Despite making up nearly half the workforce, women continue to be underrepresented in entrepreneurship, both among those identifying as self employed, and as owners of small and medium sized enterprises, says a new report released Tuesday by TD Economics.
The Covid-19 pandemic has proven to be a setback to women’s increased representation among the self employed. But, there is reason for optimism. We are still in the early days of the recovery from the pandemic and it is likely that as the hardest hit sectors of the economy continue to rebuilt, the pre-pandemic trend of women gaining ground in self employment will reassert itself,” said the report.
“The share of women owned SMEs seems to be a tougher nut to crack, although the fact that there was a slight increase even in the difficult pandemic year is perhaps cause for some cautious optimism. There is clearly room for improvement when it comes to changing perceptions of younger women towards entrepreneurship to increase that potential pipeline earlier on.”
TD said 37.3 per cent of self-employed workers are women in Canada.
“Since TD Economics’ last report on women’s entrepreneurship in 2015, self-employment had continued to rise among women, although declined among men. The pandemic brought this trend to a halt. Self-employment among men recovered quickly since the onset of the pandemic, but less so for women, thus far. This has resulted in the gains women had made in self-employment flatlining in recent years,” added TD.
“There are likely a variety of reasons overall self-employment declined through the pandemic. It could be that public policy favoured large or medium enterprises during the pandemic, or larger businesses had more resources to cope with the prolonged disruptions and extra costs. At the same time, the conditions for eligibility for emergency loan programs raised an additional barrier for small businesses that could have proven difficult to overcome. Pandemic-related shifts in standard paid-employment towards greater flexibility, given hybrid and online work environments, may have also made working as a traditional employee more attractive for self-employed Canadians and they opted to switch.
“Why self employment fell more for women is likely due to a combination of factors. Women entrepreneurs disproportionately work in the hard-hit services sector. Women owned SMEs tend to be smaller than their male counterparts and may not have had the resources to weather the relentless open-shut nature of the pandemic and re-opening. With women still shouldering the bulk of childcare duties, the pandemic closures of schools and daycares likely proved an insurmountable challenge for many self-employed women with younger children. Many of whom likely had to stop their work to manage full-time childcare or virtual schooling.
“However, it does not seem to be due to a lack of access to government assistance programs. Women-owned business appear to have been approved for various assistance programs at similar rates to their male counterparts. We also know that women-owned businesses took a larger hit from the pandemic. The 2020 Survey of Small and Medium Sized Enterprises reported that nearly half (46.5 per cent) of women-owned SMEs had temporary closures due to the Covid-19 pandemic, compared to a third of all SMEs. Canadian women entrepreneurs laid off a disproportionately larger number of employees during the pandemic : 62 per cent of female-owned business laid off 80 per cent or more of their employees, compared to 45 per cent of SMEs overall.”
(Mario Toneguzzi is a veteran of the media industry for more than 40 years and named in 2021 a Top Ten Business Journalist in the world and only Canadian)
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