By Prabha Mitchell
A concept that needs more attention in Saskatchewan is: How women entrepreneurs can generate significant economic growth in the province.
It is an exciting time in Saskatchewan. Both the Saskatchewan Party and the New Democratic Party are in the middle of heated leadership campaigns. Come the spring sitting of Saskatchewan’s Legislative Assembly, there will be a new premier and leader of the Official Opposition.
There is a wealth of debate and discussion on many policy platforms, and initiatives amongst the candidates to ensure Saskatchewan remains strong into the future.
A great deal has been heard about how best to approach economic growth, fiscal policy, health care, even legalized marijuana. There is one concept, however, that needs more attention: How, under the right conditions, women entrepreneurs can generate significant economic growth in Saskatchewan.
Women Entrepreneurs Saskatchewan (WESK) wants to ensure that all Saskatchewan entrepreneurs have an equal opportunity to achieve success and contribute to the province’s economic development, employment, innovation, and equality.
In Saskatchewan, small business is BIG business — as small businesses account for almost 99 per cent of all business enterprises. In this province (and nationally), women own more than one-third of all small businesses.
Canadian women-owned businesses contribute $148 billion to the national economy, account for the fastest-growing segment of the small business sector, and outpace men when it comes to starting businesses.
While it is all positive news, there is a catch. Nearly two-thirds of women-owned small businesses are in industries characterized by slower growth and lower profitability. This discrepancy in representation in the entrepreneurship landscape is known as the Gender Entrepreneurship Gap. WESK believes the gap should be narrowed, if not closed entirely.
According to Closing the Gender Gap, a 2016 article in Municipal World, of all women-owned businesses, those that earn revenues between $100,000 and $1 million often grow the slowest. Comparatively, businesses owned by men are more than 3.5 times more likely to reach $1 million in revenue, according to a 2014 article in Women’s Entrepreneurship in B.C. and Canada. This disparity has created an economic gender gap.
Additionally, while women entrepreneurs are starting businesses faster and express growth intentions to the same extent or greater than their male counterparts, the reality is that their businesses are simply not growing to the same scale.
The segment of women-owned businesses with revenues between $100,000 and $1 million represents the greatest potential for economic growth.
A 2011 report from the Canadian Taskforce for Women’s Business Growth Action Strategies to Support Women’s Enterprise Development estimates that a 20-per-cent increase in total revenues of women-owned businesses would add $2 billion to the Canadian economy every year. Similarly, a 2013 RBC Economics article, Female Entrepreneurs Remain a Relatively Untapped Resource for Economic Growth, estimates that over the next decade, a 10-per-cent increase in the number of women-owned firms could result in an economic gain of $15 billion.
Accessing capital is the biggest barrier women entrepreneurs face — rejection rates for lending are significantly higher for female owners (66 per cent vs. 35 per cent for men). In 2013, men borrowed nearly 500 per cent more money than women. Other barriers include a lack of skills, knowledge and experience; not enough access to mentors; and women serving disproportionately as caretakers and having to square business growth decisions with family and personal responsibilities.
National and international studies have shown time and again that gender-based initiatives yield tremendous results and address many of the barriers faced by women entrepreneurs.
That is why WESK is calling for the creation of an Advisory Council to examine the economic gender gap in Saskatchewan. The provincial government needs to develop a Saskatchewan Economic Development Strategy for Women in Business that addresses barriers to growth and invests in strategic initiatives that help women entrepreneurs grow their businesses.
Closing the economic gender gap does not just benefit women and girls, it will also enhance the economic productivity of Saskatchewan as a whole and make policies and institutions more representative.
All candidates in both leadership races are encouraged to consider both of WESK’s recommendations. When women succeed in business, everyone benefits and Saskatchewan will be stronger as a result.
Prabha Mitchell, CEO, WESK