I often find myself reading long reports such as The GEM Global Entrepreneur Monitor in order to gain insight into markets I am working in – especially if it is an industry I am not familiar with or I am looking for a need not currently being be met. As the online marketing and community manager for a business centre, entrepreneurs are an important target audience for most if not all of Telsec’s services.
This yearly report is based upon over 16 years of data consisting of 200,000+ interviews a year. The GEM website provides more information about the report including:
“GEM began in 1999 as a joint project between Babson College (USA) and London Business School (UK). The aim was to consider why some countries are more ‘entrepreneurial’ than others. Sixteen years on, GEM is the richest resource of information on the subject, publishing a range of global, national and ‘special topic’ reports on an annual basis.”
The Canadian GEM Global Entrepreneur Monitor consists of 70+ pages of information providing insights into entrepreneurial activity in Canada. Though there are over 100 countries in the study, the Canadian report compares the Canadian Data to the G7 countries of Singapore and Norway. Norway is interesting in that it is, to my knowledge, the only European country where natural resource extraction is a large part of GDP – making it most suitable for comparing to Canada and Australia.
One of the more interesting insights I gained from this report is that, for the most part, Canadians are very close to the United States as far as environment and participation. My belief has always been that Canadians were more risk adverse than Americans, and for that matter most countries. The conservative Canadian banking system is likely a direct result of this characteristic. Our more conservative system was largely responsible for Canadian Banks not being affected by the worldwide upheaval caused by less strict banking regulations in many countries.
I would argue that for most of the 20+ years I’ve been doing work on the internet, the banks impeded the growth of Canadian e-commerce companies due to ancient criteria for merchant accounts. Not many start-ups or small businesses can afford the $10,000 cash bond that was required (or seemed so whenever I or anyone I knew applied) for a merchant account. The only reason that this changed was because more aggressive processing companies have finally provided competition that does not require the merchant account holder to saddle all risk on internet transactions.
Two measurements that are often seen in the report are TEA (Total Entrepreneurial Activity) and EEA (Entrepreneurial Employee Activity). These are metrics used to quantify the entrepreneurial rate in the jurisdiction. The difference between the two is that TEA is a rate for individual entrepreneurs and EEA is a rate for entrepreneurial activity within a company. Canadians are less likely to be entrepreneurial on behalf of the company they work for. In my opinion, that comes down to Canadians being more averse to risk as well as less receptive management.
Another interesting insight from this report:
“The results for the EEA rate confirm once more a widely remarked concern in Canada – a failure of innovation and its relation to lagging productivity. Both innovative activity and the adoption of ‘embedded innovation’ in the form of the adoption of the latest technology are weak.”
In my capacity here at Telsec, and my experience with marketing technology services (web development and marketing), I agree that this is likely one of the biggest hurdles Canada needs to get over. One example of this is in 2012 I was updating a local Toronto printer parts and service website which included a list of other companies offering the same services. I was astonished that, of the 9 companies listed, only 3 had websites – and one did not even have email! Considering that Canadians are among some of the heaviest users of the internet, it seems like a big opportunity is being missed.
In conclusion, it seems from this report that the entrepreneurial spirit is alive and well in Canada! Canadian entrepreneurs may be a little slow on the uptake of new technologies, but it is not a laggard in developing innovative products and distributing them worldwide – which is obviously good for the future growth of the country.