Clare Beckton is the executive in Residence-CREWW at Carleton University; Andrew Irvine is head of customer solutions, Canadian personal and business banking with the Bank of Montreal; Janice McDonald is the president of The Beacon Agency.
Today, when we look at who starts and owns businesses, the world looks much different than it did 50 years ago.
Female-led enterprises now represent half of all new businesses, while just less than half of all small and medium-sized businesses are either entirely or partly owned by women. As well, female-led businesses, while tending to be smaller than male-led businesses, create more jobs and have higher survival rates when we compare them by their growth metrics.
But female-led businesses, even today, remain constrained by a number of key factors. Across the country, women express frustration with a lack of access to capital, ageism and sexism and harassment from investors and clients. As well, they deal with the reality that mainstream networks, incubators and accelerators often don't cater to female entrepreneurs and the industries in which they operate.
To help investigate these issues and find solutions, BMO, Carleton University and the Beacon Agency, with support from the Government of Canada, have come together to help solve this problem – to investigate what's happening with female entrepreneurs and the environment in which they seek to operate. What we found was a significant impediment to the success of these businesses – a lack of recognition of the innovative capabilities of these women.
Throughout our travels interviewing them, we were struck by the eagerness they showed in telling us their stories of resilience and pride in their contributions through their businesses. But we also experienced their frustration about the barriers they continue to face. They told us about the negative effects of these impediments, despite the fact that these exceptional business talents have been innovating – everywhere, every day, across the country.
A significant part of the issue relates to the fact that most businesses started by women are concentrated in the service sector; meanwhile, women are typically underrepresented in the science and technology sector.
This reality runs up against a marketplace where key participants still tend to define innovation in terms of technology and goods. The result is a situation where innovations that flow from other parts of the marketplace – innovations often created by women running service companies – are not seen in a similar, positive light.
The Organization for Economic Co-operation and Development has developed what we consider to be a more useful definition of innovation: "implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organizational method in business practices, workplace organization or external relations." Using this definition, we start to see these women in a new light – they are innovating in all sectors and in every aspect of their business. While we need to increase the number of female entrepreneurs in science and technology, it is important to recognize their contributions to Canada's innovation in all sectors and aspects of their businesses.
These findings represent an opportunity, particularly for governments and financial institutions. They must include and support women by developing inclusive innovation policies and programs that enable all innovation, no matter what sector, to be supported and recognized. To assist in this, women must be involved from design to implementation to ensure their perspectives and experiences shape the policy and programs to be inclusive to all.
For governments at all levels, that means encouraging the recognition of an inclusive innovation framework that brings to life the broad definition of the word. This would leverage the increasing growth and innovation of female entrepreneurs to Canada's advantage and recognize the value of innovations from sectors where female-owned businesses are operating.
For financial institutions, that means support for female-led businesses across a broad range – including bank services, lending and partnerships. BMO, as an example, has already made these efforts a significant part of its operations. For instance, the bank has incorporated skills training for front-line employees to educate them on the subtle differences in how women prefer to be engaged in their financial conversations. It has also identified and tracks metrics for female-owned businesses to assist in decision making, including customer, loan balance and deposit balance growth. As well, BMO sponsors GroYourBiz and Women Presidents' Organization – advisory groups that assist female entrepreneurs through different stages of their business.
But much more needs to be done. Across the industry, financial service providers need to engage in similar actions to ensure the sustainability of these enterprises. Training, partnerships and setting aside traditional assumptions about how businesses operate are vital in this effort.
We must all keep working to create the robust ecosystem that will ensure female entrepreneurs can thrive. The recommendations above embody much of what is required to achieve this; it's vital we move forward so that women can provide their full benefit to the Canadian economy.