Female-run SMEs an untapped resource, report says

A new RBC Economics report says while female-run businesses are growing in numbers across Canada, increasing female representation would provide a meaningful boost to the country’s economy.

Released Thursday, the report said the share of female-run small- and medium-sized firms grew to 15.6 per cent in 2011 from 14.9 per cent in 2007 and 13.7 per cent in 2004.

However, the report, Canadian Women Grabbing the Baton, said the prevailing ratio of female-to-male majority-owned firms suggests the gap could be further narrowed.

“Female entrepreneurs have been steadily contributing more and more to this level of growth; however, there remains a tremendous untapped opportunity for female majority-owned (small-medium enterprises) to have an even deeper impact in terms of contributing to economic growth,” said Laura Cooper, economist with RBC.

In 2011, the aggregate contribution of female majority-owned SMEs was an estimated $148 billion in economic activity, said the report, which projects a 10 per cent rise in the number of female majority-owned firms over the next decade would boost the economic contribution to $198 billion.

“Women are beginning to increase their footprint in this arena and there is much more we are going to accomplish,” said Debra Ross, president of Gamma-Tech Inspection Ltd. in Calgary.

“Historically as a gender, we have reluctantly avoided seeking higher level positions in business for a myriad of reasons. ... These barriers have blinded women from realizing the potential opportunities available to us.”

The RBC report said a larger proportion of Canada’s population is reaching retirement age, a trend echoed in the ownership of smalland medium-sized businesses.

For female majority-owned firms, the share of those over the age of 65 has nearly doubled in the past four years, which in part reflects a rising female participation rate in the 65 plus age bracket.

At the same time, however, younger female entrepreneurs are not balancing out the aging ownership trend, with females under 40 running a lower share of businesses, RCB said.

Cooper said the growth of the female labour force during the past 30 years contributed $130 billion to economic activity in 2012, equivalent to seven per cent of GDP.”

“There is a clear opportunity for women to not only act as a supplemental source for SME growth, but to also provide a further boost to Canada’s overall economy,” she said. “There should be an emphasis on encouraging women, and younger women in particular, to pursue the entrepreneurial opportunities that are of interest to them.”

A further narrowing and eventual elimination of the gap between female and male labour force participation rates over the next 20 years would result in a four per cent boost to GDP by 2032, said RBC.

“The point is, women will need to pursue their passion and then take action to get there,” said Calgary’s Ross.