Enabling more women to pursue entrepreneurship could only help Canada as the country engages in a trade war with the U.S., a recent report suggests.
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Enabling more women to pursue entrepreneurship could only help Canada as the country engages in a trade war with the U.S., a recent report suggests.
It’s an issue that’s particularly important since Canada is far behind its goal to double the number of women-owned businesses in the country by 2025, according to the report.
Canadian Chamber of Commerce senior research director Marwa Abdou recently released the report that examines the current landscape of women entrepreneurs and women-owned businesses in Canada and identifies the barriers that limit women’s “entrepreneurial potential.” Abdou said that includes structural biases, as well as difficulty accessing financing.
“The government had devoted a fund of almost $2 billion to establish the Women’s Entrepreneurship Strategy,” she said. “The target (in 2018) was to double the number of women-owned businesses by 2025. The shocker of all of this is that we’ve only managed to add a mere 25,000 majority women-owned businesses. That’s not even 15 per cent of the target they set.”
Abdou said roughly 710,000 women entrepreneurs are “missing” from the Canadian landscape, representing the number of women who are not involved in entrepreneurship, but could be.
As Canada navigates a trade war and searches for ways to diversify and boost the economy internally, Abdou said removing barriers that prevent marginalized groups from pursuing entrepreneurship could have significant impacts on the economy.
“In 2017, (Innovation, Science and Economic Development Canada) estimated that closing the persistent entrepreneurship gender gap would mean an increase of GDP of six per cent or more,” she said. “The (Organization for Economic Co-operation and Development) has that estimate between six to 12 per cent.
“It’s a massive loss of economic potential when we actually put that in dollar values. We missed out on generating, at a minimum, $150 billion. And that’s just over a six-year period.”
She added that those estimates don’t account for other economic activities such as trade.
“Even if you’re not someone who’s invested in parity or equity as a value, we’re at a time where Canada can’t afford to leave economic potential behind,” said Abdou. “We have already maxed out traditional pathways to growth. We need to be a little bit more bold in terms of the diverse resources Canada has to offer and that includes human power and human potential.”
When it comes to why Canada has fallen so far behind its targets, Abdou said the issue is that money alone isn’t enough – the focus needs to be on addressing root causes.
For women-owned businesses to increase their contributions during something like a trade war, Abdou said governments need to take another look at what’s holding women back.
“The data suggests women have as much propensity to export and can bring a creativity, productivity and innovation to Canada’s trade in a way other leadership groups can’t,” she said. “We have a myriad of programs that are devoted to supporting women entrepreneurs, but we’re not actually tackling things like issues accessing financing, tax policies that continue to prohibit them.”
She continued, “When we talk about free barriers, we know from the research that women-owned businesses face disproportionately more logistical, more border, more administrative barriers than majority male-owned businesses.”
The numbers differ by sector. For example, women are significantly under-represented in high-growth industries like construction, mining and tech, owning less than 10 per cent of businesses. Meanwhile, 60 per cent of majority women-owned businesses are concentrated in health, professional services and retail trade.
“Those are the industries that traditionally women have been boxed into,” said Abdou. “It tells us that we haven’t moved away from those entrenched ideologies of where women belong and where they can contribute.”
Abdou said Canada needs to double down, not just on devoting dollars to women entrepreneurs, but investing in upskilling programs and educational opportunities.
She said that’s particularly important as the country looks inwards to compete with the U.S.
“As we think about what the economy is going to need moving forward, technological advancement is far outpacing our ability to keep up,” she said. “It means we need to equip our work- and labour-force with the right skills and it means we need to think about the social infrastructure we are providing for women to thrive and succeed in the workplace.”
