Why Supporting Diverse and Underrepresented Entrepreneurs Strengthens Canada's Economy
Updated: 3 days ago
Empowering Diverse Entrepreneurs: A Path to Economic Growth in Canada
Introduction
When discussing business growth, the focus often lands on revenue, scale, and market share. However, we must also consider who has the opportunity to build and sustain a business in the first place. In Canada, entrepreneurship is not evenly distributed among populations. Differences in access to capital, networks, and support systems shape who can start, grow, and maintain a business. This is not just a question of equity; it is a question of economic performance.
The Current Landscape of Entrepreneurship in Canada
Canada's business community is diverse but not fully representative of its population.
Women Entrepreneurs
Women own approximately 18% of businesses in Canada. More than 99% of these are classified as small and medium-sized enterprises (SMEs). Women-owned and women-led businesses often operate in smaller-scale sectors. They report greater barriers to financing, receiving smaller average amounts than their male counterparts.
Immigrant Entrepreneurs
Immigrants show strong entrepreneurial activity, particularly in self-employment and incorporated businesses. Research from Statistics Canada and the Business Development Bank of Canada indicates that newcomers have higher rates of entrepreneurial activity than those born in Canada. Economic-class immigrants are more likely to own firms in knowledge-based industries. Immigrant-owned businesses significantly contribute to job creation and local economic activity.
Racialized and Minority Entrepreneurs
Racialized individuals represent a growing share of entrepreneurs but remain underrepresented in business ownership relative to their population size. As of the fourth quarter of 2023, businesses majority-owned by racialized individuals accounted for 19.4% of private sector businesses, while racialized groups make up roughly one in four people in Canada. These businesses are often smaller, more self-funded, and concentrated in a narrower range of sectors compared to non-racialized businesses.
Black Entrepreneurs
Black business owners represented 2.1% of all business owners in Canada in 2018, rising to 2.4% by 2020. Black Canadians make up about 4.3% of the total population, highlighting a persistent gap between population share and business ownership. Black-owned businesses face documented disparities in access to financing and support programs. They often experience smaller firm sizes, weaker financial performance, and lower rates of access to institutional support compared to other businesses.
Across these groups, a consistent pattern emerges: entrepreneurial energy and intent exist in abundance. The gap lies in access and sustainability, not in ambition or capability.
Why This Matters for the Economy
Supporting diverse entrepreneurs is often framed as a social issue. However, it is also a measurable economic opportunity. This has direct implications for national productivity, employment, and resilience.
1. Increased Economic Participation
When more people can start and sustain businesses, workforce participation expands. More individuals transition from employment to job creation, hiring others as their firms grow. Economic activity becomes more distributed across communities rather than concentrated in a few firms and regions. According to Innovation, Science and Economic Development Canada, small businesses account for 98.2% of all employer businesses in Canada. Small and medium-sized enterprises combined account for roughly 99.7% of all employer businesses. This underscores how broad participation among small firms is central to overall economic performance.
2. Innovation and Market Expansion
Diverse entrepreneurs often serve underserved and emerging markets. They introduce culturally relevant products and services and identify gaps that established businesses may overlook. Statistics Canada finds that immigrant entrepreneurs are more likely to own firms in certain knowledge-based industries. Immigrant-owned firms contribute strongly to net job creation and innovation. BDC's recent analysis emphasizes that immigrant entrepreneurs are vital drivers of new business creation and economic dynamism in Canada.
3. Local and Community Impact
Entrepreneurship directly affects communities through job creation and local employment. It encourages local spending and reinvestment in neighborhoods. When diverse businesses succeed, these benefits extend into communities often under-resourced and underserved by mainstream business infrastructure.
4. Long-term Economic Resilience
An economy that draws from a narrow segment of entrepreneurs is more vulnerable to disruption. Broader participation leads to diverse revenue streams across sectors, greater adaptability during economic shifts, and stronger overall resilience at the national level.
What Gets in the Way
The gap between entrepreneurial potential and business outcomes is not due to a lack of ambition or capability. It is shaped by structural barriers that affect underrepresented entrepreneurs more acutely.
Access to Capital
Many underrepresented entrepreneurs navigate lower approval rates for traditional financing and more frequent denials. They often receive smaller average loan sizes when approved. In 2020, data suggested that close to 1% of federal Business Innovation and Growth Support (BIGS) funding reached Black-owned businesses, despite their larger share of all businesses. For women entrepreneurs, research shows that the average financing amount for men-owned businesses is about 150% higher than that for women-owned businesses.
Access to Networks
Business growth is often relationship-driven. Underrepresented entrepreneurs may face limited access to industry networks, professional associations, mentorship, and sponsorship relationships. Reports on women and racialized business ownership indicate that these network gaps contribute to reduced visibility, fewer referrals, and fewer opportunities to secure contracts and growth-oriented resources.
Access to Operational Support
Many entrepreneurs lack clear internal systems and processes, strategic operational guidance, and tools aligned with their business operations. This leads to businesses that launch with strong energy but struggle to scale sustainably over time, especially among smaller and under-capitalized firms.
Why Support Needs to Go Beyond Funding
Funding is essential, but it is not sufficient on its own. Businesses also need the operational infrastructure and relationships that enable them to use capital effectively over time.
1. Usable Systems
Processes and tools should be practical, accessible, and aligned with daily business operations. This increases efficiency and reduces burnout as firms grow.
2. Implementation Support
Entrepreneurs require guidance that helps them move from ideas and plans to concrete execution. This is particularly important for owners navigating complex regulatory, financial, or procurement environments for the first time.
3. Capacity-Building
Developing internal strength and competency across finance, operations, governance, and strategy is vital. This enables businesses to operate, adapt, and grow independently over time.
4. Access Pathways
Connections to government and corporate procurement systems, strategic partnerships, and broader markets are crucial. These pathways are especially important for racialized, immigrant, women, and Black entrepreneurs who have historically been excluded from mainstream business networks.
The Broader Impact of a More Inclusive Business Economy
When barriers are reduced and access improves, more businesses are created and sustained over the long term. Economic benefits are distributed more widely across communities. Innovation reflects a broader range of lived experiences and market needs. Local economies become more stable and self-sustaining.
Evidence from federal and national research partners shows that underrepresented entrepreneurs already contribute significantly to job creation, innovation, and community resilience. Closing existing gaps would unlock additional economic potential. This is not about redistributing opportunity; it is about unlocking potential that already exists but is not yet fully supported.
Frequently Asked Questions
Why focus on underrepresented entrepreneurs?
Data shows they face measurable barriers in access to capital, networks, and support, which directly impact business creation, growth, and long-term sustainability.
Do diverse businesses contribute differently to the economy?
Yes, they expand markets, increase innovation, and strengthen local economies, especially in communities historically underserved by mainstream business infrastructure.
Is this only relevant for small businesses?
No. While many underrepresented entrepreneurs start small, the long-term impact includes scaling businesses, meaningful job creation, and broader economic contributions at the regional and national level.
Final Thought
Entrepreneurship is one of the most direct ways people participate in and shape the economy. When access to entrepreneurship is uneven, so is participation in economic growth. Supporting diverse and underrepresented entrepreneurs is not about focusing on specific groups in isolation. It is about building an economy that is more complete, more innovative, and more reflective of the full range of people within it.
ABOUT VERONICA FORD CONSULTING (VFC)
Why We Do This Work
At Veronica Ford Consulting (VFC), our work is grounded in a broader perspective: strong businesses do not exist in isolation. They shape the systems around them, and their success contributes to community stability and economic resilience.
When more entrepreneurs can build sustainable, well-structured businesses, communities gain stability and expanded opportunity. Economic participation becomes more widely accessible. The businesses that support communities are themselves well-supported.
This is not just about serving individual clients. It is about contributing to an economy where more people can build, sustain, and grow what they create. If you're building something meaningful and need a partner to help move it forward, let's talk.
Visit www.veronicafordconsulting.com to learn more about how VFC supports purpose-driven entrepreneurs and organizations through hands-on operational support, strategic guidance, and capacity-building.
This article is shared for general informational and educational purposes only and reflects the author’s perspective, interpretation, and research available at the time of writing. While care has been taken to provide thoughtful and well-researched content, information may change over time. Readers are encouraged to conduct their own research and consult a qualified professional regarding their particular circumstances before making decisions. Any decisions made based on this content remain the responsibility of the reader.
Works Cited
Sources are numbered to correspond with superscript references throughout the article. Format follows MLA 9th edition.
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1. Women Entrepreneurship Knowledge Hub (WEKH). State of Women's Entrepreneurship in Canada 2023. WEKH, Mar. 2023, wekh.ca/research/the-state-of-womens-entrepreneurship-in-canada-2023.v
2. Statistics Canada. "Immigrant Entrepreneurs in Canada: Highlights from Recent Studies." Statistics Canada Economic Insights, catalogue no. 36-28-0001, 22 Sept. 2021, www150.statcan.gc.ca/n1/pub/36-28-0001/2021009/article/00001-eng.htm.v
3. Statistics Canada. "The Expectations and Economic Outlook Among Businesses Majority-Owned by Racialized Individuals, Fourth Quarter of 2023." Statistics Canada, catalogue no. 11-621-m, no. 2023019, 21 Dec. 2023, www150.statcan.gc.ca/n1/pub/11-621-m/11-621-m2023019-eng.htm.v
4. Statistics Canada. "Black Business Owners in Canada." Analytical Studies Branch Research Paper Series, catalogue no. 11f0019m, no. 2023001, 22 Feb. 2023, www150.statcan.gc.ca/n1/pub/11f0019m/11f0019m2023001-eng.htm.v
5. Statistics Canada. "Black-Owned Businesses in Canada, 2020." Statistics Canada, catalogue no. 11-627-m, no. 2023052, 5 Oct. 2023, www150.statcan.gc.ca/n1/pub/11-627-m/11-627-m2023052-eng.htm.v
6. Innovation, Science and Economic Development Canada (ISED). Key Small Business Statistics 2024. Government of Canada, 2024, ised-isde.canada.ca/site/sme-research-statistics/en/key-small-business-statistics/key-small-business-statistics-2024.v
7. Innovation, Science and Economic Development Canada (ISED). Women Entrepreneurship Strategy: Progress Report 2023. Government of Canada, 2023, ised-isde.canada.ca/site/ised/en/programs-and-initiatives/women-entrepreneurship-strategy/women-entrepreneurship-strategy-progress-report-2023.v
8. Business Development Bank of Canada (BDC). "Immigrant Entrepreneurship Is Taking Centre Stage in Canada." BDC, 27 May 2024, www.bdc.ca/en/articles-tools/blog/immigrant-entrepreneurship-taking-centre-stage-canada.v
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