Entrepreneurship in Alberta – Definite signs of the poor economic situation in Alberta. – Blog #19

21, January 2019 – Blog #19

 Entrepreneurship in Alberta – Definite signs of the poor economic situation in Alberta

Alberta again has the highest rate of entrepreneurship in Canada, confirming what we have seen for the last five years. The Global Entrepreneurship Monitor (GEM) report on Entrepreneurship in Alberta shows that 19.6% of Albertans aged 18-64 are involved in starting a business. This is higher than the rate for Canada as a whole (18.8%) and higher than all other innovation driven economies including the US, Australia and Israel.  Although Alberta has a slightly higher rate of established businesses than Canada as a whole (7.5% vs 6.2%) it is lower than the US or Australia.

Alberta also has a lower rate of intrapreneurship than the Canadian average, 5.7% compared with 6.6%, similar to last years findings. This factor can be linked to a firm’s innovation and productivity strategies.

Who are these entrepreneurs? They are highly educated, with most having a university or college education, many with graduate degrees. The rate of entrepreneurship rises steadily with the amount of education, peaking in those with some post graduate experience. Their ages vary, with entrepreneurship rates peaking in the 25-34 and 55-64 age group.  The entrepreneurship rate in the 55-64 age group is two and a half times the Canadian average, and supports a narrative of older workers losing their jobs in the weak economy.
For Established Businesses, the rate increases steadily with age, as expected, but Alberta has a surprisingly high rate in the 18-24 age group.
The rate of women’s entrepreneurship is almost 90% of the male rate, one of the highest ratios in the world. It is much higher than the Canadian average of 66%.

What do they do?  Alberta has a very different startup industry profile than Canada. GEM puts businesses into four categories – extractive (oil and gas, mining and agriculture); transformative (manufacturing), business services and consumer services. Alberta has two and a half as many extractive businesses, twice as many transformative business, roughly similar business services, and far fewer consumer oriented businesses than Canada as a whole.

Why do they do it?  Most entrepreneurs say they started their business to purse an opportunity, although 23% do so out of necessity, because they had no other economic opportunities. The necessity rate is 50% greater than the Canadian average, and this may reflect poor economic conditions in Alberta. It is worth noting that in 2014 (when the economy was much stronger), the necessity entrepreneurship rate in Alberta was only 8%.

Size and Growth. Startups in Alberta are much smaller than the Canadian average. One third of all Alberta startups have no employees, compared with 22% in Canada. And only 6.7% have 20+ employees, compared with 12.9% for Canada as a whole. However, almost a quarter of Alberta startups plan to have 20 employees in five years’ time.

How innovative are they?  40% of Alberta startups say they have no novelty in their products or services, the highest rate in Canada. This would indicate a low level of innovativeness. This is corroborated by the metric that over 60% of Alberta startups use older technology, also the highest rate in Canada.  However, 12% of Alberta startups say they have no competitors, the highest rate in Canada. So it looks as if there are a few very innovative startups among an overall pool of low innovations.

How supportive is the ecosystem?  GEM measures ecosystem performance by polling 36 experts in nine separate areas of expertise. By these measures, Alberta is similar to Canada as a whole, except performance is a little lower in most measures. Alberta is equal to or better than Canada in 4 of the 9 measures used in the report.

What constraints do they face? According to the Expert opinion, the main constraints facing Alberta entrepreneurs are:

  • Financial support;
  • Government Programs and policies;
  • Capacity for entrepreneurship.

GEM is the oldest and largest study of entrepreneurship in the world, covering 60+ countries every year.

The report contains the following recommendations:

  1. Continue to highlight opportunities for entrepreneurs in the province and develop tactics to mediate fears in future training initiatives.
  2. Consider ways to increase Employee Entrepreneurship?Intrapreneurship within Alberta.
  3. Aim to close the gender gap completely and investigate further why Alberta is more successful in this area than elsewhere across Canada.
  4. Provide support for burgeoning entrepreneurs with high growth expectations within the province in order to optimize their impact.
  5. Follow expert advice and look for improvements in Government Policies, Finance, and Education. 

The full report is available at GEM Alberta 2017 Report.

Peter Josty

p.josty@thecis.ca
403-249-0191
www.thecis.ca

 


Women’s entrepreneurship in Canada Blog #14

12, December,  2017 – Blog #14

Women’s entrepreneurship in Canada

Women’s entrepreneurship continues to attract a great deal of attention and interest around the globe, given growing evidence of its economic and social impact. Initiatives such as the World Bank’s Women’s Entrepreneurship Financing Initiative  (WE-FI), and Goldman Sachs’ 10,000 Women Program , are just two examples of a growing range of initiatives aimed at supporting and encouraging women-led business. Within this global context, Canada has emerged as a leader in women’s entrepreneurship, with the highest levels of early-stage activity (TEA), and the fifth highest established business ownership (EBO), amongst innovation-based economies.

The GEM Canada Report on Women’s Entrepreneurship highlights the strength of women’s entrepreneurship in Canada. Some highlights from the report:

  • In 2016, 13.3% of Canadian women engaged in some form of early stage business activity, involving a business that was 3.5 years old or younger. This was up from 10.0% in 2014, and marked the highest rate of women’s TEA in 2016 amongst comparable innovation-based countries.
  • Comparing Canada to other G7 countries—such as the U.K. (5.6%), Germany (3.1%), France (3.4%), and Italy (3.3%)—helps to underline the striking and high level of Canadian women’s participation in early-stage business.
  • 6% of Canadian women were engaged in established businesses – those more than 3.5 years old – the fifth highest rate among comparable countries.
  • Canadian women entrepreneurs are found across all age groups, though start-up rates are highest among women aged 25-44, while the majority of established business owners fall between 55-64 years of age.
  • Women entrepreneurs are highly educated, with 12% having a graduate degree and 53.8% having a college or university degree.
  • 82% of women indicated they were motivated to start a new business by opportunities, up notably from 70% in 2014, while only 14.5 % were motivated by necessity.
  • Early stage women entrepreneurs are heavily involved in consumer services (54.4%), followed by business services (28.2%) and manufacturing (14.6%)
  • For established businesses, the pattern is different and much more evenly distributed between consumer services (41.2%) and business services (41.2%). This greater presence in business services is important and encouraging, given that business services is typically a much more profitable sector, one that is increasingly recognized as driving innovation and business growth according to research on the ‘knowledge-intensive business service’ sector (KIBS). 19.2%)

 

The Global Entrepreneurship Monitor (GEM) is the world’s largest study of entrepreneurship, and typically covers 60-70 countries each year with a standardized methodology allowing ‘apples to apples’ comparison between countries.  In Canada GEM reports are carried out by the Centre for Innovation Studies (THECIS) based in Calgary.  This report was written by Karen Hughes a Professor at the Alberta School of Business and the Department of Sociology at the University of Alberta.  The full report is available at https://tinyurl.com/y94gxqpn

Peter Josty

p.josty@thecis.ca
403-249-0191
www.thecis.ca

 

 


Entrepreneurship in Alberta – Blog #11

26, September, 2017 – Blog #11

Entrepreneurship in Alberta

Entrepreneurship is alive and well in Alberta, according to the latest GEM (Global Entrepreneurship Monitor) report, just issued by THECIS.  Over 17% of the adult population is engaged in early stage entrepreneurship, a higher rate than in the US, Australia and all other advanced countries.  Women are very active in early stage entrepreneurship, at 80% of the men’s rate, also higher than the US.

Consumer services is the most popular field, with just more than  50% of ventures, followed  by business oriented services at 30% and manufacturing at 20%. Age is an important determinant of entrepreneurial activity, with higher rates in the 18-24 and 25-34 age groups. Overall, however, about half of new ventures are led by people aged 18-34, and half by those aged 35-64. Above age 65 the rate drops off, but still 4% of older Albertans are active as entrepreneurs.

Education is also a key determinant of entrepreneurship. As people acquire more education they become more entrepreneurial.  The highest rate of entrepreneurship is found among those with post graduate education.

The Alberta population is very supportive of entrepreneurship, with  60%–70% of respondents believe that entrepreneurship is a good career choice that successful entrepreneurs have high social status, and that media provide favorable coverage of entrepreneurship.

About 15% of startups are highly innovative, having no direct competitors.  About 40% of startups are in sectors with many competitors.

Experts were asked to evaluate the Alberta ecosystem by rating nine relevant factors. The five with the best scores were: physical infrastructure, commercial infrastructure, social and cultural norms, government programs, and government policy at neutral.  The lower five in decreasing order were post-secondary education at neutral, R&D transfer (to small and growing firms), internal market dynamics, finance, and primary and secondary education. The experts were also asked to rate to biggest constraints and fostering factors. The most mentioned constraints were finance as the top priority with capacity for entrepreneurship and government policy as next areas of priority.

The most mentioned fostering factors were  cultural and social norms as highest priority with the economic climate and, surprisingly, the low rated question of education and training as second and third areas of priority.

The report had five recommendations:

  1. Creative government programs are needed to support entrepreneurship that has promise to create new directions. This needs to involve all departments of governments, not only those with responsibility for small business.
  2. School systems need to examine the opportunities to promote entrepreneurial thinking in the context of education aimed at encouraging independence and creativity.
  3. Despite the evidence that entrepreneurship by women in Alberta is stronger than in other parts of the country or in other developed countries, a gap remains and attitude and motivation data indicate that women still have less confidence in skills and  knowledge and women entrepreneurs have more complex motivations. Information programs and mentorship for women remain a priority.
  4. With the low rate of seniors’ entrepreneurship and the expected increase in size of this demographic in better health in the future, consider targeting entrepreneurship programs at older Albertans.
  5. Data show rates of entrepreneurship rise with increase of educational experience. Education for entrepreneurial thinking should be promoted across all types of secondary and post-secondary programs.

The full report is available at www.gemcanada.org

Peter Josty

p.josty@thecis.ca
403-249-0191
www.thecis.ca


Entrepreneurship in Alberta – GEM Alberta 2016 Report

GEM Alberta 2016 Report

Entrepreneurship in Alberta- The latest GEM Report

 

Speaker: Cooper Langford, University of Calgary

The Global Entrepreneurship Monitor (GEM) is the largest study of entrepreneurship in the world. This presentation describes the latest GEM Alberta report and compares entrepreneurship in Alberta with other Canadian provinces and 60 other countries.  The report takes a comprehensive look at the aspirations, attitudes and activities of entrepreneurs in Alberta and how Alberta compares with other jurisdictions. The study also identifies some of the strengths and weaknesses of the Alberta innovation system. This is the fourth GEM Report on entrepreneurship in Alberta

Time & Location
Time:  9:00-10:00 am
Date: Thursday October 12th 2017.
Place:  Innovate Calgary,  3553 31 Street NW,  Calgary, Boardroom 2/3

Cost
Ticket: Free

Registration
By Phone: 403-968-3722 or 1-877-877-1055 [toll free anywhere in Alberta]
By Email: Martha@thecis.ca