The time is now for women to break through as business leaders as their potential contribution the Canadian economy is significant. Royal Bank of Canada estimated that by 2011, female small- and medium-sized businesses have already contributed $148-billion in economic activity. If this number increased by just 10 per cent, a staggering $198-billion would be added to the economy over the next decade.
The issue and the opportunities are huge and that's why I've partnered with Dell to develop the Global Women Entrepreneur Leaders Scorecard, an annual study that assesses countries most conducive to female entrepreneurial success. Canada is one of 31 countries our study is examining in 2015.
Canada is an emerging hot spot for female entrepreneurs
Cecause of its family-friendly policies and investment in women, Canada is an emerging hot spot for female entrepreneurs. In March, the Business Development Bank of Canada announced $700-million in earmarked funding to finance women-owned businesses. This funding builds on the over $153-million in funding provided by the Status of Women Canada to support more than 750 projects since 2007. Of this amount, over $12-million has been for projects which address women's entrepreneurship.
Generally, women in Canada are educated, with more females earning college degrees than men, and they're well-connected to others in the business world.
And there are several success stories supporting women in business in the nation. Saskatchewan became the first province in Canada to allow startups and small businesses to raise capital through equity crowdfunding. It enables startups to use crowdfunding to sell securities such as shares, limited partnership units and promissory notes to residents of the province and unaccredited investors. This has helped businesses cut through government regulations to get the capital they need.
Women still challenged with capital, visible role models
On the downside, women are less likely to receive access to capital and their business revenues are low. We estimate that less than 2 per cent of women-owned businesses break the $1-billion mark based on the EY's 2011 report, "Force Multipliers."
Our study also shows that female leadership isn't strong in Canada either. Of the 47 per cent of women who make up Canada's workforce, only 3 per cent are CEOs. The 2013 Catalyst Census on Women Board Directors finds that less than 16 per cent of women are in executive board seats, and 40 per cent of companies have no women at all on their boards. In addition, women own only 16 per cent of Canada's small to medium-size enterprises according to a 2012 report by TD Economics.
The supportive environment just isn't there for women on boards which is a missed opportunity. Our research shows that when we have women on boards, there is a higher likelihood that there will be women in the executive suite and CEOs, and their salaries tend to increase in those companies.
Canadian women also face a confidence gap when it comes to starting businesses. According to a recent study, 46 per cent of women feel that women are portrayed in stereotypical ways and do not believe they have adequate business skills.
Move from awareness to action
At this moment, awareness is not enough. Canada must take action to realize the potential of high impact female entrepreneurs.
The Canadian government must set more precedents to encourage women in business. In 2012, Canadian government procurement made up 14 per cent of GDP as reported by the European Union's Trade Commission. Creating incentives for women-owned businesses to apply and win government contracts would open up new avenues for women to start and grow their businesses.
In the private sector, companies should diversify their C-suites and boards. This increases the visibility of female leaders and greater acceptance of women in business.
And the media's role is just as important. Journalists should be conscious of how they're portraying women. Put more women on the cover of business magazines and help shine a light on their progress.
These are just three changes that could help women get ahead. The truth is, there's no silver bullet to transform the business environment for women. Canada must take a holistic approach to reach the potential of women entrepreneurs. We can't afford not to.
Ruta Aidis is the project director for Global Women Entrepreneur Leaders Scorecard at Dell and a research fellow at George Mason University The final results of the Global Women Entrepreneur Leaders Scorecard, including Canada's ranking, will be announced at the Dell Women's Entrepreneur Network Summit in Berlin on June 29, 2015.