Number of female executives in German SMEs falls again

Source: Xinhua | 2018-08-22

The number of female executives at the helm of so-called "Mittelstand" in Germany has declined once again, a study published on Tuesday by the state-owned KfW banking group finds.

The term "Mittelstand" is traditionally used in Germany to denote small- and mid-sized enterprises (SMEs), but also has qualitative connotations such as family-ownership, long-term focus, social responsibility and strong regional ties. The sector is often considered to constitute the backbone of the export-oriented German economy.

According to the KfW researchers, only 16.4 percent of chief executive officers (CEO) in such SMEs were female in 2016. The figure marked a decline of three percentage points compared to the current record year of 2013 (19.4 percent) and meant that women were only in charge at around 608,000 out of Germany's total of 3.71 million SMEs.

The study authors highlighted that the disappointing trend mirrored a fall in the share of female company founders from 43 percent in 2013 to 37 percent in 2017. The study attributed this circumstance to the effect of Germany's booming labor market on the female workforce. More women were currently disincentivized to become self-employed due to the availability of regular and more stable jobs as employees.

The KfW Study noted, however, that the data compiled showcased divergent trends for the number of female executives depending on the size and type of SME. In the category of so-called "smallest companies" with less than five full-time employees, the share of women in leading positions fell from 20.7 percent in 2013 to 17 percent in 2016. By contrast, the rate grew from 10.4 percent in 2013 to 11.5 percent in 2016 for larger companies with between 10 and 49 full-time employees.

In spite of the slight increase in female executives at larger SMEs, women were structurally still far more likely to run businesses in the "smallest companies" category. As a consequence, female-led SMEs accounted for a disproportionately low 10 percent of total employees in the sector, eight percent of investment and seven percent of gross revenue.

"The declining figures of female-led Mittelstand companies is worrying", Joerg Zeuner, KfW chief economist commented on the findings on Tuesday. He added that the Germany economy needed well-educated women in senior positions "more than ever" given the country's shrinking population and scarcity of skilled labor.