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Business owner Alexander Fernandes knows a thing or two about growing companies. The Vancouver serial entrepreneur has done it four times, most recently as CEO of Avigilon Corp., which makes high-definition surveillance systems. (Rafal Gerszak/Rafal Gerszak for The Globe and Mail)
Business owner Alexander Fernandes knows a thing or two about growing companies. The Vancouver serial entrepreneur has done it four times, most recently as CEO of Avigilon Corp., which makes high-definition surveillance systems. (Rafal Gerszak/Rafal Gerszak for The Globe and Mail)

Vanishing act: Where did Canada's mid-sized companies go? Add to ...

The tradeoff, she says, is that she can keep doing what she loves – if she expands to other cities, she will keep the boutique approach. “The bigger the company grows, you have to remove yourself from the work that made you passionate enough to start the business in the first place.”

CRACKING THE CASE

If there is a solution to this mystery, officials might consider looking to business owners such as Alexander Fernandes, who knows a thing or two about growing companies. The Vancouver serial entrepreneur has done it four times, most recently as CEO and founder of Avigilon Corp., which makes high-definition surveillance systems used in the Vancouver Olympics, British ports and Saudi airports.

The company officially graduated from small to medium (in number of employees) in 2010 and is one of the fastest-growing in the country. It now has 200 workers, and is hiring several people a week to help it expand in places like Dubai, Mexico and Finland.

The key to growth was thinking globally from the very beginning, says Mr. Fernandes, who began in the Canadian, U.S. and U.K. markets from year one.

“It’s always been a global plan,” he says. “I could not justify spending $20-million on R&D to develop a product that’s just going to be marketed in Canada. It’s just not big enough.”

Mr. Fernandes, who founded or worked at three prior companies that crossed size thresholds, has several theories for why other firms don’t graduate.

First, they don’t think globally. Second is risk aversion. “People are probably too complacent and too scared ... or maybe they’re just happy to make a nice living with their cottage industry,” he says.

In the meantime, one easy fix is to better track trends in company size. The Conference Board of Canada has pointed to a need for more nuanced data. Most research tends to lump small and medium-sized enterprises into one category, as SME, making it difficult to discern, for example, exactly how much medium-sized firms contribute to gross domestic product – and how much support they might require.

For its part, Montreal-based BDC (which crunched the numbers using data from Statistics Canada’s business register) is studying why there are fewer mid-size firms by examining the trajectory of medium businesses over a 10-year period to understand their evolution. They plan to publish their findings this summer.

Canada has done a good job of encouraging startups, but it must act swiftly to help them grow, said Mr. Cléroux, the business development agency’s vice-president.

“The next step is to understand how we’re going to support them or encourage them to get to the next level. The competition is so much greater now than before, so it’s more important than ever for our companies to be more solid and be able to export.”

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