Canada is experiencing a startup boom, with scores of bootstrapping entrepreneurs setting out on their own. While getting off the ground is an impressive feat in and of itself, it's sustaining a new business that presents the greatest challenge.
As a former startup founder and someone who works with small business owners every day, I know every success story is a huge personal achievement. We need to look at those accomplishments in aggregate, because from an economic perspective, it's a numbers game: the more businesses that start and ultimately thrive, the stronger our economy. Research shows the road to startup success can be bumpy:
- The Canadian technology sector accounts for one-third of all new ventures
- Millennials – those born between 1980 and 1995 and with the least business experience – are twice as likely to start a business in the next year
- More than 50 per cent of small businesses fail within their first five years
Young Canadians are highly entrepreneurial, but they need more help than we're currently providing, particularly in the technology space. To help pave that proverbial road, governments and the private sector need to continue working together. One way they can do this is by funding incubators, which provide young startup businesses with a variety of services from funding, mentorship and business assistance, to education and training, to rooms to work from – and even sleep in. They're the one-stop-shop for startups.
In Ontario, we have infrastructure designed to assist them in the form of innovation incubators. MaRS Discovery District, in particular, became a topic of discussion during the recent provincial election, with some questioning their relevance and criticizing their cost. Budgets at all levels of government are under pressure and taxpayers demand value for money. Yet we cannot lose sight of the fact that these incubators, and the ecosystems they support, represent a crucial investment in today's economy and the future of those who are just now coming into the workforce.
Incubators have played a critical role in the success of companies across a range of industries. They've been pivotal in creating an entrepreneurial culture that has enabled companies like Bubl develop ground breaking camera technology, or Shoplocket create a unique e-commerce platform, or Whirlscape build a better keyboard for mobile devices. These examples really just scratch the surface of what Ontario's entrepreneurs are capable of. Without support, we risk leaving these ideas on a whiteboard, or seeing them find success elsewhere.
Our country is at a crossroads: the "new economy" simply hasn't generated enough jobs to offset the losses in stagnating traditional industries. This disparity is largely responsible for the explosion in young people seeking their own opportunities. Yes, they are armed with good ideas, but turning them into a reality and creating a viable business around them, is a far greater challenge. That's where incubators come in.
The National Business Incubation Association in the United States says incubated companies have an 87 per cent success rate compared with 44 per cent for the average startup. Incubators are designed to simultaneously cultivate innovation, encourage entrepreneurs, and provide real-world, practical support, all of which are integral to ongoing evolution and small business success.
Ontario in particular has made great strides in areas such as clean technology and cultivating a digital economy, but this is just the beginning. Continuing to invest in incubators and our startup community is a clear investment in our province's future.
Nurturing innovation creates jobs, attracts investments, and boosts Ontario's and Canada's standing on the world stage. We've reached a critical moment. Let's keep thinking big.