Tech and science scaleups are becoming key players in the UK government’s push for economic growth. The ScaleUp Institute reports that these scaling firms now generate 55% of the UK’s SME output, totaling a staggering £1.45 trillion, even though they make up just 0.6% of all businesses.
But the scaleup scene has major diversity challenges. Only one in three UK entrepreneurs are women, which means we’re missing about 1.1 million businesses due to this gender gap. Male-led SMEs are five times more likely to reach a £1 million turnover compared to their female counterparts. To add to that, only 1.8% of equity capital goes to female-founded businesses. These gaps are not just unfair—they also represent significant economic opportunities that remain untapped.
Diversity holds clear advantages. Research shows that diverse teams tend to be more innovative, make better decisions, and tackle problems more effectively. McKinsey’s Diversity Wins report even found that companies with gender-diverse executive teams have a 25% higher chance of achieving above-average profitability. Yet, as Beauhurst points out, the lack of solid data on diversity—covering gender, age, and nationality—makes it tough to fix systemic issues, though anecdotal evidence strongly suggests underrepresentation is a real problem.
Mia Haffaty from TechUK made it clear: “Improving diversity within UK tech and science scaleups is more than a moral imperative—it is a strategic necessity for sustainable growth.”
Despite these hurdles, there are encouraging signs of progress. In tech, Vorboss sets a strong example with a build and installations team that’s nearly 40% female. The Invest in Women Taskforce is making strides, having secured over £250 million to support female entrepreneurs in the UK. Big investors like Barclays, M&G, and the British Business Bank are committing to female-founded businesses.
On the government side, shifts are happening too. Secretary of State for Education Bridget Phillipson’s appointment as Minister for Women and Equalities highlights a broader commitment to inclusivity, especially with the first female Chancellor of the Exchequer unveiling a female-led Autumn Budget. The Budget includes the British Business Bank’s pledge to boost funding for female entrepreneurs with a £50 million commitment aimed at supporting initiatives like the Invest in Women Taskforce.
Improving diversity in UK tech and science scaleups isn’t just the right thing to do—it’s vital for sustainable growth. The government should prioritize diversity in its policies, focusing on opening up access to capital, talent, and creating fair procurement processes. This isn’t just about innovation leadership for the UK; according to the Rose Review of Female Entrepreneurship, embracing diversity could add £250 billion to the economy.
To act swiftly, the government could enhance data collection on growing businesses, providing policymakers with solid evidence on female entrepreneurship. The Office for Equality and Opportunity should collaborate with HM Revenue & Customs and Companies House for this initiative. Additionally, tracking returns from women-founded businesses at various growth stages could encourage investors to fund female-led scaleups.
By fostering diversity, the UK can tap into the full potential of its scaleup ecosystem and aim for a brighter, more equitable future.