriate mentors and role models, lack of capital, a hierarchy of support available, inappropriate attitudes to sustainable growth, sectoral discrimination and emotional issues such as mindset, confidence, imposter syndrome and leadership skills.

Research ⁶ shows that many women feel business support services are not equally open to all, and that if you are not in a particular sector, advisers can be somewhat dismissive.

"We are so lucky in Scotland, we have so many avenues open to us, but it feels like they are not equally open "

"It's about accessing the right services at the right time and having the proper support for your business, and people having the interest. I do feel sometimes when you access services if they are not sufficiently interested in what you're doing, if they think that's not going to be massive… "

At this stage it is essential that consistent and sustained gender-appropriate support is given to women, with a strong focus on leadership skills, helping them to build balanced formal fiduciary boards and being comfortable with the financial and emotional implications of business investment, including raising substantive growth capital. The vast majority of equity investments are still made by men. Women need intensive, tailored, gender-appropriate support in navigating this often aggressive, confrontational and male dominated environment, to release the full economic potential of their businesses and their own business aspirations.

5. Scale Up

As women-led businesses move into the scale-up phase, they may look to internationalise, creating a need for more international support and mentors/advisers with international and growth experience. Women may have cultural issues to overcome in different countries and need gender-aware support in developing and embedding their leadership skills in an international context.

Innovation and internationalisation are critical components for business growth. Access to those areas of business support are a prerequisite to optimise the economic growth potential of women-led businesses. Without a gender-aware and informed business ecosystem, women are 20% less likely than men to win endorsement for their ideas, inhibiting economic growth ^7. Currently mainstream access to internationalisation and innovation support is restricted and a broader access is recommended to produce a greater economic return. Innovation led activity in Scotland is majority male, yet studies show that greater gender diversity helps to unearth novel solutions and powers radical innovation ⁸. Greater innovation access by women will facilitate an economic ripple effect beyond the women in business sector and boost Scotland plc.

It is important to note here that women tend to want to grow their businesses much more sustainably than men: this may mean that their growth trajectory is varied and slower, but it is likely to be more profitable in the longer term ⁹.

Key Elements of Proposed Interventions

Proposed gender-sensitive interventions might include the following (see model in Appendix 1)

1. Digital Portal

A single digital access point, the first point of contact for women thinking about setting up a business, and behind which all Ecosystem Partners line up. Simple, efficient, effective with gender balanced content, female-friendly messaging, images, tone and language. This may be facilitated initially through a woman-friendly access point on proposed main ecosystem portal, complemented by a gender review of existing digital content. However, it may in time require a complementary portal to be developed for female businesses. In either scenario, the access point refers onto the proposed National Business Women's Centre for 1-1 support and relevant signposting.

Rationale: current websites and digital support are transactional in design and can be off-putting to women at an early stage of idea development and confidence. And they tend to start with the need for a business plan.

2. Women's Business Centres: National and Satellites

Providing a national centre of expertise, complemented by satellites in both urban and rural communities across Scotland. Referrals through Digital Portal for an initial one-on-one discussion (in person/video/telephone) with an expert in gender-aware business support. Initial assessment made on type, tone and level of support required, agreed with the user. User ID/Passport agreed. Digital "Buddy" appointed for 6-12 months to help user navigate through the ecosystem and signpost/introduce to relevant gender-trained business support in agencies, etc.

National Women's Business Centre located in central belt. Essential to have a bricks and mortar presence, complementing the digital portal. Providing an enabling, supportive environment and focal point for meetings, training, one-on-one surgeries, drop-in sessions, and digital facilities to provide mainstream gender-aware support to users and agencies and ecosystem organisations throughout Scotland.

Five regional Women's Business Centres in strategic geographical locations, co-located in existing premises such as Innovation Centres, Enterprise Hubs, etc. to leverage existing ecosystem assets. Can be supported by a partnership of Women's Business Centre staff and gender trained staff from agencies. Centres important in aiding development of local community peer to peer networking, mentors and board members.

National Women's Business Centre leads on assessment of initial user requirements, appointing Buddys, gender training of business advisers and appointment/training of local gender business support "Ambassadors".

Rationale: the lack of a focal point for women's enterprise in Scotland has contributed to the slow progress and relatively low numbers of women business owners. A 'bricks and mortar' centre and regional satellites will act as beacons for women across Scotland – in addition to providing expertise and guidance for mainstream ecosystem organisations. The National Women's Business Centre will also provide Scotland with an international centre of excellence which other countries will want to emulate and establish a legacy for future generations.

3. Business Adviser Gender Training

All business advisers to be gender trained to be fit for purpose (aware of specific challenges faced by women led businesses, how best to address and support) and meet a professional gender-aware standard.

Rationale: it is critical to help business advisers better tailor provision of their advice to the end-user in order to overcome issues such as discrimination and gendered stereotyping towards female-led businesses.

4. Ecosystem Partnerships

Buddys signposted/introduced to relevant partners in the ecosystem as outlined previously, including but not limited to Scottish Enterprise, HIE, Business Gateway, Innovation Centres, Enterprise Hubs, E-Spark, CDS, Chambers of Commerce, Investing Women, Networking Groups (such as ASB and BWS) and Associations. Buddys on hand to assist with early stage meetings ensuring women receive gender-aware, needs-based support – maximising motivation, confidence and business potential.

Rationale: in order to fundamentally change the culture and practice of enterprise support in Scotland, current ecosystem partners will need to transform quickly, and genuine partnership working and 'buddying' will help this to be achieved.

5. Strategic Framework on Women's Enterprise in Scotland

It is important to re-emphasise that the proposed interventions above (Digital Portal, Women's Business Centres, Business Adviser Gender Training and Ecosystem Partnerships) are underpinned by the Strategic Framework on Women's Enterprise in Scotland. Women's Enterprise Scotland ( WES) provides the gender-specific expertise but delivery of the actions is through the ecosystem partnerships.

The above proposed structure will support women-led businesses through the five step journey, delivering gender-aware, emotionally intelligent led interventions at every step. Based on the fundamental business principle that it is more cost-efficient to retain and grow existing businesses, rather than constantly replenish due to user attrition, this model will plug the gaps in the leaky gender business support pipeline.

Running your own business, be it a microbusiness or a global growth business, will be a realistic and achievable option for any woman in Scotland. Women-led businesses who do want to scale, will not be left to flounder in the Missing Middle, but enabled to achieve their full economic potential.

Women's Enterprise Scotland
March 2017

References

1. Ministerial Enterprise Review Survey of Women-Owned Businesses in Scotland, WES (2016)
2. Strategic Framework on Women's Enterprise in Scotland, WES (2014)
3. Making our Economy work for Everyone, Inclusive Growth Commission (2017)
4. Ministerial Enterprise Review Survey of Women-Owned Businesses in Scotland, WES (2016)
5. 'Women in Enterprise: The Untapped Potential'. Federation of Small Businesses. (2016)
6. Business Support for Women-led Businesses in Scotland, ( WES) 2017 (unpublished)
7. 'How Diversity Can Drive Innovation' Harvard Business Review (2013)
8. Gender Diversity within R&D Teams, Journal of Innovation, Organisation and Management 2013 (Vol 15)
9. Firms with more women in the C-Suite are more profitable, Harvard Business Review (2016)

Appendix 1

Strengthening the Scottish economy through facilitating women's enterprise