Decline has stopped: share of SMEs run by women is up again
Press Release from 2020-01-07 / Group, KfW Research
- First increase of female company executives in four years
- 16% of German SMEs are run by a woman
- Women are often at the head of service businesses but few manufacturing firms
According to the current KfW SME Panel, the share of women at the helm of small and medium-sized enterprises (SMEs) has increased again slightly for the first time in four years. The panel has established that in 2018 some 613,000 of the 3.81 million SMEs were headed by women, a share of 16.1%. By comparison, the share of women on the management boards of large enterprises is only 9.6% despite the mandatory female quota.
The highest proportion of female managers in SMEs, 19.4%, was recorded in 2013, but it has been on the decline ever since. One of the main factors for this low rate was the cautious start-up activity of women in the past years. The share of women among business founders has increased again to 40%, and this is also having a positive impact on the share of female executives in the SME sector.
Dr Friederike Köhler-Geib, KfW’s Chief Economist, sees further potential for development: “The German economy can no longer afford to neglect the potential of women – at all levels. We are facing a skills shortage and the working-age population will shrink. It is therefore highly desirable for more women to occupy the executive floors of SMEs. Not least, greater mobilisation of women can help to ease the more challenging situation of business succession in the future. Germany’s SMEs need more women in management.”
In a sector-specific analysis of businesses headed by women, the service sector clearly predominates. Eighty-five per cent of female managers are at the head of a service provider. By contrast, the share of women executives is very low in research and development-intensive manufacturing, in particular. This segment includes mechanical engineering, automotive engineering and pharmaceuticals. Fewer than 1,000 of these businesses (of approx. 52,000 in this segment) are headed by a woman, reflecting a 2% proportion of female executives.
Details about the database:
KfW Research has been monitoring the development of women in leadership for years.. The current analysis is based on a special evaluation of the representative KfW SME Panel 2019, which has been conducted since 2003 as a tracking survey of small and medium-sized enterprises in Germany. The basic population of the KfW SME Panel includes all private-sector companies from all industries with annual turnovers of up to EUR 500 million. The main survey was conducted from 11 February to 21 June 2019.