The COVID-19 pandemic has cast a dark shadow in many places, with women in particular suffering a hard hit.
A recent RBC Economics report found that women’s participation in the Canadian workforce dipped to 55% in April this year, for the first time since the mid-’80s.
The decline was due to more than job losses as many women had to step away from the workforce to focus on their children, or to take on the role of primary caregiver for a family member.
Women-led small- and medium-sized enterprises, which represent over $117 billion per annum of economic activity in Canada were no exception. A staggering 61% of female business founders have lost contracts, customers, and clients due to COVID, according to a new report from the Ontario Chamber of Commerce.
While COVID may have accentuated the problem, female entrepreneurs have been at a distinct disadvantage for decades due to poorer access to venture capital. They raise just 4% of VC funding despite representing 28% of entrepreneurs.
“The physical structure of entrepreneurship is really built around male businesses and male thinking – for years we’ve tried to fit women’s businesses into that paradigm. And it doesn’t fit if we really want women to succeed. And especially women of color or immigrants or entrepreneurs that don’t fit that general stereotype of what an entrepreneur looks like,” said Nita Tandon, Founder and CEO of Dalcini Incorporated, an award-winning brand of durable, chemical-free and eco-friendly stainless steel housewares. Tandon joined us for the latest episode of the RBC Disruptors podcast to discuss how female entrepreneurs will be critical in helping lead the economic recovery.
A significant number of women may either be out of work or underemployed going into 2021. Fewer jobs means more women will need to create their own opportunities. Because women have different perspectives, skills and experiences, they tend to solve problems in different and innovative ways. As the OCC report found, closing the gender gap in entrepreneurship alone could add up to $81 billion to Canada’s GDP.
So how can we open more doors for female entrepreneurs to help the economy recover?
Vicki Saunders, Founder and CEO of SheEO, a global community of female investors supporting women-led ventures, has created an ecosystem-based, hybrid investment model that she believes could support women-led businesses for decades to come. The investors, called “activators,” each contribute $1,100, and have already produced a pool of $2 million to support women-led businesses. The founders are selected by the group and given interest-free loans, repayable after five years, and peer-to peer support to help them advance their enterprises. All of SheEO’s 67 Canadian ventures have repaid these loans in full. The funds are then reinvested in other businesses.
“So that money just keeps flowing forward and will leave a legacy on the planet. Our goal is to get to a million women and a billion dollar fund, which will fund 10,000 women entrepreneurs around the world every year,” said Saunders.
The combination of financing, advice, financial literacy training, access to export markets, mentorship and professional networks is powerful in helping to propel small businesses to succeed.
For entrepreneur Chenny Xia, it’s about creating new collaboration pathways, sharing datasets to assist with problem identification, and helping women – especially those who are less socially and economically privileged – access organizations, partnerships and funding.
“Let’s help them be able to think that entrepreneurship is a viable career pathway.”
Xia is the Founder of Gotcare, a healthcare platform that provides personalized home care to Canadians, empowering them to select their care worker and set the care schedule.
Coming out of the pandemic, entrepreneurs will need increased supports, and that should include supporting women and other disadvantaged groups through the entrepreneurial ecosystem. When women-owned businesses succeed, it can spark innovation, create jobs, build wealth and help the economy.
“You need to have someone in your corner that understands you, that understands your business model, that understands your struggle points,” said Tandon.
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