SMEs run by women: Share of women-led enterprises is on the decline

• Only 16.4% of German SMEs are today managed by a woman
• Favourable labour market situation is one reason for the decline
• KfW’s Chief Economist Zeuner: “The German economy needs highly trained women”

The share of women in board-level positions at German SMEs is falling. This is the finding of a special survey recently conducted by KfW Research on the basis of the KfW SME Panel. In 2016, women were at the helm of 16.4% of the approx. 3.71 million small and medium-sized enterprises. That was a drop of 1.6 percentage points from 2015.

The share of women has recently recorded several consecutive declines, including among start-ups. In 2016, only 270,000 women started a business of their own – down 17% from 2015. The drop was most pronounced in full-time start-ups. One likely reason for the decline is the good situation in the German labour market, which has benefited women most of all. They regard self-employment less and less as a career choice. With a time lag, this decline will slow the growth of female-managed SMEs in the coming years.

The analysis performed by KfW Research further demonstrates that the economic importance of women-led SMEs remains disproportionally low. One reason for this is the size and sectoral structure of women-led SMEs. More than three fourths of small and medium-sized businesses headed by women are service enterprises with fewer than five employees.

“The recent decline in the number of SMEs managed by women is alarming”, said Dr Jörg Zeuner, Chief Economist of KfW Group. “And the German economy has an increasingly urgent need for highly trained women, particularly in the management of businesses. In the future, the shrinking working-age population, the growing skills shortage and the management succession facing many SMEs in the coming years will leave not just empty executive chairs”.

The one-pager entitled “Female managers of SMEs” is available (in German only) at www.kfw.de/kompakt