Percentage of women in SMEs rising only slowly – COVID-19 crisis hits SMEs managed by women and men equally hard

• Percentage of SMEs managed by women rises only slightly to 16.8% in 2020
• Across SMEs as a whole enterprises managed by women and men hit equally hard
• Among the young self-employed, who have only been on the market for a few years, women have seen turnover decline more than men

The COVID-19 crisis has hit German SMEs similarly hard, irrespective of whether they are headed by a woman or a man. This is demonstrated by a recent KfW Research study, based on the representative KfW SME Panel. In January 2021, some two thirds of enterprises reported sustaining adverse impacts as a result of the pandemic; this figure was broadly similar for SMEs managed by women and by men. In the sub-group of the young self-employed, who have only been on the market for a few years, additional findings from a survey conducted by KfW Research in cooperation with the start-up platform Gründerplattform indicates that self-employed women have been harder hit. Since the outbreak of the COVID-19 crisis, 36% of men and 45% of women responding have seen their turnover decline by more than half.

The differences among the young self-employed can largely be explained by the sectoral structure. Sectors that have seen turnover decline the most are sectors in which a high percentage of entrepreneurs are women, including social services and the creative economy. By contrast, self-employed IT specialists, a large percentage of whom are men, have seen their turnover hold up far better.

If we look at the SME sector as a whole, last year about 638,000 women headed a small or medium-sized enterprise in Germany, or were self-employed – 25,000 more than in 2019. At 16.8%, the percentage of all small and medium-sized enterprises that are run by a woman remains significantly below the peak of 19.4% recorded in 2013. The low numbers of women starting up a business in general, and the decision to postpone start-up projects, which was seen more frequently in 2020 during the pandemic, have impacted negatively on the percentage of women running businesses.

“This year, there is unfortunately little good news from Germany’s SME sector for International Women’s Day on 8 March: women are still underrepresented at the helm of small and medium-sized enterprises, and their numbers increased little in 2020 during the pandemic,” said Dr Fritzi Köhler-Geib, KfW’s Chief Economist. “The reluctance of women to start up businesses, which we have seen for several years, is slowing the rise in the numbers of women-managed businesses. The fact that young female self-employment has been more badly hit by the COVID-19 restrictions, is likely to put a further damper on prospects. It seems unlikely that more women will be found at the executive levels of small and medium-sized enterprises in the foreseeable future.”

Read the latest KfW Research analysis of women heading and managing SMEs at
www.kfw.de/kompakt (available only in German)

Background information on the data
KfW’s latest analysis of the percentage of women across Germany’s SME sector, and the extent to which the sector has been hit by the COVID-19 pandemic is based on the KfW SME Panel. Every year, this representative survey of small and medium-sized enterprises with a maximum annual turnover of EUR 500 million covers some 10,000 enterprises. For the additional survey of start-ups and young self-employed KfW Research conducted an online survey between 4 and 15 February 2021 of registered users of the start-up platform (www.gruenderplattform.de) run by the Federal Ministry for Economic Affairs and Energy, KfW and BusinessPilot. Responses were received from 492 young self-employed and 218 people planning a business start-up. The survey design means that the findings are not representative, but they do provide an important insight into the way the crisis has affected the self-employed and those planning to become self-employed. KfW Research in advance evaluated the data on how the coronavirus pandemic has affected women among the young self-employed and women planning to start up a business, so that this information is available for International Women’s Day. The full analysis will be published by mid-March 2021.