Scaling up technology and science is increasingly recognized as a key driver of the UK Government’s mission to accelerate economic growth. According to the ScaleUp Institute, scale-ups currently account for 55% of the UK’s small business output (worth £1.45 trillion), despite only making up 0.6% of the business population.
However, the scale-up ecosystem faces significant challenges in diversity at all levels, including founders, directors, and employees. For example, only one in three entrepreneurs in the UK is a woman, and this gender gap equates to 1.1 million lost businesses. Male-led SMEs are five times more likely to reach a turnover of £1 million than female-led SMEs, and only 1.8% of capital is allocated to women-founded businesses. These disparities not only hinder growth but also represent untapped economic potential.
It is clear that we need diversity. Research consistently proves that diverse teams are more innovative, make better decisions, and are better problem-solvers. McKinsey’s Diversity Wins Report found that companies in the top quartile for gender diversity on their leadership teams are 25% more likely to achieve above-average profitability. However, as Beauhurst highlights, a lack of robust diversity data across gender, age and nationality addresses systemic inequalities, even though anecdotal evidence strongly points to underrepresentation. limited ability to do so.
“Improving diversity in UK technology and science scaling is more than just a moral imperative, it is a strategic necessity for sustainable growth.”
Mia Hafferty, TechUK
Despite these challenges, there are examples of promising progress. In the technology space, companies like Vorboss are setting benchmarks by having approximately 40% women in their construction and installation teams. Initiatives such as the Investing in Women Taskforce are driving systemic change, securing over £250m of funding to support women entrepreneurs in the UK. Major investors including Barclays, M&G, British Business Bank, Morgan Stanley, Visa Foundation, BGF and Aviva have committed to investing in women-founded companies.
Government leaders are also showing signs of prioritizing diversity. Education Secretary Bridget Phillipson’s appointment as Minister for Women and Equalities underlines her commitment to embedding inclusivity in national policy, with the first female-led Autumn Budget tabled on 30 October. It goes without saying that we now have a female finance minister. It marked a historic moment. The Budget commits British Business Bank to increase funding for women entrepreneurs, unveiling measures including £50m for women-led funds and supporting the mission of the Women’s Investing Taskforce. I made it.
Improving diversity in the scale-up of UK technology and science is not just a moral imperative, but a strategic necessity for sustainable growth. Governments need to embed diversity at the heart of all policies and decisions, including access to capital, access to talent, unlocking upskilling and creating a level playing field for procurement. According to the Rose Review on Women’s Entrepreneurship, this approach is not only important for the UK’s innovation leadership, but also has the potential to boost the economy by £250bn.
Is there any immediate action the government can take? Improve data collection on growing businesses and provide policymakers with stronger evidence on women’s entrepreneurship and founders. This should be led by the Equalities and Opportunities Office in collaboration with HM Revenue & Customs and Companies House. In parallel, we will provide statistics on the returns women-founded companies deliver at each stage of growth and seek to encourage investment in women-led scale-ups.
By championing diversity, the UK can unlock the full potential of its scale-up ecosystem and secure a richer and fairer future.
Mia Hafferty is Policy Manager for the Digital Economy at TechUK.
