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Survey reveals post-recession entrepreneurship surge Add to ...

Almost 45 per cent of Canadians who intend to start a new business say they are motivated by a desire to seize an opportunity as the economy recovers from the recession, a survey on entrepreneurship has found.

The Canadian Entrepreneurship Status 2010 report is one of the largest surveys of Canadian entrepreneurs. It found that Canada is undergoing an entrepreneurial revival triggered by the economic crisis and the economic recovery now under way. The survey was commissioned by the Business Development Bank of Canada (BDC), in partnership with the Fondation de l’entrepreneurship, and conducted with the help of Léger Marketing.

To provide a portrait of Canadian entrepreneurs (not including self-employed workers), the report uses four indicators that represent the entrepreneurial process: entrepreneurial intention, venture (or business creation) efforts, business ownership, and business closures. The report looks at how these indicators have changed since 2009, when the Fondation conducted its first global Canadian survey. In 2010, progress was noted on three of the four indicators.

The following table presents national data for each indicator in 2009 and 2010.

Population involved in the entrepreneurial process across Canada



2008

2009

Entrepreneurial intention

11.2%

7.0%

Venture (business creation) efforts

4.6%

3.2%

Business ownership

10.1%

8.7%

Business closures

6.7%

5.4%



Canadian entrepreneurship increases from east to west

Western Canada leads the country in entrepreneurship. The region has more individuals with the intention to start a business (16.9 per cent compared with 11.2 per cent for the country as a whole), more people actively involved in creating a business (6.1 per cent versus 4.6 per cent) and more business owners (13.2 per cent versus 10.1 per cent).

In 2010, the Atlantic provinces overtook Quebec in terms of entrepreneurial activity. The percentage of the population intending to start a business is slightly higher in Atlantic Canada (8.8 per cent) than it is in Quebec (6.9 per cent). There are also more business owners in Atlantic Canada (7.4 per cent) than Quebec (5.1 per cent).

The following table presents national and regional data for each indicator.

Population involved in the entrepreneurial process across Canada (2010)



Canada

Alb/BC

Man/Sask

Ontario

Quebec

Atlantic provinces

Entrepreneurial intention

11.2%

16.9%

10.5%

11.1%

6.9%

8.8%

Venture (business creation) efforts

4.6%

6.1%

3.5%

4.8%

3.6%

3.1%

Business ownership

10.1%

13.2%

12.5%

11.4%

5.1%

7.4%

Business closures

6.7%

8.5%

7.9%

6.4%

5.5%

5.5%



Entrepreneurial revival characterized by business opportunities

The Canadian Entrepreneurship Status 2010 study also takes a look at the reasons why Canadians start a business. “It has become a truism to associate a difficult economic climate with necessity entrepreneurship. In Canada, however, it is clear that more opportunity entrepreneurship is driving entrepreneurial intentions. Business closures have given rise to new needs which, in turn, translate into new business opportunities for Canadians,” said Mario Girard, CEO of the Fondation de l’entrepreneurship.

In fact, 44.4 per cent of those who intend to start a business said that one of their main reasons was the desire to take advantage of a business opportunity. This compares with only 7.7 per cent who said they wanted to start a business because they had no other choice.

“Rather than giving up, Canadians are showing a greater propensity to see the business opportunities generated by the economic recovery. They want to take advantage of them by starting their own businesses,” explained Jérôme Nycz, BDC vice president of strategy and enterprise risk management. “This is excellent news, since entrepreneurs hold much of the future prosperity of the country in their hands.”

A portrait of entrepreneurial activity by age and attitudes toward creating and growing a business

Age affects entrepreneurial activity in several ways. Younger entrepreneurs focus on growth while older entrepreneurs are more interested in innovation. When asked if they intend to invest in innovation, 26.3 per cent of owners aged 18 to 34 said 'yes' compared with 41.6 per cent of owners aged 55 and over. Conversely, 71.2 per cent of owners in the 18- to 34-year-old age group want to grow their businesses compared with 53.2 per cent of owners aged 55 and over.

The survey found that the obstacles to business expansion are similar to those affecting business creation. These obstacles have remained constant from one year to the next. For example, 63.4 per cent of would-be entrepreneurs say a lack of personal savings and/or financing prevents them from starting a business. A third of respondents (33.2 per cent) cite a lack of time and/or impact on family life.

In addition to financial and time management issues, a company’s size also affects entrepreneurial attitudes and behaviour. Most businesses owned by Canadian entrepreneurs are quite small: 79.4 per cent have between one and 10 employees. The survey indicates that the desire to grow a company increases with the number of employees. According to the findings, 61.7 per cent of entrepreneurs with one to three employees want to grow compared with 85.9 per cent of entrepreneurs with more than 10 employees.

About the Canadian Entrepreneurship Status 2010 study

Presented by BDC, the Canadian Entrepreneurship Status 2010 was producedby the Fondation de l’entrepreneurship in collaboration with Léger Marketing. The study was based on an Internet survey of English- and French-speaking Canadians aged 18 and over. Respondents came from a Léger Marketing panel of Internet users from across Canada. Information was collected from March 2 to 25, 2010.

Using Statistics Canada data, the results were weighted by province, gender, age, education and language spoken at home in order to make the sample representative of adult Canadians. Léger Marketing initially surveyed 10,605 respondents. (For a probabilistic sample of 10,605 respondents, the maximum margin of error would have been plus-or-minus 0.95 per cent, 19 times out of 20.) It then selected 2,077 respondents involved in the entrepreneurial process (not including self-employed workers) for more in-depth study. For a probabilistic sample of 2,077 respondents, the maximum margin of error would have been plus-or-minus 2.15 per cent, 19 times out of 20.

The Canadian Entrepreneurship Status 2010 report is available here: English version

About the Fondation de l’entrepreneurship

The Fondation de l’entrepreneurship (in French only) was founded 30 years ago and it is now a leading player in a movement to transform economic and social development in Quebec, especially through entrepreneurship. The Fondation provides essential products and services for entrepreneurs such as mentoring - Réseau M (in French only) - the Entrepreneurial communities program and the largest collection of French-language books on starting, managing and growing a business. The Fondation also has an Intelligence and Research Centre on entrepreneurial culture that produces research, analysis and information bulletins on entrepreneurship.

Content in this section is provided in partnership with the Business Development Bank of Canada. BDC provides entrepreneurs with financing, venture capital and consulting services. To find out more go to BDC.ca.

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