Since the beginning of the pandemic, politicians have been at pains to proclaim that the coronavirus understands neither borders, nor races… nor genders. Although this statement is true from a health point of view, in the world of entrepreneurship it is being observed that the economic consequences are indeed varying according to gender. Once again, women entrepreneurs are the worst off, as shown in a report carried out jointly by Entrepreneurs Network and Barclays.
According to the study, only one in three businesses in the UK was founded by a woman and it is precisely this third of businesses which are suffering the greatest negative impact in the wake of the pandemic. Based on the data, businesses founded by female entrepreneurs were about twice as likely as those founded by men to face significant disruptions, such as store closures or delayed product launches.
What are the reasons behind the widening gender gap? Our first problem is funding, even before the crisis, only 13% of investment ended up in businesses created by women. It is logical, therefore, that the startups most affected by the crisis are those founded by the entrepreneurs who have less funding.
The second reason is connected to the domestic role that women have traditionally played. The pandemic brought the confinement, and in this context many women have been forced to take the reins of their homes rather than their businesses. Before the pandemic, mothers worked 80% of the hours that fathers worked. During confinement, this rate dropped to 70%.
The economic consequences of the coronavirus are not only gender-specific, but also sector-specific, where women are again being affected. Women have a greater presence in sectors such as commerce, hospitality, and leisure — sectors that have been severely affected by the pandemic. On the other hand, the female presence in technology-based startups, which are the ones that have experienced the greatest development this year, is reduced to 28%.
The importance of closing the gap
It’s not all bad news for women entrepreneurs. According to the Entrepreneurs Network study, 60% of businesses run by women had returned to normal activity without suffering serious disruptions by September. In this context, reinventing oneself is key and this is what CMe Media did, a marketing agency that lost income when advertising spaces lost value, but has recovered thanks to the development of new payment plans. According to the aforementioned report, more government measures are needed to combat the gap. Publishing statistics on the gender of entrepreneurs or designing new business support schemes are some of them.
As in many other aspects of the economy, the coronavirus has had a negative impact on the gender gap. In recent months, it has widened, breaking the convergent trend of recent years. Although the coronavirus does not understand gender, the economy does. Therefore, it is necessary that women entrepreneurs are able to reinvent themselves and that they have government support to do so. To overcome this crisis, it will be necessary to support all entrepreneurs… and female entrepreneurs.