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The Higher ED Blog: Barriers faced by immigrant women entrepreneurs

Michelle Madden / April 18, 2016

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The Higher ED Blog: Barriers faced by immigrant women entrepreneurs

Longer life expectancies and decreasing birth rates have left Canada’s workforce in a precarious place. Immigration is often touted as the solution, but that solution is based on the assumption that the newcomers will engage in the workforce and start or take over businesses. Unfortunately, immigrants, and particularly immigrant women, face many challenges that can prevent them from doing so.

This is an important topic to Flonia Trenova, a recent graduate of the University of Waterloo’s Local Economic Development master’s program. For her major research paper, she explored the barriers immigrant women face as entrepreneurs. Since there is very little research specifically about immigrant women entrepreneurs, Flonia drew from the literature on immigrant entrepreneurs and women entrepreneurs to show how these factors combine to make things particularly challenging for immigrant women.

General barriers

For newcomers trying to engage in the labour market, the greatest challenge (reported by 37% of immigrant women and 41% of immigrant men) is to get their non-Canadian qualifications and job experience accepted in Canada. This gap is likely why nearly half of Canada’s immigrants have obtained Canadian training of some kind.

Language is another major barrier: 19% of immigrant women and 13% of immigrant men say language problems have prevented them from finding a job. Nearly three quarters of immigrant women in Canada have a mother tongue that is not English or French, and 11% of those living in Canada fewer than five years cannot speak either official language at all.

Immigrant women are highly educated—a third of all immigrant women and half of those who arrived in the last five years have a bachelor’s degree or higher, compared to 27% of Canadian-born women—but they’re still having trouble finding relevant work.  Of these highly educated women, about half of the whole pool and 60% of the recent arrivals, are in positions that do not typically require a degree, compared to 30% of Canadian born women with the same credentials.

Sadly, discrimination is also a factor. Multiple studies have found that employers give applicants with ethnic names and foreign experience fewer call backs.

For some—or perhaps all—of these reasons, immigrant women are more likely to be unemployed compared to both Canadian-born women and immigrant men. The rate is even higher for recent immigrant women. For those who are having trouble entering or staying in the labour force, self-employment can seem like the logical solution. But all of the barriers mentioned above are also barriers for starting of business. For example, language barriers may impact a person’s ability to create a compelling business plan, and all of these factors may reduce their confidence in starting a business at all. If the prospective entrepreneur is not deterred by these barriers, there are several more business-related challenges they will have to face on the road to success.

Business-related barriers

Many immigrant women struggle with the financing and administrative components of starting a business.  A 2014 report on women’s entrepreneurship from the British Columbia-based Women’s Enterprise Centre summarized the range of challenges. The report shows that immigrant women may struggle to understand Canadian licensing requirements, taxation, health and safety rules, credit rating systems, accounting standards, and other business practices because they differ from the standards in their home country. Financing is also a major challenge. Women in general are more cautious about taking on debt, making them less inclined to turn to a financial institution and more likely to use personal savings. Even if they want to pursue alternate sources of financing, they will find limited access to angel networks and other forms of equity. As a result, women-run businesses tend to be and stay small. Once the business is running, women face further challenges because they typically have less management experience and business training, which has an impact on how (and whether) they pursue growth or take risks. Women also have trouble finding mentors, losing out on that source of guidance and knowledge.

A blog from Eliza Chang, the Program Director, Settlement Services of S.U.C.C.E.S.S. (a BC-based multicultural agency) confirms many of the Women’s Enterprise Centre’s findings. She agrees that immigrants may lack familiarity with provincial and federal regulations, and struggle with financing. She adds that new immigrants don’t have a credit history in Canada and may not have proof of income in Canada yet, which are often required by funders.  Even if they do qualify, they may think that business loans are too difficult to acquire and go with a personal loan, home equity loan, or borrow from family and friends. While immigrants of both genders face the barriers above, Chang notes that women are further restricted by the expectation that they take on more responsibility in the household and to care for children.

Despite these challenges, immigrant women are more likely to be self-employed than Canadian-born women (10% vs 8.2%). However, they are still less likely to be self-employed than immigrant men (18%).

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This research may make it seem that business ownership is impossible for immigrant women entrepreneurs, but many are finding success thanks to their personal and professional strengths. A report from the Toronto Training Board examined the traits of a small group of successful immigrant women entrepreneurs and found that they are strategic, dedicated, persistent, creative, flexible, and logical. A Fortune Magazine article proposes that these women are ambitious and further driven to succeed by the opportunities available to them in a non-male-dominated society.

Clearly though, there is much room for improvement to help immigrant women entrepreneurs succeed. Economic developers can do their part by understanding the barriers they face and working to overcome them.  Flonia recommends working with chambers of commerce of other business networks to support the development of immigrant women entrepreneurs and fill the knowledge gaps identified above. She also suggests providing them with networking opportunities to promote the exchange of knowledge and to build a support network.

 

About the authors

Michelle Madden is the editor of Higher ED. She is also the Outreach Manager for the Economic Development Program and a graduate of the LED master’s program.  She has authored many Higher ED articles sharing information relevant to economic development practitioners, and has written several on behalf of students. She has published several of her own blogs on economicdevelopment.org as well. Follow her on Twitter at @michelle_mad.

Flonia Trenova graduated from the University of Waterloo’s Local Economic Development program in 2016. She has previously worked as an analyst for the Federal Economic Development Agency for Southern Ontario and Wells Fargo Capital Finance.

 

About the series

Higher ED: Insights for the Next Economy is a platform for students, guest speakers, staff and faculty of the University of Waterloo’s professional and graduate economic development programs to share knowledge with the field at large. The series takes works destined for an academic audience and reworks them into a fresh, easy-to-digest blog article.

Established in 1988, the Local Economic Development program is the only master’s program in Canada devoted solely to local economic development. It offers a balance between theory and practice by combining coursework, a major research paper, an internship, and weekly seminars featuring guest speakers. Students are prepared for careers in local, community, or regional economic development.

The Economic Development Program is a nationally-accredited provider of professional training. It delivers certification programs and seminars that offer a deep understanding of the Canadian context in a convenient block format. Peer learning is combined with informative lectures and practical case studies to provide dynamic instruction that is beneficial for junior and senior-level practitioners.

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