Research shows backing female-led businesses is good for growth
New government-commissioned research shows that increasing support for female-led businesses could unlock significant economic growth across the UK. Despite strong performance and clear growth potential, women-founded companies continue to face barriers to investment and scale.
For the sixth consecutive year, signatories of the Investing in Women Code (IWC) have directed a greater share of funding to female-led businesses than the wider investment market.
The findings published yesterday as part of the IWC’s annual report come as the government works to unlock the UK’s full entrepreneurial potential by ensuring founders can access the finance they need to start and scale a business, regardless of gender.
Blair McDougall, Minister for Small Business and Economic Transformation, said, “For the sixth year in a row, Investing in Women Code signatories have outperformed the wider market, showing that backing female founders is good for business and good for growth.”
“Yet women-led businesses still face greater barriers to funding and growth. That is why the Code matters – helping more women start, scale, and succeed, while unlocking talent, creating jobs and strengthening the UK economy.”
The research also reinforces the importance of targeted programmes that help women start and grow businesses, particularly in regions where female entrepreneurship is underdeveloped.
Strengthening these initiatives is expected to boost innovation, job creation and regional productivity.
Sheila Flavell CBE, COO of FDM Group, commented, “The lack of diversity across industries including technology continues to be a significant barrier to growth. Research showing the clear economic benefits of female-led businesses highlights an issue we must address. While some progress is being made to encourage women through returners schemes and more equitable pay, barriers such as unconscious bias still exist.
“Upskilling must be at the heart of this effort. From early education through to reskilling and career progression, there should be clear, supported pathways into technical and leadership roles. Businesses and government must work together to invest in training that equips women with in-demand digital and AI capabilities, to unlock the full potential of the UK workforce.”
The UK Government is also helping address this through the Invest in Women Taskforce, which has already deployed more than £70 million from its £635 million funding pool in its first year.
This builds on wider efforts to diversify the investment market, including the British Business Bank’s £400 million Investor Pathways Capital Initiative, designed to support emerging fund managers and widen access to investment opportunities.
The government will continue to work with industry partners to expand support for women entrepreneurs and ensure they have access to the finance, networks and opportunities needed to start and scale successful businesses.
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