Pathways: A new approach for women in entrepreneurship

10. Consolidated recommendations

This section gathers all of the recommendations discussed in prior sections into one numbered list for ease of reference and future implementation. The illustration below places the various recommendations within the context of a typical start-up founder's journey through the ecosystem.

Recommendations in the list below are also grouped into the following domain categories, according to their shared areas of focus:

1. Physical and Social Entrepreneurial Infrastructure

2. Entrepreneurial Access Pathways

3. Investment

4. Education and Society

Physical and Social Entrepreneurial Infrastructure

Rec. 1.

Pre-Scalers should be extended to support a Pop-up variant, optimized to Primary-Carer needs, in addition to the fixed-site model. As part of this, Pre-Scalers should be renamed to Pre-Start centres.

To address the geographical and time constraints acting upon entrepreneurs in primary carer and home manager roles, we recommend that the Pre-Scaler network concept as defined in Scotland's National Strategy for Economic Transformation^[99] be extended as follows: Pre-Scalers should also operate as a Pop-Up model, travelling to the places near to where people in primary carer roles are most often located. Such a model maximises target audience reach, cost-effectiveness and the use of scarce mentoring resources. It increases access for women and other under-represented groups.

Pop-up locations must be where primary carers already are, for example, utilising empty retail spaces in shopping centres, libraries, schools, colleges and similar

We also note that the term Pre-Scaler is not properly descriptive of the types of early-stage businesses that would likely use them. Certainly, some of the companies that are supported in their early stages in this environment will go on to significant scale. But many others, though collectively very important to the nation's economy, will not - and should attempt to - grow to significant scale. Indeed, for that reason, the term Pre-Scaler may dissuade many early-stage founders from approaching the service at the outset. Therefore, we propose to change the name Pre-scaler to Pre-Start centres (or, Pre-starts, for short). The Pop-up variant, which is the main focus of this discussion, will therefore be referred to as Pop-ups Pre-Start (or PUPS). And, when we refer to Pre-start centres and Pop-up Pre-starts collectively, we'll use the term Pre-starts network.

PUPS, like fixed-location Pre-start centres provide start-up incubation, access to founder education resources, access to business and related services, access to business mentors, access to relevant expertise, including digital marketing and web skills, a peer-learning and community environment and including shared access to resources such as a 3D printing capability. and a peer-learning and community environment

A PUPS would remain at a given location for anything from a few days to a month, depending on demand and other factors, and it would return to that location frequently and predictably.

Rec. 2.

The Pre-starts network (including Pop-up Pre-starts) should operate with two membership levels. Associate Membership level and Full Membership level

Associate Membership automatically applies to all citizens with an interest in starting a business. It enables access to presentations, events, networking days, mentoring sessions etc. and ensures that the tentative, the apprehensive and the curious have a relatively low bar to exploring and developing their entrepreneurial interest and confidence. Full Membership applies to those entrepreneurs whose start-up concept or stage of development is considered by the Pre-starts operator to be promising enough to merit full-entry. Full Membership carries benefits, including access to some Tech-Scaler/Start-up Scaler training programmes. The Full Membership level is re-assessed on an annual basis.

Rec. 3.

The Pre-starts network should provide financial assistance to meet extended childcare costs for entrepreneurs with Full Membership, who are also primary carers, for the period of one year.

To further address the time constraints acting upon entrepreneurs in primary carer and home manager roles, the network should provide up to one full year of financial assistance towards extended childcare costs (i.e., from 3:00pm-6:00pm, weekdays) to Full Members of the Pre-starts network. In order to manage budgets predictably, The Central Operator (see next requirement) of the network awards this assistance by stack-ranking all start-up concepts presented by members through a fair process and allocating grant support according to available budget in any given year.

Rec. 4.

Each Pre-Start centre and Pop-Up Pre-Start should include a Concept Fund, awarding micro-grants to associate members for proof-of-concept development.

The purpose of this fund, which makes micro-grant awards of up to £1000, is to support potential start-up founders to test concepts, and to build confidence and entrepreneurial experience prior to incorporating a company. The Pre-starts network, combined with judicious (including repeated) application of the Concept Fund can help potential entrepreneurs explore ideas without being "above the radar" (compared to, for example, incorporating a start-up and applying for funding through traditional channels).

The Concept Fund is intended to work alongside the Journey Fund discussed in Rec. 14.

Rec. 5.

The network should consist of a Central Operator of the Pre-starts network working with Franchise Operators across the country.

Scotland currently has a variety of organisations providing variations on subsets of both the fixed-location Pre-Start centres and its Pop-up variant. For delivery purposes, we propose a model whereby there exists a Central Operator, of the overall network, responsible for central administration of various elements of the network. The Central Operator would then work with Franchise Operators around the country to deliver the network. We envisage that the Franchise Operators would be partly drawn from existing organisations, who would adapt their services to meet the requirements of the Pre-starts network.

This Central Operator/Franchise Operator model encourages a more collaborative approach between existing organisations in delivering the benefits of network. It utilises their energy and experience whilst ensuring consistency and a minimum service footprint across the network. The Central Operator would also be responsible for managing central processes (such as membership, childcare grant and concept fund management) and resources (such as 3D printer access).

Rec. 6.

The design and implementation of the Pre-starts network, including Pop-up Pre-starts should involve consultation with a panel of founders from under-represented demographics.

The overall effect of the above recommendations is to establish in Scotland an integrated nationwide entrepreneurial incubation, education and support platform, and one that is properly adapted to the needs of under-represented demographics. To ensure that we stay true to these goals during implementation and beyond, we recommend that the design and development of this platform includes regular input and consultation with a panel of founders from under-represented demographics.

Rec. 7.

Funding to programmes operated by Ecosystem Builders should become formally contingent on both the selected participants and selection panels themselves comprising diverse membership.

This applies where the government directly, indirectly or in-kind funds or part-funds incubation, acceleration, networking and founder development programmes (referred to here, collectively, as Ecosystem Builders).

Rec. 8.

Funding to programmes operated by Ecosystem Builders should be formally contingent on the organisations providing detailed, transparent feedback to founders rejected from participation as a result of some selection process, with particular focus on women.

Consider the experience of a female founder who has been rejected from entry into a programme as a result of such a selection event. How the Ecosystem Builder manages this rejection process can make the world of difference to the on-going motivation of the founder in question. The difference depends on the quality of the explanation given to that founder as to why she was unsuccessful. In the absence of high-quality (or any) feedback, the founder is left wondering whether she was rejected because her chosen business domain is not considered relevant to this particular Ecosystem Builder's focal area, or alternatively whether it's just that her idea or execution is lacking within an otherwise valid chosen domain. Or was it simply sexism? Proper feedback is the difference between remotivating founders to improve and learn on the one hand, and removing them from entrepreneurial activity completely on the other.

We also recommend that Ecosystem Builders seek feedback from rejected founders from under-represented demographics on the selection process operated by the organisation, and have procedures in place to actively consider this feedback, making changes to process where appropriate.

Entrepreneurial Access Pathways

Rec. 9.

An Entrepreneurial Pathfinder platform should be created to provide context-specific information about all available support options to entrepreneurs, depending on the current stage of their entrepreneurial journey.

Entrepreneurial Pathways is a centralised resource with clearly defined pathways for entrepreneurs at various stages of their individual journeys, in each case making clear the follow-on options available to them. Of course, the value of such a resource would not be limited only to women – all participating demographics would benefit. However, given that the present situation is particularly unsuited to under-participating demographics (because they do not have the same level of access to informal entrepreneurial networks as majority demographics), these should be prioritised in the development of this resource.

Given the sheer number of supporting organisations, and the resulting pathways, Entrepreneurial Pathfinder should be context-sensitive rather than presenting all available pathways and expecting entrepreneurs to locate themselves correctly within the map. The latter approach would defeat the purpose of the exercise.

Rec. 10.

Entrepreneurial Pathfinder should be operated by an impartial organisation, acting independently of any existing specific support organisation.

Entrepreneurial Pathfinder must contain all credible support resources, both public and privately owned. To ensure that this is the case, it must be developed and maintained by an impartial entity, with digital expertise at its core. Such an organisation could, for example, be selected through a tender process, with impartiality a demonstrable condition of contract. Otherwise, the tendency to bias towards an organisation's own offerings and to deprecate others will, over time, be too great. The responsible organisation for Entrepreneurial Pathfinder must actively maintain the currency and completeness of entrepreneurial support information within the service.

We also recommend that public funding for entrepreneurial support organisations should be contingent on active engagement with the Entrepreneurial Pathfinder operating team, ensuring that information is up to date, etc.

Investment

Rec. 11.

Co-investment arrangements with private investment organisations should become contingent on participating investment firms having minimum levels of women in senior investment roles.

The Scottish Government through its various develop agencies, frequently invests alongside private investment organisations, such as venture capital firms and investment syndicates. We recommend that co-investment formally becomes contingent on participating institutional investors above a threshold size having minimum levels of women in senior investment roles^[100], subject to a grace period and specific conditions. The same consideration should apply to fund managers where the Scottish Government invests as a limited partner.

Specifically, and to allow adaptation time, a grace period for this this requirement should be instigated as follows: Enterprise agencies will only co-invest with private investment firms on the basis that at least half of the other entities participating in the investment round have at least 20% female partners within five years of the date of publication of this report. And, within 18 months of the publication of this report, participating investment firms must publish a plan indicating how they intend to reach this criterion, if they wish to continue to participate in co-investment rounds.

Rec. 12.

Where the Scottish National Investment Bank acts as a Limited Partner to "cornerstone" a fund, such participation should be contingent on the fund manager having at least 20% of its senior investment personnel being women.

Again, to allow adaptation time, a grace period for this requirement should be instigated, expiring five years from the date of publication of this report.

Rec. 13.

Co-investment models operated by Scotland's Enterprise agencies should routinely invest a greater percentage amount in start-ups with at least one female founder.

Specifically:

VC/Syndicate investment: 50% (the baseline amount).

Co-Investment: Matches baseline amount 'plus 20% of baseline amount'.

For example:

VC/Syndicate investment: £100,000

Co-investment: £100,000

Female Founder Increment: £20,000

Rec. 14.

A Journey Fund should be introduced to provide additional grant support to women, minority-ethnic founders and founders from disadvantaged backgrounds whose start-ups develop beyond the Concept Fund stage.

The purpose of the Journey Fund is to provide under-represented founders a longer runway in which to bring their start-ups to demonstrable viability, recognising the higher level of friction to accessing finance that otherwise exists for founders in these demographics. The fund would make grants of up to £50,000 available to under-represented founders whose businesses are beginning to move beyond the early stage of start-up development.

See also the related 'Concept Fund' recommendation in Rec. 4.

Rec. 15.

Scotland should act strategically to establish the country as a global centre for Femtech start-ups.

Femtech^[101] start-ups exhibit both female and male founders, with a skew towards the former. Therefore, such an approach, if successful, would not only enable Scotland to exploit a market with vast potential, it would also help to normalise investment in female founders.

Accordingly, the government should leverage ecosystem assets under its influence in a coordinated fashion to encourage Femtech start-ups to locate in the country, and to encourage investment in them.

For example, SNIB should cornerstone a Femtech fund, the Scaler network should establish a Femtech specialisation within the network, and the Scottish Technology Ecosystem Fund should allocate a portion of its budget to supporting Femtech events.

Education and Society

Rec. 16.

Educational material to counter gender role stereotyping should be integrated into all years of both Primary and Secondary school level education.

This should cover both primary-carer stereotyping, and home-manager role stereotyping.

Rec. 17.

A continuous, long-term public education programme targeted at adults and employers should be run on multiple media channels.

This campaign should contribute to dismantling stereotypical gender roles, including primary carer and home manager responsibilities.

Rec. 18.

Experiential entrepreneurial programmes, such as those currently run by Young Scotland (YES) in some schools should be expanded to be all secondary schools in Scotland.

As part of this initiative, we also recommend that more emphasis is placed on experiential learning achievements rather than simply grade-attainment, with greater credit accorded to extra-curricular and vocational than is currently the case.

Rec. 19.

The syllabuses of most subjects should be adjusted to place greater emphasis on entrepreneurial technique than is currently the case, manifested through experiential, project-based work.

By Secondary 3, optional project-based activities, such as experiential entrepreneurship programmes are the squeezed by the pressure for pupils to acquire formal qualifications such as National 5 and Scottish Higher awards.

Therefore, we recommend that syllabuses of most subjects are adjusted to place greater emphasis on entrepreneurial technique than is currently the case and that this is manifest through experiential, project-based work. These changes should then be reflected in the attainment qualifications of school leavers and subsequently recognised by employers and further education organisations. For example, this change programme could start with Business Studies initially, for learning and feedback purposes, then proceeding through science and engineering subjects, etc.

Rec. 20.

A Scottish Start-up Summer School should be instigated, providing the opportunity for senior school students to gain exposure to the start-up experience.

This programme would be modelled along similar lines to those run in some universities. The summer schools would be hosted either by universities or by Start-up Scaler sites around the country. Each participating pupil start-up team would receive a bursary to support their idea, with the best start-up ideas, and/or execution of those ideas, being publicly recognised at the end of the programme. Again, such a programme places more emphasis on experiential emphasis.

We emphasise the need for the summer school to be genuinely inclusive, and available to all pupils, regardless of race, gender or family financial situation. One consequence of this goal is that consideration must be given to ensuring that support is provided such that pupils from disadvantaged backgrounds are able, in practice, to participate.

Rec. 21.

The Entrepreneurial Campus accreditation, as described in STER and NSET should be fully implemented.

This initiative ensures that university-level and college-level students are exposed to entrepreneurial ideas and experiences as a core part of their further and higher education experience.

Rec. 22.

All university and college courses should include mandatory diversity and equality education as part of the first-year syllabus.

This shouldn't be the tick-box type, but, rather, should be tailored appropriately to illuminate each applicable subject's under-participation origins, on-going exclusionary factors, in addition to more general diversity and equality best-practice education.

Rec. 23.

The government should commission and publish an equivalent report bringing forward concrete recommendations to repair the gender gap in STEM subjects at school, college and university level

Many start-ups, especially those with high-growth potential, are dependent on STEM skills. The existing extreme gender imbalance in participation rates for STEM subjects in our schools and universities therefore heavily influences later entrepreneurial gender imbalances. This is in addition to the general economic impact of a large section of our population not participating from industries built upon these foundational subjects.

It is beyond the scope of the present report to fully diagnose and address the issue of the STEM gender imbalance in education. However, such a diagnosis - and subsequent action - are required, if we are to fully maximise the effectiveness of recommendations in the present report. We therefore recommend that an action-oriented report of equivalent scope and depth to the present report is commissioned on the issue of STEM gender imbalance within education.

Rec. 24.

The government should instigate a "Fair Society Champion" accreditation for employers

Attempting to change the role stereotypes associated with women is a useless endeavour if we don't, in parallel, change those stereotypes that attach to men. Prospective female entrepreneurs will make little progress if their male partners must meanwhile adhere to the primary-breadwinner stereotype inside their workplaces, for fear of otherwise being penalised in their careers.

This accreditation, an extension of the Fair Work Framework is awarded to those employers who can demonstrate that they embrace, and are contributing towards, a fair society through actions such as:

a. Actively encouraging and supporting men to take up their full shared parental leave.

b. Actively encouraging men as well as women to take on carer responsibilities, providing flexibility with regards to working hours pattern and location.

c. Regularly educating employees with regard to the home manager and primary carer burden.

d. Instigating processes and training to reduce the likelihood that primary carers, including men, are penalised or regarded as "not committed".

Rec. 25.

Government contracts should be awarded only to those suppliers who have attained the Fair Society Champion accreditation, or are working to attain it within a reasonable, bounded timeframe.

This approach is consistent with other requirements of the government's Fair Work Framework.

Rec. 26.

All organisations contributing services to the entrepreneurial ecosystem receiving financial support from the government should demonstrate that a programme is in place to provide all staff with mandatory diversity and equality training.

Examples include incubators, accelerators, conferences, scale-up programmes.

Rec. 27.

Scotland should fully implement the Misogyny and Criminal Justice Working Group recommendations contained in the report: Misogyny: a human rights issue.

There is currently no existing law in Scotland directed against misogyny. However, the Misogyny and Criminal Justice Working Group published the report Misogyny: a human rights issue in March 2022. The report recommends:

• a new statutory aggravation to relate to misogynistic conduct where a crime such as assault, criminal damage/vandalism or threatening or abusive behaviour is aggravated by misogyny
• a new offence of stirring up hatred against women
• a new offence of public sexual harassment of women, and
• a new offence of issuing threats of, or invoking, rape or sexual assault or disfigurement of women and girls online and offline
  • At the time of writing, these recommendations have been accepted in principle by the Scottish Government, but not yet implemented.
  • A timetable for completion of the detailed review of these recommendations, and their implementation, should be published by the Scottish Government.

Rec. 28.

A gender- and ethnicity-disaggregated common database should be made accessible to stakeholders within the entrepreneurial ecosystem,

The database should combine both public and private sector entrepreneurship/start-up statistics and be capable of disaggregating data, at least by gender and ethnicity dimensions.

Rec. 29.

The government should make it compulsory that any applicable entrepreneurial organisations receiving financial assistance and those in co-participation arrangements involving public money should make data available to this platform, such data being dependent on the nature of the activity involved.

For example, investment organisations operating co-investment agreements with the government or one of its agencies would be required to publish data relating to partner and investment staff demographics and the demographics of those start-ups receiving investment from the organisation, where such investment was part of a co-investment operation with the government or one of its agencies.

Rec. 30.

The government should publish an annual analysis of entrepreneurship participation trends, disaggregated by gender and ethnicity dimensions.

This process should be integrated into the government's Wellbeing Economy Monitor reporting cycle^[102].

Rec. 31.

The Scottish Government should commission and publish further recommendations reports addressing entrepreneurial under-representation in other demographics.

The report was commissioned to consider the under-participation of women in entrepreneurship, but the recommendations have wider applicability. This is because many of the root-cause issues affecting entrepreneurial under-participation as regards gender also affect other under-represented groups. For example, from the research conducted for this report, it was clear that some of the factors that undermine the participation of women in entrepreneurship also apply to demographics such as recent migrant groups, rural entrepreneurs and those located within disadvantaged urban areas, and that they are further amplified at their intersection.

Accordingly, it is likely that, in some instances, the recommendations made in this report will also have utility in raising participation rates within these other demographics. However, it is beyond the scope of this report to fully explore all under-participating demographics, and we recommend that detailed follow-on work is performed in these areas.

It is anticipated that such work would build upon the recommendations contained in the present report, and extend these appropriately to properly address the specific additional participation challenges experienced by the above demographics.