Recent government research has shown a notable decline in the number of women who own businesses, reversing four years of progress in this area.

An annual survey encompassing 7,800 businesses with fewer than 250 employees indicated that only 15 percent were owned or led by women last year, a reduction from 18 percent in 2022 and 19 percent in 2021.

This decline translates to approximately 43,000 fewer women leading or owning small and medium-sized enterprises (SMEs), based on the Department for Business and Trade’s estimate of 1.44 million such employers. The last time the survey indicated female ownership at this level was in 2019.

The survey also revealed that the percentage of all-male management teams within SMEs has remained static at 44 percent, while the proportion of firms with gender-diverse senior management teams increased slightly from 24 percent in 2021 to 25 percent last year.

This data comes shortly after Rachel Reeves, the Chancellor, expressed her support for initiatives aiming to position the UK as a premier destination for female entrepreneurs. At a Women in the Economy event at No 11, Reeves endorsed the Invest in Women Taskforce, which estimates that achieving gender parity in business ownership could yield a £250 billion boost to the UK economy.

Research commissioned by this taskforce found that businesses established by all-female founding teams obtained just 1.8 percent of total venture capital funding in the first half of the year, a decrease from 2.5 percent throughout 2023.

Debbie Wosskow, a serial entrepreneur and co-chair of the taskforce, described the decline in female business ownership as “incredibly disheartening”. She noted that women’s careers were negatively impacted during the pandemic and that this drop in female ownership could reflect that ongoing struggle.

Wosskow emphasized that female entrepreneurs noted in the survey predominantly operated in sectors such as health, education, arts, and hospitality—fields that are typically less attractive to investors looking to support small business growth.

“I want to encourage female entrepreneurs not to be discouraged,” Wosskow said. “As a founder myself, I urge you to persist, particularly since many women establish businesses that empower other women.”

Maxine Benson, co-founder of Everywoman—an organization advocating for women in business for 25 years—stated that there is a pressing need to showcase the triumphs of female entrepreneurs to inspire others.

“Sharing these success stories more broadly will inspire women and help them gain the confidence to pursue their career goals, advance into leadership roles, or start and grow their own businesses,” she said.

“Addressing the unique challenges faced by women in business, such as the lack of role models and the funding gap, is essential for ensuring the future growth of the UK economy.”

The business department’s annual survey also indicated no significant change in the proportion of ethnic minority SME leaders, which remained at 7 percent last year, consistent with figures from 2015.

Following Brexit in January 2021, the percentage of SMEs exporting to the European Union has steadied at 14 percent, down from 16 percent in 2019.

Despite government efforts to promote trade with non-EU countries, including signing free trade agreements, only 13 percent of SMEs are engaging in such trade—a figure unchanged since 2019. More businesses are now looking towards the United States and Canada, while imports from both the EU and other regions have fallen between 2022 and 2023.

Concerns were raised about energy costs, taxation levels, and regulations being cited as more significant hurdles to growth than the availability of skilled labor.

The Department for Business and Trade stated: “Fostering female entrepreneurship is crucial for our economic growth objectives. We are actively working to reverse the troubling trends we observed, establishing initiatives like our taskforce aiming to create one of the world’s largest funding pools, featuring a £250 million allocation for female-led businesses.”