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Women and Work in BC Series: Women's Entrepreneurship and Self-Employment

This is the fifth in a series of blogs highlighting the economic imperative of addressing gender equity issues across the full spectrum of market domains and organizational settings. The data are derived from a multi-year research project, which we will publish in April 2018. Update: The report, Women and Work: An Analysis of the Changing British Columbia Labour Market is available here. 

Blog 1:  Why the Gender Gap Matters
Blog 2:  Who's In, Who's Out?  The Participation Rate
Blog 3:  The Part-Time Difference
Blog 4:  Ms. Opportunity:  The Link Between Education, Child Care, and Missed Opportunity
Blog 5:  Women's Entrepreneurship and Self-Employment 
Blog 6:  The Rise of the Older Working Woman 

 

Blog 5:  Women's Entrepreneurship and Self-Employment

By Denise Mullen and Kristine St-Laurent

As noted in The Part Time Difference , the broadly-defined services sector is on the rise.  In 2016, four out of every five jobs were in service industries.  Women are more likely to work in these industries, and in 2016 they represented 54% of the services sector workforce, while only making up a quarter of the goods sector workforce. 

Small businesses[1] (defined by the BC government as self-employed people and businesses with between 1 to 49 paid employees) comprise ~98% of all businesses in the province. The numbers of self-employed with no paid staff versus small businesses with employees are roughly equal.[2] Women represent 38% of the self-employed in British Columbia.

In BC, small businesses – including the self-employed -- account for ~54% of all private sector employment and contribute about 34% of GDP — higher than the Canadian average of 31% of GDP contributed by businesses with 1 to 49 employees.[3] When adding in those BC businesses with 50-99 employees, altogether they support 75% of private sector employment, 5 points higher than the national figure.[4]

Although women own businesses in every sector of the economy, it is not surprising to see a higher concentration of ownership in the service sector, given female dominance of the services workforce.  However, women are also making headway as business owners in professional, scientific and technical services, information management, health care, and several other industries. As the population ages, this may foster new business opportunities in health and social services – other female-dominated sectors.  There is plenty of potential for women to expand their role as business owners within sectors where they already stand tall, but also to increase their presence in non-traditional areas — especially given the large numbers of women graduating from post-secondary education programs in business, the professions, and STEM disciplines (science, technology, engineering and mathematics).

    Table 1:  Canada Business Ownership by Gender and Industries, 2014 (latest data)
Industries Majority Female Equal Partnership Majority Male
Agriculture/Primary 6.2%  32.6%  61.3%
Construction 5.1%  16.9%  78.0%
Manufacturing  8.8%  20.1%  71.2%
Wholesale trade  8.8%  17.3%  73.9%
Retail trade  22.1%  22.7%  55.2%
Transportation and warehousing  8.0%  20.7%  71.2%
Professional, scientific and technical services  15.8%  14.8%  69.4%
Accommodation and food services  21.4%  26.2%  52.5%
Other services  23.0%  17.4%  59.7%
Information, waste management,
health care and recreation
 24.1%  16.8%  59.1%

Note:  There are no available statistics for majority female-owned small businesses in BC, but the logical conclusion is that the same pattern of national ownership is likely similar provincially.

Source:  Industry Canada.

While research shows that businesses owned by women have lower profits and earnings per employee, they seem to score better on some measures of “innovation” than majority male-owned companies.[5] Innovation is the primary engine of growth in all modern economies.

Supporting the development of female-owned small businesses is an important policy objective, as recognized in the 2018 federal budget which announced several new initiatives to boost female entrepreneurship.  However, barriers to growth remain a challenge.  As such, policy that facilitates the development of female-owned businesses should focus on tools to help women business owners overcome frequent hurdles to success, such as recruiting and retaining the right employees, improving access to capital, and scaling up financial literacy. Like all businesses, female-owned companies also face common business challenges that come from changing consumer demands, the rising cost of business inputs, and growing regulatory burdens — all of which affect BC’s competitiveness

The development of more female-owned businesses represents an important economic opportunity for BC and Canada — a 10% increase in female-owned small businesses across the country could contribute an additional ~$200 billion to national GDP in the next decade.[6] Combine this with progress in reducing barriers[7] to female labour force participation (see Women and Work in BC:  Who’s In, Who’s Out?) and the potential gain to Canada’s GDP would be significant.