Nathaniel Bagnell, 25, ditched a solid, high-paying job as a computer programmer last year to co-found a business analytics company. A few floors down, in a Toronto startup building humming with activity, Klever Freire, 30, has also quit his day job, at Bombardier Aerospace, in favour of launching his own company that makes flying robots.
“The appeal of being able to create a company based on nothing more than the product ideas that lived in my head was too compelling to ignore,” says Mr. Freire, whose company, DreamQii, now employs six people.
A new class of ambitious risk-takers is emerging in Canada, a shift not captured in the drumbeat of statistics showing slow economic growth, anemic job creation and poor innovation. Entrepreneurs are taking advantage of better networking opportunities, the rise of social media, accessible global markets and easier access to capital. Another draw is the opportunity for stimulating work.
A paper to be released Wednesday finds early-stage entrepreneurship rates are now far higher in Canada than those of other G7 countries and on par with the United States. Young people and women are the growing face of entrepreneurship in Canada, the study by the Global Entrepreneurship Monitor finds.
In many countries, necessity due to a lack of job opportunities, rather than choice, drives entrepreneurial activity. It’s a different story in Canada, where the survey shows entrepreneurs report following opportunity instead by a ratio of almost 7 to 1 – something Mr. Bagnell and Mr. Freire exemplify. A global comparison shows Canadian entrepreneurs tend to be more optimistic than those in other countries and less fearful of failure.
It’s not all bright news – only about half of Canadians feel they have the skills and knowledge to start a new business, the study showed, well behind U.S. levels. And there’s variation among provinces, with Alberta showing the highest level of entrepreneurship and Quebec the lowest.
This is the first time since 2003 Canada has been part of the GEM study. The findings are based on a telephone survey of 3,272 Canadians last summer along with 42 expert interviews. The research paper was written by Peter Josty, executive director at Calgary’s Centre for Innovation Studies, along with the University of Calgary’s Cooper Langford and Simon Fraser University’s Adam Holbrook.
Entrepreneurship is a key driver of economic activity, spurring both innovation and employment, though it can be difficult to quantify. While the GEM study is a useful barometer of attitudes towards entrepreneurship, it doesn’t reflect how many new businesses are actually successful (older Statistics Canada data, from 2011, shows small business success rates haven’t much changed in the past decade, with almost a third failing to survive beyond two years).
The Conference Board of Canada has long given the country a “D” for innovation. The World Economic Forum puts Canada in 14th place in global competitiveness. Canada is also out of the top 10 (in 11th place) in a global innovation index compiled by Insead Business School.
Nonetheless, shifts are afoot with easier access to capital through small business loans, venture markets, crowdfunding and government startup funds. Venture-capital disbursements rose to a six-year high last year, of $2-billion, while crowdfunding sites such as Kickstarter are growing rapidly.
Cultural shifts may also be playing a role. “Young people these days have lots of role models – many products and services they use on a day-to-day basis are from companies where they know the story about the founder,” such as Apple’s late founder Steve Jobs and Facebook’s Mark Zuckerberg, said Rebecca Reuber, professor of strategic management at the Rotman School of Management.
High schools are teaching more entrepreneurship, while many scholarships now stipulate students must demonstrate innovation and leadership skills, she said. Plus, app development has made it easier for people without much startup money, but with a good idea, to make something of value and distribute it. “There’s just more of a culture of innovation” among students now than in previous decades.
Back in Canada’s largest startup space, Digital Media Zone, which is housed over five floors through Ryerson University, hundreds of budding entrepreneurs are tapping on computers or making protypes with 3D printers. Since its inception four years ago, dozens of companies have started and grown, generating 1,100 new jobs in sectors from gaming to health care, Big Data and retail. The success is such that it has just opened another DMZ lab in Mumbai, India, which it hopes will cross-fertilize ideas and experiences with the Toronto location.
The centre is open to everyone, not just students, though there’s clearly a preponderance of 20-somethings.
That’s partly because landing good jobs has gotten more difficult, says Valerie Fox, DMZ’s executive director. But more importantly, “our people see that the types of jobs out there don’t fit them...So they want to start new types of jobs that better fit who they are and what they want to be.”