A recent study by the Royal Bank of Canada showed that fewer younger Canadians want to be their own bosses. They would rather have a 9-5 job that would pay them than having to hustle on their own. The decline in self-employment can be blamed on soaring standards of living and the uncertainty brought about by a global pandemic.
Why is Entrepreneurship Down?
Canada has a wealth of programs and educational institutes dedicated to grooming a generation of people to start businesses. CBC’s TV program Dragon’s Den, for example, specializes in helping young entrepreneurs start their own business.
Each time the program airs, entrepreneurs across Canada can pitch their ideas to a panel of dedicated business moguls to convince them of their project. If they win, they get funding and support to launch their business. That’s not to undermine the variety of college and university courses dedicated to educating young people on the ethics of starting a business.
With so many options available, many might wonder why fewer Canadians are choosing to become entrepreneurs. A report by the Global Entrepreneurship Monitor says that 14 per cent of Canada’s population has entrepreneurial aspirations. Although that’s a sizeable margin of the population, more Canadians are turning down the opportunity to become entrepreneurs. If you have ever wondered why, consider a few reasons.
Strong Labour Market
The pandemic has taken a toll on the economy; nevertheless, with the economy gradually resurging, the labour market in Canada is proving to be tougher than before. A higher hourly wage for employees has something to do with it. Many employees working in professional scientific and technical fields earn 20 per cent more per hour than self-employed individuals.
Decreasing Venture Capital Activity
Venture capital is a form of private equity and a type of financing for startups and companies. A report by theFutureEconomy.ca says that Canada’s venture capital deals are declining faster than the global average. With a strong labour market and a decrease in venture capital, it only makes sense that more younger Canadians are not seeking to start their own businesses by becoming entrepreneurs and are looking for greener pastures elsewhere.
Retiring Business Owners
Small businesses are the heart and soul of the Canadian economy in many provinces. In many provinces, the number of Canadian entrepreneurs and small business owners is declining. That poses a threat to the continuity of business and innovation. With fewer people starting a business and no succession plan in place, there are less opportunities for growth, which sees more young people seeking full time jobs.
Can Entrepreneurship be Revived?
Canada’s population is getting older; as more baby boomers retire, it is ever important for young people to start a business. Although that might sound like a formidable challenge, money alone is not the key. Here are a few other strategies the Canadian government can employ to develop the next generation of entrepreneurs.
Create More Opportunities for Newcomers
For many newcomers, the path to starting a business in Canada isn’t easy. The startup visa program is 37 months long; the long wait time hinders new entrepreneurs from taking action. Reducing the wait time will create more jobs for new Canadians and fertile grounds for newcomers, offering targeted and accessible support to help them reach their goal.
Legislate the Pension Fund
Legislating the pension fund allows more Canadians to start businesses. When the government understands why people invest abroad and makes the domestic fund appealing, more people will be willing to do business locally. Moreover, when a small portion of the investment fund is dedicated to start-ups, this increases growth opportunities locally.
Encourage Research and Development
The Canadian government needs to invest in new and existing businesses by encouraging research and development, this provides potential growth opportunities for entrepreneurs. When governments create navigable pathways for entrepreneurs to develop new products and services, more entrepreneurs will consider starting a business.
Although Canada is seeing a decline in the number of entrepreneurs due to its aging population, rising cost of living, and structure of the economy, the problem cannot be ignored. After all, any healthy economy relies on entrepreneurship to create job opportunities and achieve economic growth!
David Messiha | Staff Writer
