Number of women starting businesses at record high with major growth in female founders over 50 – SME Magazine

Report on Female Entrepreneurship in the UK and its Alignment with Sustainable Development Goals

Executive Summary

A recent report indicates a record high in early-stage entrepreneurial activity among women in the United Kingdom, reaching 9.2% of the adult female population. This growth signifies progress towards Sustainable Development Goal 5 (Gender Equality) and SDG 8 (Decent Work and Economic Growth). However, this positive trend is contrasted by a significant “scale-up crisis,” with a sharp decline in the number of women-led employer firms. This report analyses these findings, highlighting the systemic barriers that impede progress on the SDGs and outlining recommendations to foster a more inclusive and sustainable entrepreneurial ecosystem.

Analysis of Entrepreneurial Activity and Growth

Rise in Early-Stage Ventures

The rate of women initiating new business ventures has shown substantial growth, contributing to economic dynamism and gender equality.

• Early-stage entrepreneurial activity among women increased from 5.7% of the adult population in 2015 to a record 9.2% in 2025.
• Women aged over 50 represent one of the fastest-growing entrepreneurial demographics, accounting for 25% of all female business owners. This trend supports SDG 10 (Reduced Inequalities) by promoting economic participation across different age groups.

The “Scale-Up Crisis”: A Barrier to SDG 8

Despite the start-up boom, a critical challenge remains in scaling these businesses, which directly impacts the potential for job creation and sustained economic growth as outlined in SDG 8.

• The proportion of women-led Small and Medium-sized Enterprises (SMEs) that employ staff fell from 19% in 2021 to 14% in 2025.
• This represents a net loss of approximately 70,000 women-led employer firms, undermining progress towards robust economic growth.

Systemic Barriers to Gender Equality and Economic Empowerment

Obstacles to Scaling and Sustainable Growth

Several factors prevent women-led businesses from scaling, hindering the achievement of SDG 5 and SDG 8. These barriers include:

• Economic Pressures: Rising fixed costs and fragile profit margins.
• Financial Exclusion: Limited access to the necessary finance for growth.
• Structural Disadvantages: Business models often structured around unpaid care responsibilities and the need for flexible work.
• Sectoral Concentration: A high concentration in traditionally low-margin service industries.

Challenges for Vulnerable Groups: A Threat to SDG 10 and SDG 1

Specific demographic groups face compounded disadvantages, which works against the goal of reducing inequalities.

• Women Over 50: This growing group is often overlooked by business support and finance programmes that target younger founders. They face challenges including age discrimination, caring responsibilities, and limited pension security.
• Disabled and Ethnic Minority Women: These entrepreneurs face significant barriers, most notably limited access to finance, which perpetuates inequality.
• Entrepreneurs on Universal Credit: Current welfare policies can penalise business growth, forcing women to reduce their hours or close their businesses. This creates a poverty trap, directly conflicting with SDG 1 (No Poverty).

Regional and Sectoral Dynamics

Geographic Trends and SDG 11

While London has the highest absolute number of women-led businesses, significant growth is occurring across the UK, promoting more balanced regional development in line with SDG 11 (Sustainable Cities and Communities).

• North West England: 41% growth since 2020
• Scotland: 37% growth
• West Midlands: 35% growth
• Wales: 28% growth

Sectoral Shifts and SDG 9

While female entrepreneurship is concentrated in service sectors, a notable shift towards innovative and sustainable industries aligns with SDG 9 (Industry, Innovation, and Infrastructure).

• A growing number of women are entering STEM-aligned and sustainability sectors, including digital consultancy, renewable energy, and ethical fashion.
• The number of women-led businesses in digital and ICT services has more than doubled (+115%) between 2015 and 2025.
• Conversely, participation in hospitality and retail has stagnated due to rising costs.

Policy Recommendations for Advancing Sustainable Development

To address the identified challenges and leverage the potential of female entrepreneurship for achieving the SDGs, the following actions are recommended:

1. Promote Decent Work and Economic Growth (SDG 8): Implement targeted support programmes specifically designed to help women-led businesses scale up, thereby creating more employer firms.
2. Reduce Inequalities (SDG 10): Expand enterprise support for women over 50 and other underserved groups, ensuring programmes address age discrimination and other intersectional barriers.
3. Advance Gender Equality and Innovation (SDG 5 & SDG 9): Improve access to follow-on finance and regional investment to help women scale their businesses, particularly those in innovative and sustainable sectors.
4. End Poverty and Reduce Inequalities (SDG 1 & SDG 10): Align business and welfare policies to ensure that entrepreneurship is a viable pathway out of poverty and that social security systems do not penalise business growth.

Analysis of the Article in Relation to Sustainable Development Goals (SDGs)

1. Which SDGs are addressed or connected to the issues highlighted in the article?

1. SDG 5: Gender Equality

   • The entire article focuses on the economic empowerment of women through entrepreneurship. It discusses both the growth in women’s entrepreneurial activity and the specific barriers they face, which are central to achieving gender equality. The text highlights a “start-up boom” among women but also a “scale-up crisis,” pointing to systemic issues that prevent women-led businesses from growing, directly relating to economic equality.

2. SDG 8: Decent Work and Economic Growth

   • The article directly addresses economic growth by discussing entrepreneurship as a key driver. It mentions that “Women’s early-stage entrepreneurial activity is now 9.2% of the UK’s adult population” and that supporting this sector “could be one of the UK’s strongest economic growth opportunities.” It also touches upon decent work by highlighting issues like “income volatility” and the need for business models that accommodate flexible work.

3. SDG 10: Reduced Inequalities

   • The article explicitly points out the inequalities faced by specific subgroups of women entrepreneurs. It states that “women over 50 are underserved by business support and finance programmes,” and also mentions the challenges for “disabled women entrepreneurs and ethnic minority women, including limited access to finance.” This focus on the inclusion and support for marginalized groups is a core component of SDG 10.

4. SDG 9: Industry, Innovation, and Infrastructure

   • The article touches on innovation and industry by noting that “a growing proportion of women are moving into STEM-aligned and sustainability sectors, such as digital consultancy, renewable energy, and ethical fashion.” The challenge of “limited access to finance” for scaling up these innovative businesses is a key issue related to the financial infrastructure needed to support industrial and entrepreneurial growth.

2. What specific targets under those SDGs can be identified based on the article’s content?

1. Target 5.5: Ensure women’s full and effective participation and equal opportunities for leadership in economic life.

   • The article’s central theme is the participation of women in economic life as business owners. The “scale-up crisis,” evidenced by the fall in “women-led employer SMEs… from 19% of all employer firms in 2021 to 14% in 2025,” directly reflects a challenge to women’s leadership and full participation in the economy. The recommendations for “targeted support for women to scale up their businesses” aim to address this target.

2. Target 8.3: Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity and innovation, and encourage the growth of micro-, small- and medium-sized enterprises, including through access to financial services.

   • This target is directly relevant as the article discusses the “start-up boom” in women’s entrepreneurship and the need to support the growth of these SMEs. The barriers identified, such as “limited access to finance” and “rising fixed costs,” and the recommendations to “expand enterprise support” and “improve access to follow-on finance” are all actions aimed at achieving this target.

3. Target 10.2: By 2030, empower and promote the social, economic and political inclusion of all, irrespective of age, sex, disability, race, ethnicity…

   • The article specifically highlights the need for economic inclusion for various groups. It notes that “women over 50 are underserved by business support,” and that there are unique “challenges too for disabled women entrepreneurs and ethnic minority women.” The call to action for “support for later-life entrepreneurs” is a direct effort to promote the economic inclusion of an age-specific group.

4. Target 9.3: Increase the access of small-scale industrial and other enterprises… to financial services, including affordable credit…

   • The article repeatedly emphasizes “limited access to finance” as a major barrier holding female entrepreneurs back from scaling their businesses. The recommendation to “improving access to follow-on finance and regional investment” directly aligns with the goal of increasing access to financial services for small enterprises to foster their growth and integration into the economy.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

1. Proportion of women in leadership/managerial positions.

   • The article provides a direct indicator for this by stating, “the number of women-led employer SMEs falling from 19% of all employer firms in 2021 to 14% in 2025.” This statistic measures the proportion of businesses with employees that are led by women, serving as a proxy for women’s leadership roles in the economy.

2. Total early-stage entrepreneurial activity (TEA) rate by gender.

   • The article explicitly mentions this indicator: “Women’s early-stage entrepreneurial activity is now 9.2% of the UK’s adult population, the highest level ever recorded,” up from “5.7% of adult population in 2015.” This data point directly measures the rate of new business creation among women.

3. Proportion of entrepreneurs by demographic group (age, disability, ethnicity).

   • While not providing a comprehensive set of statistics, the article implies the importance of this indicator by highlighting specific groups. It states that “women aged over 50 are one of the fastest-growing group of entrepreneurs, accounting for one in four female business owners.” It also points to the need to track the progress of “disabled women entrepreneurs and ethnic minority women,” suggesting that data on their entrepreneurial rates is a necessary indicator of inclusion.

Summary of SDGs, Targets, and Indicators

Source: smeweb.com