Economic crisis and recovery trigger an entrepreneurial revival in Canada in
2010
BDC and the Fondation de l'entrepreneurship release the
findings of one of the largest-ever surveys of Canadian entrepreneurs
Highlights:
- Canadian entrepreneurship is growing; three of four important indicators of entrepreneurial activity progressed in 2010 compared to 2009.
- In terms of entrepreneurial activity in the different regions, western Canada leads the way; the Atlantic provinces are catching up to and in some cases overtaking Quebec.
- The economic crisis resulted in the closure of more businesses in 2010 than in 2009. The economic recovery triggered both the desire to start a business and the initiation of steps to create new businesses across Canada.
- The decision to start a business is motivated more by the desire to take advantage of a business opportunity than by the need to create a job for oneself.
- The number of Canadians who want to start a business in the next 12 months rose significantly during the year.
- More than one in ten Canadians (10.1%) own a business.
MONTREAL, Sept. 28 /CNW Telbec/ - The Business Development Bank of Canada (BDC), in partnership with the Fondation de l'entrepreneurship, today released the results of one of the largest ever surveys of Canadian entrepreneurs, the Canadian Entrepreneurship Status 2010 report. Conducted with the help of Léger Marketing, the survey found that Canada is undergoing an entrepreneurial revival triggered by the economic crisis and the economic recovery now underway in Canada.
To provide a portrait of Canadian entrepreneurs (not including self-employed workers), the report uses four indicators that represent the entrepreneurial process: entrepreneurial intention, venture (or business creation) efforts, business ownership and business closures. The Canadian Entrepreneurship Status 2010 report looks at how these indicators have changed since 2009, when the Fondation conducted its first global Canadian survey. In 2010, progress was noted on three of the four indicators.
The following table presents national data for each indicator in 2009 and 2010.
| Population involved in the entrepreneurial process across Canada | ||
| Canada - 2010 | Canada - 2009 | |
| Entrepreneurial intention | 11.2% | 7.0% |
| Venture (business creation) efforts | 4.6% | 3.2% |
| Business ownership | 10.1% | 8.7% |
| Business closures | 6.7% | 5.4% |
Canadian entrepreneurship increases from east to west
Western Canada leads the country in entrepreneurship. The region has more individuals with the intention to start a business (16.9% compared to 11.2% for Canada as a whole), more people actively involved in creating a business (6.1% versus 4.6%) and more business owners (13.2% versus 10.1%).
In 2010, the Atlantic provinces overtook Quebec in terms of entrepreneurial activity. The percentage of the population intending to start a business is slightly higher in Atlantic Canada (8.8%) than it is in Quebec (6.9%). There are also more business owners in Atlantic Canada (7.4%) than Quebec (5.1%).
The following table presents national and regional data for each indicator.
| Population involved in the entrepreneurial process across Canada (2010) | ||||||
| Canada | AB/BC | MB/SK | ON | QC | AP* | |
| Entrepreneurial intention | 11.2% | 16.9% | 10.5% | 11.1% | 6.9% | 8.8% |
| Venture (business creation) efforts | 4.6% | 6.1% | 3.5% | 4.8% | 3.6% | 3.1% |
| Business ownership | 10.1% | 13.2% | 12.5% | 11.4% | 5.1% | 7.4% |
| Business closures | 6.7% | 8.5% | 7.9% | 6.4% | 5.5% | 5.5% |
*Atlantic provinces
Entrepreneurial revival characterized by business opportunities
The Canadian Entrepreneurship Status 2010 study also takes a look at the reasons why Canadians start a business. "It has become a truism to associate a difficult economic climate with necessity entrepreneurship. In Canada, however, it is clear that more opportunity entrepreneurship is driving entrepreneurial intentions. Business closures have given rise to new needs which, in turn, translate into new business opportunities for Canadians," said Mario Girard, CEO of the Fondation de l'entrepreneurship.
In fact, 44.4% of those who intend to start a business said that one of their main reasons was the desire to take advantage of a business opportunity. This compares to only 7.7% who said they wanted to start a business because they had no other choice.
"Rather than giving up, Canadians are showing a greater propensity to see the business opportunities generated by the economic recovery. They want to take advantage of them by starting their own businesses," explained Jérôme Nycz, BDC Vice President, Strategy and Enterprise Risk Management. "This is excellent news, since entrepreneurs hold much of the future prosperity of the country in their hands."
A portrait of entrepreneurial activity by age and attitudes toward creating and growing a business
Age affects entrepreneurial activity in several ways. Younger entrepreneurs focus on growth while older entrepreneurs are more interested in innovation. When asked if they intend to invest in innovation, 26.3% of owners aged 18-34 said yes compared to 41.6% of owners aged 55 and over. Conversely, 71.2% of owners in the 18-34 year-old age group want to grow their businesses compared to 53.2% of owners aged 55 and over.
The survey found that the obstacles to business expansion are similar to those affecting business creation. These obstacles have remained constant from one year to the next. For example, 63.4% of would-be entrepreneurs say a lack of personal savings and/or financing prevents them from starting a business. A third of respondents (33.2%) cite a lack of time and/or impact on family life.
In addition to financial and time management issues, a company's size also affects entrepreneurial attitudes and behaviour. Most businesses owned by Canadian entrepreneurs are quite small: 79.4% have between one and 10 employees. The survey indicates that the desire to grow a company increases with the number of employees. According to the findings, 61.7% of entrepreneurs with one to three employees want to grow compared to 85.9% of entrepreneurs with more than 10 employees.
About the Canadian Entrepreneurship Status 2010 study
Presented by BDC, the Canadian Entrepreneurship Status 2010 was produced by the Fondation de l'entrepreneurship in collaboration with Léger Marketing. The study was based on an Internet survey of English- and French-speaking Canadians aged 18 and over. Respondents came from a Léger Marketing panel of Internet users from across Canada. Information was collected from March 2 to 25, 2010.
Using Statistics Canada data, the results were weighted by province, gender, age, education and language spoken at home in order to make the sample representative of adult Canadians. Léger Marketing initially surveyed 10,605 respondents. (For a probabilistic sample of 10,605 respondents, the maximum margin of error would have been ±0.95%, 19 times out of 20.) It then selected 2,077 respondents involved in the entrepreneurial process (not including self-employed workers) for more in-depth study. For a probabilistic sample of 2,077 respondents, the maximum margin of error would have been ±2.15%, 19 times out of 20.
The Canadian Entrepreneurship Status 2010 report is available at the following links:
About the Fondation de l'entrepreneurship The Fondation de l'entrepreneurship was founded 30 years ago and is now a leading player in a movement to transform economic and social development in Quebec, especially through entrepreneurship. The Fondation provides essential products and services for entrepreneurs such as mentoring (Réseau M), the Entrepreneurial communities program and the largest collection of French-language books on starting, managing and growing a business. The Fondation also has an Intelligence and Research Centre on entrepreneurial culture that produces research, analyses and information bulletins on entrepreneurship. For more information (in French only): www.entrepreneurship.qc.ca
About BDC BDC is Canada's business development bank. From more than 100 business centres across the country, BDC promotes entrepreneurship by providing highly tailored financing, venture capital and consulting services to entrepreneurs. www.bdc.ca
For further information:
Geoffrey King
Director, Public Relations
Business Development Bank of Canada
514 496-4351
[email protected]
Rina Marchand
Director, Marketing and Communication
Fondation de l'entrepreneurship
514 873-3262, ext. 226
[email protected]
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