ABOUT ESSENTIAL ECONOMICS
Essential Economics is an independent economic research service founded by Paola Subacchi.
Drawing on expertise in the international monetary system, global financial imbalances, international capital flows and international financial centres, Essential Economics specialises in identifying and analysing macroeconomic trends. By combining these insights with a deep understanding of geopolitics and investment strategy, we are able to provide our clients with robust tailored research that helps them to mitigate risk and create opportunity at the international level. Through this, we help our clients to achieve their goal of long-term sustainable growth.
Essential Economics works with a broad range of international clients, including corporations, government departments, international organisations, family offices and long-term investment funds.
INVESTING IN WOMEN: WHAT WOMEN-LED BUSINESSES IN ITALY AND THE UK NEED
Essential Economics has recently concluded the Investing in Women project in collaboration with the University of Pavia, Queen Mary University of London and the British Embassy in Rome.
The Investing in Women project aimed to discover why Italy and the UK similarly trail behind the other advanced economies when it comes to women’s entrepreneurship. The project focused on funding because the gender gap in access to finance prejudices the establishment and growth opportunities of women-led businesses. When it comes to funding for entrepreneurs, there are significant differences between Italy and the UK. Indeed, the UK has the largest equity market in Europe, or the fourth largest in the world, while the equity market in Italy is in its infancy. In addition, the UK has a strong business and policy environment that fosters entrepreneurship while Italy lacks these things. However, in both countries, there are just five women entrepreneurs for every ten men compared to eight women entrepreneurs for every ten men in the US and Canada.
Looking for a further difference between Italy and the UK that could explain this, we posited whether the existence of gender quotas for the boards of listed companies in Italy could make a difference. Specifically, we asked whether banks with a better gender balance on their board act as agents of change in financing women entrepreneurs.
We ran into two interrelated problems that prevented us from being able to provide a full answer to this question. The first problem is the lack of gender disaggregated data from the banks on their loan clients. The second problem is that, as there is no internally standardised definition of women-led business, the very limited gender disaggregated data that is available is often not comparable, and cannot provide the basis for a legitimate cross-country analysis.
Ultimately, the project concluded that women entrepreneurs are discriminated against in accessing funding and that much more needs to be done to support women entrepreneurs. We recommend a three-pronged policy approach that pulls together action at the international level, the domestic level, and cross-organisation good practice.