Today, on International Women’s Day, we celebrate the lives and work of women, many of whom continue to face extraordinary challenges in much of the world.
I have a profound admiration for their courage, helping to build emerging economies through startups, micro-businesses and community-led initiatives, and in so doing, increasingly influencing political movements despite enormous obstacles.
Even here in Canada, a country in which we are so incredibly fortunate to live, we see inequities persist, or potential not reached.
When it comes to starting businesses, women in Canada are prolific, and their companies are growing in profitability and ambitions. It is also true that companies with the highest representation of women leaders financially outperform, on average, companies with the lowest (see Gender and Corporate Social Responsibility: It’s a Matter of Sustainability, a report co-written by authors from Catalyst and the Harvard Business School). Nonetheless, we find that women are still largely absent from the leadership teams of young, high-growth companies, which is a gender issue as well as an economic issue that should be of concern to everyone.
“Gazelles” are the critical drivers of prosperity
High-growth firms, or so-called gazelles, are critical drivers of prosperity as these firms create the majority of new jobs in modern economies. Typically, somewhere between four per cent and 10 per cent of all new companies become high-growth firms. Creating lots of startups is important, but not sufficient. More startups need to survive and grow to accelerate economic growth, particularly in tough times.
US data shows that in a given year, the top one per cent of firms generate roughly 40 per cent of all new jobs, and the top five per cent create 66 per cent of new jobs (for details, see the Kauffman Foundation research paper, High-Growth Firms and the Future of the American Economy). Typically, it is the young firms (less than five years old) – the very startups that MaRS is dedicated to supporting – that are most likely to be the fast-growing job engines. They create more new jobs, and they create them fast. In fact, age is more important than size in this respect.
To secure our economic future, it is essential that we create and support an ecosystem in which these young gazelles can flourish, since they will catalyze new growth and a new generation of meaningful jobs.
MaRS works to engage all entrepreneurs – male and female
At MaRS, we have worked hard to ensure that our programs engage and support both male and female entrepreneurs. We have smart, experienced, wise women leading our tech advisory practices, volunteering as startup mentors, designing and delivering entrepreneurship education programs and leading seed-stage investments (I will make a bet that the IAF team has the highest female-to-male ratio of startup investment managers in the country). In short, we have superbly talented young women leaders throughout our organization.
Nonetheless, fewer than 10 per cent of our client companies (across the information technology, communications and entertainment, cleantech and healthcare sectors) have women as founders or senior executives. Although high-growth firms are found in all sectors – not just technology – this is a disturbing picture.
Unfortunately, this is not a Canadian anomaly – we know that it is also true in many startup hubs, including Silicon Valley.
We must find a way to draw more women into entrepreneurship
At a time when 60 per cent of all students entering post-secondary education are women, it is critical that we find a way to draw more women into ambitious entrepreneurship. We have to ask, “What role will women play? How can we better support young women so that they put their talents to work in this critical driver of our country’s prosperity?”
A first step would be challenging the stereotype of the young, male college dropout as a prime entrepreneurial role model. Most women can’t relate and don’t plan to drop out. We also know that women are increasingly discriminating about where they work – they are looking for workplaces that understand and respond in very concrete ways to their career and family needs. They also want to find resonance for their values at work: they want work that matters, they want to contribute meaningfully and they want their contributions to be valued. When we integrated a social innovation component into MaRS’ entrepreneurship education programs, attendance quickly changed from a male-dominated audience to 50/50 representation from men and women. This is good news, since the world desperately needs entrepreneurial leaders focused on both growth and impact.
Where will our dynamic, ambitious women work tomorrow?
The simple question is, if young, high-growth firms create the majority of new jobs, but these firms do not have women in leadership roles, where will our dynamic, ambitious women work tomorrow? Without fostering these kinds of opportunities, how much skilled talent will we be squandering?
At MaRS, we are committed to supporting the fantastic women leading young, rockstar companies. We also want to better understand and address the barriers that limit women’s participation in young, high-growth ventures. But we need to work together – building connections, engaging successful female entrepreneurs as role models, supporting women business owners/leaders at all stages of growth, and opening investment channels – to achieve this goal.
As Canadians, we can’t be complacent. The modest presence of women around the business, innovation and risk capital decision tables of our country should be of great concern to us all.
Speaking personally, I am grateful that previous generations have made it easier for me to do what I do. Now I find myself asking if I am doing enough to make it easier for my daughters and the terrific young women coming up behind me to achieve their potential? Are we doing enough?
I welcome your thoughts, suggestions and feedback.
What can MaRS do for you?
Here is a partial list of the stellar women-led startups that MaRS is proud to support: