Turnaround is coming after ‘rational’ decline in entrepreneurship, expert says

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A recent report from the Royal Bank of Canada shows that entrepreneurship is declining among Canadians.

The report notes self-employment (with paid help) – which they call ‘high-potential self-employment ventures’ – “has become less attractive to Canada’s younger workers” and it could be a problematic trend for small businesses in Canada.

The high-potential self-employment ventures employ at least one other person. The numbers show that while 13 per cent of Canadian workers are self-employed, only 4 per cent have employees as of 2022.

Decline may be a ‘brief moment in time’

Elspeth Murray, an associate professor and director of the Centre for Entrepreneurship, Innovation and Social Impact at the Smith School of Business at Queen’s University in Kingston, Ont., says that the decline right now is “rational.”

We are living in uncertain times, and while people may not be starting businesses that employ others, Ms. Murray says she believes people are choosing to pursue side hustles while they wait for better economic opportunities.

One study from H&R Block shows 28 per cent of Canadians have taken up side hustles in the last year, up from 13 per cent in 2022.

Ms. Murray says she thinks we will see a rise in entrepreneurship again.

“I can’t imagine an economy that does not have a thriving entrepreneurial ecosystem,” she says.

We need a continuing stream of new ventures being created to continue driving economic wealth and prosperity for Canadians who own businesses and who work for them, Ms. Murray says.

“Canada is a nation of small and medium sized enterprises – and so entrepreneurship is really in our DNA.”

Ms. Murray says it’s also important to consider how we are doing in a larger context.

Startup Genome does extensive research on the world’s leading startup ecosystems, and its 2023 report listed Calgary, Edmonton and Quebec City as great places to start businesses. It also noted that Canada produced 18 unicorn companies (a privately held startup valued at more than US$1-billion) in 2021.

Ms. Murray says that the good part about people taking on side gigs right now is that it will give them the opportunity to learn entrepreneurial skills in a low-risk setting.

This experience will also increase the likelihood that people will be more successful when they want to start their venture full-time.

“I think we just have to get through this brief moment in time and we’ll be okay,” she says.

Making entrepreneurship approachable for youth

Craig MacMullin, chief executive officer of the Centre for Entrepreneurship Education and Development in Nova Scotia, says youth are uniquely posited to become the entrepreneurs of tomorrow.

“If you take a child prior to them going to school, they’re naturally entrepreneurial,” he says. “They explore, they test boundaries, they take risks, they learn from the results of all that testing and they modify their behaviour – that is an entrepreneur.”

However, Mr. MacMullin says he agrees that there are challenges in getting youth interested in being entrepreneurs.

The development of entrepreneurial skills in school is not a part of the core curriculum, he says.

Plus, when students are introduced to entrepreneurship, it is often presented as a one-track career opportunity, when in fact entrepreneurial skills can translate extremely well into other types of work if people want to change careers. Sometimes, it’s just not talked about as a viable option.

“The combination of a lack of experience in entrepreneurship, and then the perceived risk of owning a business, means that the conversation around the kitchen table probably doesn’t happen unless you live in a family of entrepreneurs who would look at it entirely differently,” he says.

Mr. MacMullin says entrepreneurship is also a very interesting opportunity for Canada’s youth, who are extremely socially conscious, as it presents a key way for them to take action on the social causes that they care about.

“If young people can take their creativity and their vision of a better way of doing things, and combine it with a drive to bring that vision into being and break away from ‘that’s the way we’ve always done it,’ that becomes like an ultimate expression of youth coming of age in many ways,” he says.

What I’m reading around the web

• Starting Nov. 1, 2023, employers in British Columbia were required to begin including pay ranges in jobs postings and it could have big workplace implications, according to a KPMG post. Employers must also prepare reports that help identify systemic discrimination in pay, and provide pay information to employees and applicants when requested.
• What can we learn from the lives of African elephants? A lot, according to Wildlife enthusiast Stephen Gianotti. Watch his TEDx talk to learn three lessons – and consider three questions – that help us look more deeply at human connection.
• Micro-retailers, or independently owned businesses that typically serve fewer than 100 households, account for most retail business in developing countries. Here are three ways they can use digital technologies to realize their full potential.

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