Group Of Businesswomen Collaborating In Creative Meeting Around Table In Modern Office

Opportunity: Unlocking female founders could return £310 billion to the UK economy

New analysis from The Gender Index, supported by research from Warwick Business School's Enterprise Research Centre, reveals that structural barriers preventing female-led firms from scaling are costing the UK economy an estimated £310 billion annually in unrealised economic output.

The findings, based on longitudinal data covering more than 5.3 million active UK companies, highlight a persistently “stalled” landscape for female entrepreneurship. Despite sustained policy attention and diversity initiatives, the proportion of female-led businesses has remained broadly static at around 18 per cent.

Researchers suggest that addressing constraints on growth could unlock significant national productivity gains by enabling more female-led firms to scale to high-growth status.

Strong performance, persistent funding gap

The research highlights a clear performance paradox: female-led businesses frequently outperform market averages in revenue growth, yet continue to face disproportionately limited access to external finance.

Recent analysis shows that female-led firms recorded average turnover growth of 22.1 per cent, compared with 18.0 per cent for male-led businesses.

However, this outperformance is not reflected in investment flows. Female-led firms continue to secure significantly smaller funding rounds, with average equity deals of approximately £500,000, compared with £3.7 million for male-led enterprises. Access to debt finance also remains constrained across UK regions, regardless of firm performance.

Stephen Roper, Professor of Enterprise at Warwick Business School and Director of the Enterprise Research Centre, said the data points to persistent inefficiencies in how capital is allocated across the UK economy.

“The evidence shows a clear mismatch between performance and investment. Female-led firms are delivering strong growth, yet the financial system is not consistently recognising or rewarding that performance." He said.

This represents a significant misallocation of capital and a missed opportunity for national productivity.”

The gender penalty in investment decisions

The findings align with academic work from Noni Symeonidou and Dawn Eubanks at WBS, who have examined how perception bias influences investment decision-making.

Their research suggests that female founders are more likely to encounter unconscious bias in equity finance processes, with investors often underestimating growth potential despite comparable or superior performance metrics.

While many entrepreneurs navigate these challenges through networks and experience, the data indicates that individual resilience does not offset systemic disparities in funding allocation.

Scaling impact and economic potential

The UK currently has more than 1,800 female-led “superscalers”, firms generating over £10 million in annual revenue, collectively supporting approximately 128,000 jobs.

Researchers suggest that if barriers to scale were reduced, the number of high-growth female-led firms could increase substantially, with corresponding gains in employment, innovation, and regional economic development.

Sam Cooper-Gray, Chair of The Gender Index, said the findings highlight the importance of addressing structural constraints rather than focusing solely on individual entrepreneurship.

“Female founders are not asking for preferential treatment," she said. "They are asking for equitable access to capital, consistent deal sizes, and unbiased assessment of their businesses. The evidence shows that when those conditions exist, performance is already there.” 

Further reading:

Why are ambitious female founders penalised by investors?

The key leadership skills for small business growth

Why human relationships are key in venture capital

Growing pains: How to help small businesses scale

 

Stephen Roper is Professor of Enterprise and Director of the Enterprise Research Centre.

Dawn Eubanks is Associate Professor of Behavioural Science and Entrepreneurship & Innovation at Warwick Business School. She teaches Leadership and Harnessing Diversity on the Global Online MBA, and the Executive MBA, Leadership Plus on the Full-time MBA, and Leadership on the Executive MBA (London).

Noni Symeonidou is Associate Professor of Entrepreneurship and Innovation at Warwick Business School. She teaches on Entrepreneurship and Business Venturing on MSc International Business, MSc Business Analytics, MSc Business and Finance, MSc Business with Operations Management, MSc Management of Information Systems and Digital Innovation, MSc Business with Marketing, and MSc Marketing and Strategy.

Discover more about Entrepreneurship and Innovation. Receive our Core Insights newsletter via email or LinkedIn.