Categories
Activism & Action

$5.5 Billion Investment Required To Prevent Collapse of Emerging Women’s Entrepreneurship Sector

woman standing against a wrecking ball
Photo by Federico Caputo / Alamy Stock Photo

Monday, April 12: The Canadian Women’s Chamber of Commerce (CanWCC) released an emergency task force report calling for $5.5 billion to support women entrepreneurs — a sector disproportionately impacted by COVID-19.

“Let’s get real about this: women-owned and -led businesses are integral to Canada’s economic recovery,” says Nancy Wilson, CanWCC’s founder and CEO. “Forget leaning in — we need support to lean on as we start and scale our businesses.”

The independent task force calls for $5.5 billion in renewed funding in the 2021 federal budget for the Women’s Entrepreneurship Strategy; $500 million in recovery funding targeting Black, Indigenous, racialized and mature (over 40) women entrepreneurs; and the expansion of the Canada Recovery Benefit program for self-employed and startup founders left without basic income because of the pandemic.

The task force also recommends creating an inter-ministerial committee to better address the needs of all women in the economy and break down silos that currently exist between the Ministry for Women and The Gender Economy (WAGE); Industry Canada/Innovation, Science and Economic Development (ISED); Ministry of Small Business, Export Promotion and International Trade; and the Ministry of Finance.

The report, supported by leaders in the women’s entrepreneurship ecosystem, was developed as a response to lack of inclusion in the “Task for on Women in the Economy” and the cross-ministry feminist pandemic recovery budget process, as well as deepening concerns that the federal government “still doesn’t get” women entrepreneurs.

Who are Women Entrepreneurs?

The newly released State of Women’s Entrepreneurship in Canada (March 21) report by Ryerson’s Diversity Institute paints a clear picture of the women’s entrepreneurship ecosystem and the lives of its precarious income-based participants.   

In a nutshell, the sector’s enterprises are like a million atoms that are intricately networked. In some provinces, long established women’s enterprise institutions act as supportive lenders, skills educators and data gatherers for policy makers. Some find affinity in publicly funded incubators and accelerators. But the majority of women entrepreneurs are left to resource themselves. They have created more than 180+ unfunded, regional, grassroots, mutual-aid support networks.  

Women entrepreneurs tend to build businesses in care-economy sectors and operate them in relational, innovative, inclusive, generative ways that aim to lift up their communities — not just themselves. Their enterprises may be micro when measured in dollars, but powerhouses when full and indirect impact is considered.

On average, a woman entrepreneur, once established, earns $68,000 gross per year. Their male counterparts earn 58 per cent more — a truly cringe-worthy pay gap.

Only 15.6 per cent (114,000) of all small to medium incorporated enterprises in Canada are majority owned by women; more than 92 per cent of these enterprises are defined as “micro-firms” with less than 20 employees. Another 37.4 per cent (1 million+) of women entrepreneurs are self-employed.  

Though small, this sector can have financial clout. According to a 2017 McKinsey study, an investment in women entrepreneurs could result in up to $150 billion (or about 31 times what the task force calls for) in economic growth for the Canadian economy. The report noted that “This projected increase was 6 per cent higher than business-as-usual GDP growth forecasts over the next decade. Put another way, this figure is equivalent to adding a new financial services sector to the economy.”

Eager to boost this potential, the government invested $5 billion in a Women’s Entrepreneurship Strategy (WES) program in 2019. According to task force participants, this investment has had tremendous impact. However, those gains are in danger of being completely lost — not just set back — due to the pandemic’s disproportionate, multi-layered impact on all women.

Since COVID-19, more than a quarter of all women-owned firms laid off 80 per cent or more of their contractors, freelancers, employees.

Paulina Cameron, serial entrepreneur and now CEO of The Forum, a women’s enterprise support charity in Vancouver, says she is frustrated. 

“Government supports are still built around our understanding of the way men built companies in the 1990’s. The hard line between for profit, public and nonprofit policy no longer makes sense. Women entrepreneurs increasingly design enterprises that ignore these boundaries. We learned this past year that women entrepreneurs play a significant yet unseen role building social well-being and economic resilience — we are going to need a whole lot more of that in the coming decade.” 

Janice Bartley, Founder of Foodpreneur Lab

Why Were Women Entrepreneurs Left Out of Covid Relief?

Most small to medium enterprises (SME) COVID-19 relief programs focused on larger firms, which excluded the vast majority of women entrepreneurs.  Like women wage earners, women entrepreneurs were also crushed by shouldering the majority of unpaid care and home-schooling work during the pandemic.

According to a recent study on Black and Indigenous women entrepreneurs, 78 per cent face barriers to accessing financing in addition to racialized oppression by institutions including banks, incubator and accelerator programs.

Janice Bartley, a Black woman, serial entrepreneur and founder of Foodpreneur Lab,  took on side gigs to pay bills for the past two years, even though her enterprise was on the verge of providing her with an income. 

Then COVID-19 hit.

“We were in the process of negotiating some significant contracts including a college — which would have really helped us launch — but because of COVID-19, they fell through.”

Like many, Bartley’s enterprise was not big enough to benefit from small business COVID-19 support initiatives. Most of the loan programs are beyond reach for founders who don’t have net worth (say in home ownership) to fulfil the personal guarantee requirements.

“I think any founder knows that there’s going to be financial risk involved in starting and growing a business,” says Bartley. “And I think there’s a willingness for us to do that, as long as there’s some supports to help survive things like a pandemic.” 

two quotes, two women, purple background

Women Entrepreneurs Are a Good Bet — So Why So Little Money on the Table?

Preliminary research shows incredible returns on investments, says Wendy Cukier, Director of Ryerson’s Diversity Institute, “even in loan programs targeting women, whether measuring job creation or social impact.” She notes that the “WES initiative has strengthened the women’s entrepreneurship ecosystem and we are starting to see the results. However, if we allow these initiatives to wither and new seedling businesses to die, we should not be surprised to see negative economic and social consequences.”

So why are women entrepreneurs often overlooked by mainstream programs and financing? Cukier says it’s often because of how “innovation and entrepreneurship are framed.”

The CanWCC independent task force has put forward compelling evidence that a $5.5 billion investment in women’s entrepreneurship would go a long way to ensuring momentum gained in the past few years is not forever lost. 


Publishers Note: pk mutch, contributor and LiisBeth publisher is a board member at the Canadian Women’s Chamber of Commerce (CanWCC) and transparently supports their vision, mission and mandate. Mutch was also a task force member. 

Resources/Sources:

Download the full CanWCC report here

Access the State of Women’s Entrepreneurship 2020 report here. 

Read the Feminist Recovery Plan for Canada here. 

Related Readings

Categories
Our Voices

A Feminist Entrepreneur’s To Do List

Photo by Jetta Productions via Stocksy

 

With the new year and a vaccine on the horizon, many entrepreneurs are crawling from the wreckage known as 2020, dusting off, and thinking, what next?

In the past, mainstream entrepreneurship has focused on opportunity and extraction: find a market gap or problem, figure out how to exploit it, and then work to extract as much wealth and power for yourself and investors as possible. Meanwhile, social entrepreneurs sought to find the harm caused by Big C Capitalist pursuits; figure out how to fix the mess; then set to work abiding by capitalist light rules.

Neither one of these models make sense for the ground that has shifted beneath our feet this past year and for what’s coming next. The very purpose of entrepreneurship, attendant policies, and the way we do business must undergo a profound revolution.

So, in addition to all the things we normally think about—launching,  pivoting, downsizing, upsizing, going digital, managing growth (some enterprises are thriving!), getting through the next lockdown, making payroll—there is this to consider: how to build a truly accountable enterprise that models an inclusive, restorative, and generative future versus perpetuating the rapacious systems, standing behind decorative diversity mission statements and operating with the fear-based mindset of the now.

Of course, no one knows the answer to that big question, but here are some things to kickstart the process of getting there:

  1. Stop perpetuating systemic oppression: Take a hard look at your culture, policies, pay scales, processes and practices. Centre the word ‘care,’ and start rooting out anything that enables oppression—whether racism, anti-black racism, white supremacy, colonialism. Let’s turn the page on the way we lead, communicate, operate, and design products and services.
  2. Advance critical consciousness: Do action work. Participate in and encourage difficult, uncomfortable conversations that lead to personal growth, political awareness, and systems thinking mindsets for staff, customers and suppliers. Everyone, not just the founder, must evolve and reckon with internalized oppression as well as external. We learn best in community with others. Seek out expertise and communities that facilitate growth and help sustain them in return.
  3. Take stock of whose work and ideas you amplify: What stories do you tell on your company blog? Whose ideas do you advance on social media? What art do you hang on your workspace walls? Looking at who and what you focus on can also tell you who and what you’re not supporting—and should.
  4. Re-write your procurement policy: Make a commitment to sign up to WEP and direct 30 per cent or more of your procurement spend to enterprises owned by women, BIPOC, trans or gender-expansive folk. These directories can help you find the services or products you need:  Black, Women’s or LGBTQ Chamber of Commerce, The Native Women’s Association, Immigrant Women in Business, Feminist Founders, WEKH Ask and Give app, WeConnect and Femmbought—to name just a few. Follow our stories about services offered by feminist founders on www.liisbeth.com and in our newsletter. We have profiled over 183 feminist identified, progressive enterprises that are all looking for customers and a shot at new generative collaborations.
  5. Get Political and connect with other aligned social movements: Social change is collective work—not hero work. And the best and freshest thinking today is generated by BIPOC, women-led, grassroots, activist groups, not large, corporatized institutions. Engage with BLMCda, BLM USA, the LEAP, DIEM25, Pace e Bene, Salmon Nation, and other generative movements that embrace social justice, feminism, and environmentalism. Sign up for their newsletters. Donate. Invite their speakers to talk to your stakeholder group. Invite an activist to sit on your advisory or fiduciary board.  Answer their calls to action. It has to be a give and take.
  6. Diversify your media spend and attention: Spend at least 50 per cent of your annual media budget on indie outlets to diversify your listening power. Consider indie outlets such as rabble.ca, APTN (Indigenous) Yes Magazine, Herizons, Peeps Magazine and, of course, LiisBeth.com
  7. Ask who’s in the room? Who’s not? And consider why? Over 54 per cent of all businesses in Canada have one to four employees (considered micro companies by StatsCan) often including the founder and co-founder.  This presents an obvious challenge when it comes to advancing inclusion: your company may just be a close-knit founding team of three cis-het white women with no plan or money to hire. And that’s OK. But there are countless ways micro companies like this can engage with the 30 per cent of the Canadian population that is BIPOC identified. Make that engagement a priority as it will inform and strengthen your work. Need advice? Join the Feminist Enterprise Commons community (FEC).
  8. Trailblaze like a trailblazer: Like Bloom + Brilliance, a women-owned website and branding company, be transparent about your intersectional feminist values on your business website. Integrate the use of pronouns in your staff directory and website. Radically change your bylaws to strengthen accountability. Consider implementing a barter pay system in addition to trading in cash (because a lot of folks will have a lot less of it next year).

As brutal as the year was, 2020 delivered a gift: it has unveiled what needs fixing in ways that not even mainstream folks can continue to ignore.  We cannot turn away from it or all the suffering will have been for nothing, all the pain and carnage will continue. I suggest we heed the words of Audre Lorde: It is time for us all to be “deliberate and afraid of nothing.”

Related Reading