Smart Moves: Women drive the recovery

WOMEN in small businesses are powering the current growth rates in the British economy, with more than half of all business start- ups now in the hands of women.

The rise in the number of female entrepreneurships is itself being driven by the negative experiences women encounter in many large firms. They still often find themselves passed over for promotion, subject to greater stress than their male counterparts, and marginalised in corporate decision- making processes.

To combat this, they can do two things: the first is to stay put and change the culture of business and attitudes of their male colleagues. This strategy has produced results on occasions; in some sectors more women are now in senior corporate positions. Even so, their numbers remain small.

The other response is to quit and set up their own businesses - this is the option favoured by increasing numbers. Research suggests that women are more likely to be more successful in business start-ups than men and less likely to fail in the first year of trading. In addition, their businesses are more likely to grow and create jobs than those started by men.

If large organisations are incapable of utilising the talents of their female staff - and to the detriment of corporate innovative and competitive advantage - the outcome will be greater entrepreneurship in the economy. This is leading to new management styles, new types of business culture, and new ways of doing things.

This is because women entrepreneurs tend to reject the prevailing cultural practices of big business and to run their own enterprises on different principles. They link their need for personal growth to the expansion of their businesses. These become the channels through which they express their creativity, personal assertiveness and independence. In other words, their enterprises are reflections of their own psychologies. Business growth for these women entrepreneurs is as much about achieving personal success goals as it is about making money. In this, they are different to most male entrepreneurs.

Their experience of under-promotion in large organisations encourages them to manage their staff differently. They are more likely to empower them, delegate and use supportive leadership styles. This encourages open communication. The result is that their companies are more innovative, responsive to changing market trends and more growth-orientated. They are inclined to encourage employee commitment rather than impose controls that lead to non-creative compliance and conformity.

These trends are more evident in some economic sectors than others. But it is becoming important in professional and business services, in public relations, advertising, sales and marketing, the entertainment industry, financial services and the media.

Almost every projection for Britain suggests the economy will be dominated by small businesses. This will be the result of a decline in manufacturing, re-struct- uring of large organisations, the impact of IT, and the growth of the service sector. It is perhaps ironic that women entrepreneurs are at the forefront of these structural shifts because of the neglect of their talent and the prejudices they encounter from men. Female entrepreneurship confirms the failure of large corporations to implement equal opportunities policies and for them to continue to undervalue their female staff. But the paradox is that the British economy benefits through the creation of growth-orientated, entrepreneurial ventures. But the latter is no excuse for the former.

Richard Scase is Visiting Professor at the Economic and Social Research Council's Centre on Social Change at the University of Essex.