Canadian entrepreneurs in good shape, more cooperative than U.S. counterparts
The government and banking industry in Canada are doing a good job at providing financing to entrepreneurs but are failing at properly communicating to the public about how to access that money, experts say.
“I think it’s more of an information gap than a financing gap,” said Allan Riding, Deloitte Professor in the Management of Growth Enterprises at the University of Ottawa’s Telfer School of Management.
“Part of the issue, of course, is awareness. And new business owners, people who are just entering self-employment, often don’t know about what’s available,” said Prof. Riding.
“Raising financing is not easy, but there is help. Governments and the banks are trying to do that because it’s in everybody’s best interest,” said Prof. Riding.
“Canadian entrepreneurs have it pretty good when we compare ourselves to other countries around the world,” said Julia Deans, who is the CEO at Futurpreneur Canada, a national, non-proﬁt organization that helps aspiring entrepreneurs, aged 18-39, with financing and mentoring. It receives some funding from banks and the government.
Dominic Lim, an assistant professor of entrepreneurship at Ivey Business School at Western University, agreed that there is a lot of support for new businesses. He points to several studies for his information.
In terms of opportunity and resources Canada is ahead of all other G20 countries, except the U.S., said Mr. Lim, referencing a Global Entrepreneurship Monitor report and another report by the Global Entrepreneurship and Development Institute. “It looks like things are going pretty well,” he said.
An Ernst and Young publication called The EY G20 Entrepreneurship Barometer 2013: Canada, said the cost of starting a business here “is among the lowest in the G20, while entrepreneurs spend fewer hours on their tax affairs than their peers.” It also said that Canadians “benefit from better access to funding.”
Mr. Riding said Canada has numerous great programs, including the Canada Small Business Financing Program that has a loan guarantee, which he called “one of the most effective programs in the world” and “under-recognized.”
Mr. Lim said Canada just needs to better coordinate and integrate support for entrepreneurs.
“If the money is somewhere out there and the policies are somewhere out there, but if these entrepreneurs do not know how to get access to that money and take advantage of those programs, then the efficiency is not that high,” said Prof. Lim.
That is something Ms. Deans hears as well. She said many young people she has met have told her that the support system is fragmented.
“I think the big challenge to banks and government and organizations like ours is how do we knit what we do together so that a young person is able to find the information and do something with it really easily,” said Ms. Deans.
She said there is a lack of entrepreneurial culture in Canada, which the government is trying to address.
“When we went across the country and we did 11 roundtables, we went to so many places where people said, ‘My parents, my community, my school—everybody was either neutral about me becoming an entrepreneur or actually negative,’” said Ms. Deans.
“There are a lot a lot of people who, growing up in Canada, with people telling them ‘That’s the last thing you want to do.’”
She said the culture is starting to change with the popularity of things like CBC’s Dragons Den.
Neither Prof. Lim nor Prof. Riding buy into the argument that Canada lacks entrepreneurial spirit.
Prof. Riding noted that the University of Ottawa is starting a new Entrepreneurial Hub that aims to promote entrepreneurship across all faculties and schools.
“We’re staffing it up as we speak,” he said.
Prof. Lim said compared to the U.S. we may be less entrepreneurial, but we are not far behind, when compared to other countries.
He said Canada does have more of a culture of co-operation rather than competition, like the U.S.
“We are, in general, more friendly. And I guess we could say we are more collaborative than competitive. I mean we all want to live together, instead of fiercely competing against your neighbour to have a little bigger house and drive a little better car,” said Prof. Lim.
is something that attracts some businesses, like Mighty Cast, a company that was recently profiled as a Canadian Innovation Exchange Top 20 company. The company moved from San Francisco to Montreal.
“In my opinion, building a start-up company—it’s much easier to do in Montreal,” said Adam Adelman, co-founder and CEO of Mighty Cast.
“There’s a lot of talent, there’s a lot of technical and creative talent, there’s a lot of government support. And it’s a much more collaborative environment here than the Bay Area. It’s much more competitive in the Bay Area,” said Mr. Adelman.
Prof. Lim said that Canadian culture can sometimes not play out well for business. As an example he said sometimes you may think two venture capital companies may be competing. “And then suddenly they make an offer together,” which translates into low valuation, said Prof. Lim.
He said Canada could improve on harnessing innovation from universities, something the U.S. does much better.
That was also a point Prof. Riding made as well. “Governments have been promoting the idea of innovation, which is an extremely important component of entrepreneurship.” But he said, “by comparison, there has been less emphasis on the development of knowledge that takes those innovations to market.
“The commercialization aspect, relatively speaking, is being neglected.”
Prof. Lim said when entrepreneurs are asked if they feel supported typically the answer is no, despite all the international reports saying they are.
The Hill Times
The Hill-Times | Ottawa, Ontario