Toronto has the most female entrepreneur-focused culture in the world, according to a study by the Dell Women Entrepreneur Cities Index.
The survey, released at the White House’s Global Entrepreneurship Summit, measured 50 world cities and ranked 25. For culture, the criteria included:
- Female entrepreneur role models
- Networking groups
- Social and print media on women entrepreneurs
- Policies around equal pay and hiring
- Paid maternity and paternity leave
The methodology explains how and why the decision was made.
A city’s culture, while less tangible, is believed by women entrepreneurs to be a critical enabler for their participation in commerce… [we measure] the prevalence of relevant mentors, networks, and role models, and the predominant attitudes and expectations of that community toward women entrepreneurs.
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Why Culture Matters
Culture can sound like the soft part of an index like this, but it shapes the harder numbers. A founder who can see other women running successful companies, find a mentor and join a network has an easier path to customers, hires and investors. Policies like paid parental leave also decide whether starting a business and starting a family feel like an either-or choice.
That’s why Toronto’s first-place finish on culture was worth celebrating. It’s also why the city’s lower overall score deserves attention: a supportive culture only goes so far if the money and talent aren’t there to match.
Overall Ranking Lags
Canada’s biggest city fared less well in the overall ranking on the status of women in technology. Toronto ranked sixth, taking into account factors including access to capital and talent availability.
The overall ranking means more work needs to be done, given the emphasis that federal and provincial Canadian governments place on workplace diversity.
In Toronto, 19 percent of startups had female founders and 25 percent had female employees, compared with averages of 24 percent and 29 percent, respectively, for Silicon Valley.
Jim Diffley, a senior director at one of the study’s backers, research firm IHS, told Fast Company that a whole new set of metrics had to be created to produce the ranking:
“This is not something that has been done before,” Diffley said.
Top 10 Cities for Female-Friendly Culture
- Toronto
- New York
- Sydney
- Munich
- Singapore
- London
- San Francisco Bay Area
- Paris
- Stockholm
- Sao Paulo
What Canada Did Next
The gap between Toronto’s culture score and its overall ranking pointed to capital as a weak spot. Two years later, financing was also a big part of the federal government’s answer. In its 2018 budget, Ottawa launched a Women Entrepreneurship Strategy.
The budget noted that fewer than one in six Canadian businesses, 16 per cent, were majority-owned by women, based on 2014 Statistics Canada data cited by the Business Development Bank of Canada (BDC). To help women-led companies grow, it made $1.4 billion in new financing available through the BDC over three years, and raised the BDC’s Women in Technology Fund to $200 million from $70 million. It also set aside $250 million over three years through Export Development Canada for women-owned and women-led businesses that export or want to start. And it said the government would aim to raise the share of small businesses in federal procurement that are women-owned from 10 per cent to at least 15 per cent.
The budget also pointed to the investor side of the problem. It cited a MaRS and PricewaterhouseCoopers estimate that only 30 per cent of Canadian venture capital firms had a female partner, and that only 12 per cent of all venture capital partners were women. That’s the same “access to capital” factor that held Toronto back in the overall ranking.
What It Means for Founders
For women starting companies in Toronto, the 2016 index carried a mixed message. The networks, role models and attitudes that make it easier to start were already among the best in the world. The harder part was raising money and hiring, where the city still trailed the leaders.
The practical takeaway is to use the strength to address the weakness. Mentors and founder networks are often the fastest route to warm introductions to investors, and government-backed lenders and funds can fill some of the gap where private venture capital is thin. For cities, the lesson is that a welcoming culture is a foundation, not a finish line.
Cover image contains icons licensed under Creative Commons 3.0, by Gerald Wildmouser
Frequently Asked Questions
Which city had the best culture for female entrepreneurs in 2016?
Toronto ranked first for female entrepreneur-focused culture in the 2016 Dell Women Entrepreneur Cities Index, released at the White House's Global Entrepreneurship Summit. The study measured 50 cities and ranked 25.
What criteria were used to measure a city's culture?
The criteria included female entrepreneur role models, networking groups, social and print media on women entrepreneurs, equal pay and hiring policies, and paid maternity and paternity leave.
How did Toronto do in the overall ranking?
Toronto ranked sixth overall, a ranking that took into account factors such as access to capital and talent availability. In Toronto, 19 percent of startups had female founders, compared with 24 percent in Silicon Valley.
What did Canada's 2018 budget do for women entrepreneurs?
The 2018 federal budget launched a Women Entrepreneurship Strategy, making $1.4 billion in new financing available through the Business Development Bank of Canada over three years and raising the BDC's Women in Technology Fund to $200 million.
How many Canadian venture capital partners were women?
Canada's 2018 budget cited a MaRS and PricewaterhouseCoopers estimate that only 30 per cent of Canadian venture capital firms had a female partner, and only 12 per cent of all venture capital partners were women.