The troubling state of entrepreneurship in Canada. As I read
@channay insolvency story (below), I could not help but think of the study citing Canada’s loss of more than 100,000 entrepreneurs, down from a peak of ~870,000 in 2004 (
lnkd.in/eXYG-hYf).
Over that period, our population grew from 30 to 40 million. The study data suggest that we now can expect only ~50,000 new entreprenuers to emerge into our economy each year vs ~90,000 about 20 years ago.
More recent data, like those reported in Chris Hannay’s story, offer little hope. But, as a former entrepreneur, I tend to be an optimist. No matter how big the “problem”, it always contains “green shoots” of opportunity.
One big source of hope is the Global Entrepreneurship Monitor report that 14% of Canadians have entrepreneurial aspirations — that’s over 5 million people, or ~7x our current number of entrepreneurs.
With so many aspiring entrepreneurs, and an ever increasing number giving up on their dream, what’s going wrong?
[Just saying “giving up on their dream” doesn’t even come close to capturing the associated trauma, grief, fear, loss, embrassment, and financial hardship that accompanies business failure.]
One of the biggest challenges facing entrepreneurs is the utter and complete lack of understanding of what it takes to turn an idea into opportunities, jobs and prosperity — throughout our municipal, provincial and federal governments. As a result, according to the OECD, Canada is a gold medal creator of regulatory burden across our three levels of government.
[To be clear, there is absolutely no correlation between a high, stagnant regulatory burden, and greater societal protection. In fact, as the world is increasingly disrupted, the opposite is true.]
Another challenge is a culture (mainly provincial and federal) that believes the only way to help a business is to provide them with precisely targeted financial support. This is true in every sector, from agriculture to purely digital. This bureaucratic complexity is driving both business and government failure, not because of a lack of need, but because programs are increasingly complicated requiring businesses to hire consultants in order to access them. An important recent example was the failed $4 billion Digital Adoption Program (
lnkd.in/e_kc7PKe).
What we are doing is not working.
We desperately need more entrepreneurs who are ambitious, highly-digital, and intensely globally-focused, team builders. These entrepreneurs need regulators who understand and embrace the opportunities that are unlocked through agile regulatory reform, they need a tax structure that understands sweat equity, they need incentives that are unlocked by increased private investment. These are not the messages that any governments are yet sending, quite the opposite.
As a consequence, governments in Canada continue dig pot holes and subsidize the entrepreneur’s car repairs, rather than re-paving and straightening the road.