Scaling women businesses can add $100bn to economy: Study

A new national study found that while women are starting businesses in record numbers, they soon reach a "scaling cliff" as very few grow into larger entities.

The Gender Index Australia study noted a central gap in which women lead 42.2% of the nation's sole trader businesses, but just 15.2% of Australia's incorporated companies.

"The gap widens at every stage of business growth," the study found.

"Women lead 15.8% of Australia's micro companies, 13.3% of small companies, 8.1% of medium companies and 7% of large companies. Male led businesses convert from a small business into a medium one at a rate of 13.7% a year. Female led businesses convert at 6.7%, under half that rate."

It identified access to capital, contracts and networks as the structural conditions shaping the gap, separate from the performance of the businesses themselves.

Modelling in the report estimated closing the gap would support approximately 745,000 additional jobs and add more than $100 billion a year in combined wages and government tax revenue to the Australian economy, made up of $79.4 billion in additional wages and $24.4 billion in additional government tax revenue.

The Gender Index Australia chair Tamara Bryden said closing the gap is a productivity strategy, a jobs strategy, and one of the more significant economic opportunities available to Australia.

"The Gender Index Australia reveals a progression problem. Too many founders are hitting a ceiling on capital, networks and customer access at precisely the point they should be accelerating," Bryden said.

"For the first time, we have a clear picture of where women are progressing in business and where they're being left behind. The opportunity now is bringing government, industry, investors and financial institutions together to remove those barriers."

Queensland led the nation on both measures, with 45.1% of the state's sole traders and 16.3% of its companies are women led, the highest results in the country on each measure.

The report also found female led companies that reach scale match the productivity of male led companies, and in some cases exceed it.