Canadian workers enter 'the entrepreneurial era'

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After a decade repairing helicopters in places from the Arctic to Mexico, Marc Bonin grew weary of the turbulence in B.C.'s economically sensitive aviation industry. He wanted stability, and a chance to spend more time with his young son.

So last June he threw open his doors as the Car Butler - a service geared toward busy Vancouver-area doctors, lawyers and executives, which picks up and oversees repairs of their cars. It was a decision forged by choice, one that he said gives him more flexible work hours, potential for higher earnings, less need to travel and a chance to start something from scratch. Mr. Bonin, 38, plans to franchise his business in the next three years.

"I see it as my own creation. Many people relate it to babies, how they grow, and I can totally see it that way," he said.

Many others across the country can relate. More than 115,000 Canadians became self-employed in a recent one-year period, a study released Monday showed.

One obvious conclusion is that droves of laid-off workers were forced into self-employment because they had few other options. The number of self-employed in Canada climbed 4.3 per cent between October, 2008, and October, 2009. At the same time, paid employment tumbled by 480,000 or 3.3 per cent.

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But surprisingly, the Statistics Canada survey found this isn't the whole story. "Layoffs likely explained some, but not all, of the recent increase in self-employment," concluded the author, economist Sébastien LaRochelle-Côté.

A host of factors appear to be spurring the move, including the desire for more flexible working hours and higher earnings, along with economic factors such as the layoff of a spouse, the study said.

The conclusions are based on several observations. After the first five months of the downturn, beginning in October, 2008, the characteristics of those who lost their jobs bore little resemblance to those who became self-employed. Nearly half a year after the start of the downturn, 28 per cent of recently laid-off paid employees were employed by manufacturing firms. In contrast, many of those who became self-employed in the ensuing months were in services - such as finance and real estate.

Women accounted for the majority of the increase over the one-year period, at 58 per cent, even though men lost more jobs.

And the self-employment increase was heavily concentrated among older workers - particularly those 55 years of age or older.

History suggests most laid-off workers typically become re-employed quite quickly, while only a small portion become self-employed in the months after the loss of a paid job. Even if the rate of recently laid-off workers hit the high end of what's been observed in the past 14 years, laid-off workers would account for just over one-third of those who became self-employed, the study said.

The findings strike a chord with Bakr Ibrahim, director of the Centre for Small Business and Entrepreneurial Studies at Montreal's Concordia University. His research has found that women in particular are turning to entrepreneurship - either out of frustration because of a lack of career advancement opportunities or because they want to spend more time with their children.

He calls this the "entrepreneurial era," made easier by technological advances that require little space and capital for new businesses to grow, even globally.

A fundamental shift means ever-fewer people will work for large organizations, and more people will work for themselves, or in smaller outfits, Dr. Ibrahim said, a transformation that will make Canada's economy much more agile.

"It makes the economy more fine-tuned to changes in the industry and to new trends - so we are now more responsive," he said.

Doesn't that make a lot of people's situations more precarious?

"No. We have seen big employers restructure, or downsize, there is no more security," Dr. Ibrahim said. "More people are seeing self-employment as a way to have more flexible time for their family and also as a way to ensure they are in charge of own destiny."

Statscan defines self-employment as employed people who work for themselves or work without pay for a family business. Many work alone, but others may be small-business owners and employ paid workers.

About 2.7 million Canadians are currently self-employed. Levels of these workers were relatively flat in the 2000s, after constant growth in the two decades up to 1999. Self-employment accelerated during recessionary periods in the early 1980s and 1990s and most of those increases were retained in subsequent recoveries.

Much of the increase was in Quebec, followed by Ontario and British Columbia.

Statscan didn't say why Quebec accounted for about half of the increase, though Dr. Ibrahim said it could stem from a dwindling number of larger employers in the province, plus a growing number of immigrants who are turning to self-employment.

Net numbers hide huge movements that have happened in the self-employment category. About 285,000 people entered self-employment in the one-year period, while 170,000 exited.

Rhonda White, 55, was one of them. She started her own gardening design business in Montreal last April and was continually busy through the summer months. "I've never worked harder, and never been happier," she said. She has since taken a job as an executive assistant - but will resume her own business on weekends as the ground thaws.

In B.C., the number of people interested in entrepreneurship is surging, said Lorna Anderson, who runs networking workshops through an organization called Happen. Universities and colleges are doubling the amount of classes on offer, and still people are being turned away, she said. She's counselled a range of the newly self-employed, from magicians and artists to carpenters and "young people with great amounts of educations, but who didn't fit into regular jobs."

Al Dukowski, 55, is part of a legion of older workers who are turning to self-employment - and finding they love it. The gemologist worked in the wholesale jewellery industry for years, before opting to open his own business in November that buys peoples' unwanted gold, silver and platinum in Vancouver.

Like others, it wasn't a path he had envisaged. But now that he is his own boss, he sets his own hours and works alongside his wife. He expects the business will be self-sustaining in the next month or two.

"With all the economic troubles in the country, the silver lining may be that there are a lot more people like me. I would guess that's the good that comes out of all this."