Putting Canadian entrepreneurship in the global picture

 

As the global economy takes uncertain steps toward recovery, governments everywhere are looking to give their economies a competitive edge. Entrepreneurship is one lever that can accelerate growth. And with the right supports, it can be a pathway to success for women, youth, and others who are disadvantaged in the waged economy.

To stimulate business start-ups and help them grow, governments need to know what makes entrepreneurs tick: What drives them? What different barriers do men and women face? How does the local context rank against other countries and provinces in encouraging business start-ups?

A base for global comparison

The Global Entrepreneurship Monitor (GEM) is the world’s longest-running study of entrepreneurship. Since its launch in 1999, nearly 100 national teams have taken part. As of 2013, GEM surveys covered 75% of the world population and 90% of global GDP.  Each year, national research teams assess entrepreneurial activity — including individuals’ hopes and attitudes — across a wide range of countries. GEM indicators are harmonized to allow for regional comparisons and for countries to learn from each other.

Since 2009, IDRC has supported GEM research in Africa, the Middle East, South East Asia, and the Caribbean, giving countries in these developing regions a firm base of evidence on which to develop policies to encourage business start-ups. For example, a 2012 Gem report enabled countries in sub-Saharan Africa to compare their levels of entrepreneurial activity with others in the region and beyond, for the first time.

Bringing Canada back into the fold

In 2013, through a Canadian Partnership grant, IDRC supported Canada’s return to the GEM initiative after a decade-long gap. Led by the Centre for Innovation Studies (THECIS), an Alberta-based think tank, experts from 11 institutions across the country collaborated in producing the first Canadian national report since 2003.

Within the G7 group of advanced economies, the 2013 GEM Canada report found Canada to be a leader in early stage entrepreneurial activity. It reported 12.2% of the working age population is involved in new businesses — a virtual tie with the United States, and well ahead of other G7 countries. Almost 60% of Canadians surveyed saw opportunities for starting a business on the near horizon. The report also found first-generation Canadians to be more entrepreneurial than the rest of the population, and noted that Canadian women outpace their G7 counterparts in business activity. Unlike in other advanced countries, entrepreneurial activity in Canada focuses more on business services than consumer services.

According to Peter Josty, THECIS' executive director, the results are good news for Canada: “Entrepreneurs are innovators who fuel economic growth,” he said. “This report shows the Canadian appetite for entrepreneurship is strong, with optimism well up from the last Canadian GEM report in 2003. That’s very encouraging.”

To capitalize on Canadians’ appetite for innovation, the report makes a number of recommendations, such as improving framework support to women entrepreneurs and cutting red tape to spur innovative young firms.

The report entailed three components: a cross-Canada adult population survey, a national expert survey, and a synthesis of these two surveys with related statistical, economic and social data.

Comparisons at home and abroad

In addition to the national level report funded by IDRC, a series of provincial reports contribute to the GEM Canada effort. In 2013, surveys were carried out in Alberta, British Columbia, Manitoba, Newfoundland and Labrador, Ontario, Quebec, and Saskatchewan. Their conclusions allow for federal-provincial contrasts and enable comparisons with other countries with federal systems. For example, while Quebec tends to have lower levels of entrepreneurship than the Canadian average, the provincial report found it compares favourably with other advanced economies in some important measures.

GEM Canada also invites scholars to analyze specific points of comparison between Canada’s entrepreneurial environment and those in selected developing countries that are economically relevant to Canada. These scholars will develop a series of reports comparing and contrasting the national experiences.

Bringing Francophone Africa on board

Canadian expertise is also helping to build capacity in French-speaking countries of West and North Africa with IDRC support. The Research Institute for Small and Medium Enterprises at Université du Québec à Trois-Rivières is linking Canadian, Swiss, and African researchers in an effort to better understand and support entrepreneurship in four French-speaking countries: Cameroon, Burkina Faso, Morocco, and Senegal. Through GEM’s regional and international connections, these four will gain a platform for comparing their countries’ business conditions within Africa and beyond.

Seeing the person behind the business

Ultimately, the GEM studies shed light on the mindset of entrepreneurs. As Peter Josty notes, “The unique focus of GEM is on the individual, which reminds us that it is the individual who drives change in society.”

Attuned to these insights, governments here and abroad are better equipped to shape policies that help entrepreneurs succeed — and in the process — stimulate growth.

Read the GEM reports:

Mary O'Neill is an Ottawa-based writer and the founder of Lost Art Media.