“We crunched data a few weeks ago and the risk that the pandemic poses — in terms of erasing the gains that Canada has made on supporting diverse entrepreneurs — is significant and undeniable. The proportion of women-led business in a ‘do-nothing scenario’ will drop from 17% to 12%. Businesses everywhere are struggling and failing. According to our statistics, the diverse ones are going down quicker and more frequently. We all know diversity leads to better results so, in my view, it’s absolutely critical to preserve that diversity to the extent that we can in order to have a thriving economy that comes out of this.”
— Laura McGee
I would now like to introduce Laura McGee, the founder and CEO of diversity, a leading technology solutions provider for diversity and inclusion. Laura is an entrepreneur that was on the ground at 111. Prior to the announced closing, she works closely with companies asset managers, development banks in North America, South America and Europe and has been featured at global events like the G 20 in Davos. Prior to diversity. Oh, Laura was a consultant at McKinsey and Company in their public and social sector practice. She's been named top 25 women of influence in 2017 and currently serves as co chair of Canada's expert panel on women entrepreneurs with the honorable minister Mary Yang. I would also like to welcome Amanda Felipe to the discussion. Amanda is an Akos new director of our national initiative for women entrepreneurs. Laura. Amanda, welcome. Thanks, Claudia. Great to be here. Thank you so much. So Laura Maybe I could direct a question towards you around. When you look at the ecosystem, Canada's economy is very diverse. And the majority of the programs that we've discussed today they were structured to benefit as many business owners and workers as possible. So SMEs across across the broad terrain. Can you can you share your thoughts on on the role of Canada's innovation sector as it relates to the broader population? And in particular, why should Canadians outside of the startup community outside of the innovation economy? Why should they care? What is the role that the innovation ecosystem plays in impacting their lives?
Yeah, I think that's a good question, Claudio, I think it's really important for us all to you know, we're all in the ecosystem and benefit from it. I do think it's important to be a little bit honest with ourselves. You know, this, this is not an equal opportunity, pandemic. And you know, quite frankly, if you look at all of the different sectors and businesses affected Tech is not the most sympathetic. I mean, in a lot of cases, you know, folks can work from home quite easily. You know, revenue streams definitely have slowed down, but maybe not have stopped entirely. So I think for me, the focus around the innovation economy and the need to develop support and programming specifically for the sector. I think the reasons are twofold. So number one, if you look at, you know, Canada's entire economic strategy, over the past, you know, four or five years, really has been designed to firepower and innovation economy. And we've made a ton of investments in both early stage and late stage growth, to create those, you know, Shopify slots for the future that will sustainably power Canada's economy. And we're at a moment right now, I was actually just looking at the data, you know, many of these companies that that hold a ton of potential and will ultimately return that in Government are at risk of failing. And the timeframe is shockingly low. I was looking at data from the Canadian Federation of Independent Business, you know, for more than 5060 70%, that timeframe is three months or less without government intervention. And so there's a, you know, a very clear, almost household finance argument that we've made an investment and we can't afford to lose it. I think Secondly, the more you know, kind of simple problem statement here is is COVID-19 has presented a number of completely unprecedented problems that need to be solved. So you have at the most basic level, things, you know, personal protective equipment, health care, you know, creating a vaccine, all that but then on the on the flip side, you have the economic impact. The need to work remote leads the need to adapt to new guidelines, etc. And I mean, the reality is a lot of those solutions are coming from the tech community. And so I'll maybe harken back a bit to Dr. King, I think you make excellent points. You know, there's been a lot of focus recently in Canada on the need for scale up financing and to, you know, to scale. But I think we're in a moment facing a problem where, you know, it's almost back to basics, ground level innovation. And I'm thinking specifically from my own experience, we adopted our technology quite quickly. I mean, we, fundamentally we audit companies for diversity and inclusion. So we adapt, you know, quite quickly pivoted and said, Okay, our system, our auditing tool is well set up to audit companies for compliance with COVID best practices and guidelines. And the first thing that we did was reach back out to our angel investors and say, Hey, you know, a little bit of seed funding would go a long way and more importantly, the value You add that an angel investor provides with respected, you know, introductions, feedback, advice, that's something that we leaned on heavily to it. So I guess, you know, long answer to a short question why, why this sector number one, ensuring that we protect that, you know, those past five years of investment in the economy, and number two is making sure that they're able to solve the myriad problems that this pandemic is suddenly presented.
And then based on your interactions with with entrepreneurs that you that you've spoken to from 111 and your network, what are you hearing about how the current environment is impacting them in the sense that, you know, are there specific programs that the government has announced that that they're able to take advantage of? How are they approaching at the current environment?
Yeah, so I mean, like, I think no one is, you know, answer that would make people happy playing this in this situation, as in, you know, a vaccine tomorrow. But I do think one thing that I personally commend the government for and I think it's been received positively is, number one, they've been quite agile in terms of putting out solutions, and then, you know, modifying them as according to feedback. And number two is, you know, the toolkit of solutions has been quite simple, which means it's not perfect, but at least it's, you know, relatively accessible. And it's super tactically, what I'm seeing on the ground is the wage subsidy is for our sector, the most important being it, you know, again, like, and we're unique because we were able to scale back office expenses, and that's, you know, fixed costs for a lot of folks but being able to retain employees, and, you know, even if, if we're not generating the same revenue, it's been really important. I think the other thing is, we found and our colleagues found that The Seba, the $40,000, loan was actually quite easy to access on it. For me, frankly, I was shocked at how easy it was to access that through my bank. And then I think the third program that was rolled out, that seems promising, although I don't know of any folks who received it is additional funding through Iraq, which is the kind of national innovation funding program that's designed for companies that don't qualify for the weight, Stephanie. Thanks, Laura. It's Amanda, I have one last question for you. So last week, the Canadian women's Chamber of Commerce and the dream legacy foundation published the results of a survey demonstrating the real impacts that COVID-19 have had on businesses run by underrepresented entrepreneurs. They noted that these founders face unique challenges and barriers around access to capital and marginalization, leaving them more vulnerable in times of crisis. And then a recent report by the Women's Entrepreneurship knowledge fund also highlights a gender imbalance. stating that there's considerable evidence that COVID-19 has had an uneven effect on women and diverse groups. So I'm hoping you can speak to the impact that this crisis is having on these groups and suggest any specific actions our country can take to ensure that existing challenges and systemic barriers are not magnified by the impacts of this crisis. Yeah, thanks, man. So, obviously, that that issue is very close to my heart. And I will say, I mean, we crunched the data a few weeks ago. And the risk that this pandemic poses in terms of erasing the gains that Canada has made on supporting diverse entrepreneurs is significant and an undeniable and so just to kind of make that real. We again crunched the data on the rate of failure by sector in Canada under kind of economic shutdown conditions, and by company size, and then we overlaid on that data The concentration of women owned business and minority owned business. And according to our quite conservative calculation, the proportion of women led business in a do nothing scenario will drop from 17% to 12%. of, you know, companies with between one and 500 employees in the very near term, and even that's conservative. So, I mean, businesses everywhere are struggling and failing. But, you know, according to architects, statistics proportionately, you know, the diverse ones are going down quicker and
more frequently. And I think the real risk there, you know, besides you know, the right thing to do in the moral cases, we need to position ourselves for a quick recovery. And we all know diversity leads to better results. And so, in my view is absolutely critical to preserve that diversity to the extent that we can in order to To have a thriving economy that comes out of this, you know, stronger. So I mean, the problem again, you know, well stated we're not the first to to identify it in terms of a solution. I think. Number one is, you know, in particular women, I think we need to be honest about the unique challenges that are faced by by families. And so you have a situation in most provinces where kids are kept at home. And if you're an entrepreneur running your business, I'm sure we have parents on the line trying to do both at once, especially with, you know, young kids is next to impossible. And the reality is that the woman is still typically the primary caregiver. And so I think that is a structural problem that you can't just throw money at it. Kids are required to be at home. You know, there's no so my, you know, potentially controversial view is, we need to find a way to safely reopen At least those early childhood daycare type programs and really support parents through this time. And I think Secondly is, you know, this is where I think the angel community and the venture capital community needs to step up is, again, never let a crisis go with or whatever the expression is around, find opportunity in the crisis. We've known that these businesses have been underfunded for decades. But I do think now is the time where the community is rallying around and really stepping up. So I think the private sector needs to get comfortable meeting with these startups by zoom, building trust building relationships in a way that that you know, they haven't before. This can be a situation where the same businesses just continue to get funding and get scale up funding. I think we need to look at diversifying your own portfolio and quite frankly, you will be positioning yourself For a stronger recovery if you do that.
Great, thank you, Laura. We're moving to a close. So appreciate both you, Laura and Amanda joining this conversation. Your perspectives are very helpful. And I'm glad that it sounds like I hope anyway, that things are going well for diversity. Oh, I'm a big champion of what you're building. And I think that there's a lot of good that it can contribute to the ecosystem. And I think there's also a really great company there. As mentioned, yeah, thanks, Laura.