Supporting Women Entrepreneurs Is Critical to Innovation, Growth and Sustainability

The Diversity Institute is empowering women entrepreneurs and driving economic growth and sustainability this International Women’s Day!

This year the Government of Canada’s theme for International Women’s Day (IWD) 2024 is Invest in women: Accelerate progress. It reminds us to double down on our investment in women entrepreneurs. Small- and medium-sized enterprises (SMES) are the backbone of our economy and women are playing an increasingly important role — now accounting for almost 20 per cent of business owners. Our economic, innovation, and training strategies need to focus on SMES because they account for 90 per cent of private sector employment in Canada compared to only 50 percent in the USA. We need to invest in startups but also help them to scale up. Women-owned businesses contribute to growth and innovation — closing the gender gap in entrepreneurship could boost GDP by up to $150 million — but they also drive our transition to net zero and our commitments to sustainable development goals.

Canada already has a first-in-the-world $7-billion Women Entrepreneurship Strategy which is increasing investments, building the ecosystem and prioritizing data driven approaches. It also offers a whole of government approach leveraging policies, procurement and programs across all departments to support women entrepreneurs.

But we need to ensure that the entire innovation and entrepreneurship ecosystem doesn’t present barriers to ventures led by women and other equity-deserving groups.

Culture and stereotypes play a powerful role — when people think of entrepreneurs they often think of men and tech. Because women entrepreneurs are less likely to be in tech and more likely to be in services and because they have smaller and under-financed businesses, they are often not considered in the design of programs and policies.

More than half of businesses in Canada start with less than $5000 but getting $5000 remains a massive challenge. Innovative programs have demonstrated that new approaches to assessing risk and financing women entrepreneurs can result in higher returns and lower default rates. However, women tend to get the short shrift: identical pitches by men and women produce radically different results. Programs targeting women often have much higher interest rates (10 per cent or more) because they are encumbered by traditional approaches to assessing risk. Despite the growing number of programs offered for women by financial institutions, angel investors and venture capitalists, we need better data. In the UK, the Investing in Women Code encourages setting targets and transparency which can help nudge even large institutions towards fairer practices.

We need to rethink many of the fundamentals. Innovation is not just about technology — it’s actually about doing differently. Canada desperately needs entrepreneurs who build technology, but even more, we need entrepreneurs who can drive changes in the adoption of new products, services, and processes. We need people who can shape organizational and human behaviour whether in ICT or green tech. When we think more broadly about economic development, innovation, and sustainability the critical importance of women entrepreneurs becomes clearer. It's important to celebrate their achievements across sectors — to shape aspirations and normalize women entrepreneurship — because if you can see it, you can be it.