In the workforce, the terms ‘first’ and ‘woman’ still appear together far too often. While it’s important to celebrate women breaking new ground, it also serves as a frequent reminder that equality remains elusive. The latest frontier in this fight is already taking shape in the form of the gender innovation gap.
This gap relates to unequal representation and participation of women in innovation-related fields, such as science, technology, engineering, and mathematics (STEM), due to the persistent barriers that prevent or discourage women from asserting themselves in these areas. The same biases and barriers that keep women from going into STEM fields are also affecting their ability to attract the capital they need to put their ideas in motion.
Women-led businesses are an important part of the economy. According to the 2018 report Everywhere, Every Day Innovating – Women Entrepreneurs and Innovation, women-led startups in traditional service sectors tend to be more innovative in terms of how they engage employees and foster productivity, adapt technology to their business needs and collaborate with partners. When given a chance, the report notes, women entrepreneurs find innovative ways to use technological tools to open up new markets, products, and more.
Here are four ways to accelerate the path to equality and tear down the gender innovation gap:
1. Keep it flexible
Attitudes toward the traditional 9 to 5 schedule have been shifting across the board as people discover the better work-life balance that comes with more flexibility. It’s a particularly important theme for women. A 2019 report by McKinsey found that women need more flexibility in their schedules because they spend more than twice as much time on unpaid work at home compared to men. This amounts to an estimated 600 million hours globally. The transition to remote work doesn’t solve all the challenges, but it has made it easier for women to achieve a better work-life balance. Women entrepreneurs are already seizing this opportunity. By abandoning the traditional workplace, they are discovering that they lower operations costs and allow businesses to turn a profit faster.
2. Improve access to venture capital
If you want to understand why there aren’t more female entrepreneurs, all you have to do is follow the money. Pitchbook, a global capital markets data and insights provider, says that women-led startups receive less than 3% of all venture capital (VC) investments. With numbers like that, is it any wonder women assume they won’t be eligible for the funding they need to get their businesses rolling? VC firms should be on the lookout for women-led opportunities. A 2018 study by Mass Challenge and BCG found that women-led firms yielded more than two times as much revenue per dollar invested than those founded by men.
3. More financial support
If women entrepreneurs aren’t accessing the help of financial institutions due to systemic or perceived biases, governments and financial institutions need to work harder to create an ecosystem where women business owners feel confident and supported. Creating investing programs specifically for women-led businesses to actively strip out these unconscious biases can help close the gender innovation gap. This is one of the reasons why BMO created the BMO Celebrating Women Grant Program to reinforce its commitment to doubling its support for women business owners. Recipients of the 2022 grants (awarded in March of this year) received a portion of $230,000 in funding, with $150,000 going to Canadian-owned businesses and $80,000 to U.S.-based businesses.
4. Build a network
Some of the greatest advancements in equality happened when women banded together. The fight today may be different, but that approach is still sound. Women-led businesses can not only be role models and mentors to younger generations, but they can also use their position to forge stronger relationships with financial institutions. Increasingly, there are more professional networks forming like Monday Girl, a forum where women at all stages of their careers can share opportunities with their peers.
While progress is being made, there is still more work to do when talking about the contributions women are making in business and innovation.
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