Systemic gender barriers mean going it alone may not be the answer for all new women entrepreneurs in Canada

Systembedingte geschlechtsspezifische Barrieren bedeuten, dass Alleingänge möglicherweise nicht die Antwort für alle neuen Unternehmerinnen in Kanada sind

Average (logarithmic) labor productivity by year and property type. Recognition: Small business administration (2022). DOI: 10.1007/s11187-022-00659-w

A new study shows that inexperienced women entrepreneurs in Canada are still more successful when working with experienced men than when they work with experienced women or go alone.

That’s the key finding of a study by the University of Waterloo and Statistics Canada, based on an analysis of 183,358 unique Canadian business formations from 2006 to 2017 and the impact of female and male co-ownership.

According to the study’s co-author, Dr. Horatio M. Morgan, a professor at the Conrad School of Entrepreneurship and Business in Waterloo, says that women-owned companies typically underperform in terms of growth rate, profitability, survival rate, number of employees and productivity.

Research shows that this is mainly due to the fact that women continue to face significant barriers, including negative gender role stereotypes and difficulties in gaining previous experience in managerial positions in established companies, as well as challenges such as reduced access to finance.

Morgan emphasizes that the study doesn’t suggest that all women need to work with men to start successful businesses.

He said the results are specific to women with no experience, and that the research actually shows that a partnership between an experienced female entrepreneur and an experienced male brings no productivity gains.

After reviewing all the data, the researchers concluded that equal ownership – novice female entrepreneurs and experienced entrepreneurs joining together as equal co-owners – can help women overcome the systemic barriers their new businesses face.

Morgan and his Statistics Canada colleagues, Douwere Grekou and Jenny Watt, set out to learn more about why new, inexperienced women entrepreneurs often struggle and what potential remedies might be available. The results of this research, which may not have been what many people expected, could serve to focus more resources and studies to better understand the experiences and influence of women entrepreneurs.

“It’s one thing to encourage women to get into business,” Morgan said, noting that the study focused on the effects of co-ownership and didn’t look at the role of actual mentorship. “But if it doesn’t turn out to be successful, it won’t be a way for them to gain experience and get better results quickly.”

The productivity gap created by gender barriers is also reduced when inexperienced women work with experienced female entrepreneurs, but analysis showed that the gains are significantly smaller and less sustainable than when they work with experienced male entrepreneurs, who tend to have a broader knowledge base and stronger connections in male-dominated networks.

The implications of the study are twofold. First, Morgan said the findings could help women bridge the gap in male-dominated economic sectors and increase gender equality in business.

Second, Morgan said fostering more successful women entrepreneurs in Canada will benefit the country as a whole. Harnessing the energy and talent of half the population in new ways could boost productivity and raise living standards across the country.

The study appears in Small Business Economics: An Entrepreneurship Journal.

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More information:
Douwere Grekou et al, Gender Productivity Gap: Does Gender Equality Ownership Compens for Female Entrepreneurs’ Lack of Prior Industry Experience?, Small Business Economics: An Entrepreneurship Journal (2022). DOI: 10.1007/s11187-022-00659-w

Provided by the University of Waterloo

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