Entrepreneurship, Innovation, Growth The Gem

Description
During this brief description in regard to entrepreneurship, innovation, growth the gem.

2
0
1
4
Canada
Driving wealth creation &
social development in
GEM Canada Report 2014 GEM Canada Report 2014
Cooper H Langford
Peter Josty
2014 GEM CANADA
NATIONAL REPORT
GEM Canada Report 2014
Executive Summary .................................................................................... 1
Recommendations ...................................................................................... 5
1. Introduction ......................................................................................... 7
1.1. Why Entrepreneurship? ............................................................................. 7
Canada, Entrepreneurship and GEM .................................................. 7
The Nature and Role of Entrepreneurship ......................................... 7
1.2. Why GEM Canada? .................................................................................... 9
1.3. Entrepreneurship, Innovation, Growth – The GEM Model .................... 10
1.4. Research Methodology and Scope ........................................................... 13
Adult Population Survey (APS) ................................................................ 13
National Expert Survey (NES) ................................................................. 14
Standard Socioeconomic Data ................................................................. 14
2. The Practice of Entrepreneurship in Canada in 2014 ...... 15
2.1. Attitudes .................................................................................................... 15
Attitudes Infuence Entrepreneurship .............................................. 15
Perceptions of Opportunity and Capacity in the
General Adult Population .................................................................. 16
2.2. Activity ...................................................................................................... 18
2.3. Aspirations ............................................................................................... 30
3. Entrepreneurs in the Economy ................................................. 34
3.1. Sectors ...................................................................................................... 35
3.2. Technology................................................................................................ 37
3.3. High Level Job Creation........................................................................... 38
4. Entrepreneurship Demographics ............................................. 41
4.1. Age ............................................................................................................ 41
4.2. Education ................................................................................................. 42
4.3. Gender ...................................................................................................... 44
5. Social Entrepreneurship .............................................................. 46
6. Entrepreneurship by Province .................................................. 48
7. Framework for the Canadian
Entrepreneurship Environment: NES ................................... 50
7.1 Finance ..................................................................................................... 50
7.2 Government Policy and Programs ........................................................... 51
7.3 Education and Training ........................................................................... 54
7.4 R&D Transfer ........................................................................................... 55
7.5 Commercial and Service Infrastructure, Market Operation ................... 56
7.6 Market Dynamics ..................................................................................... 57
7.7 Physical Infrastructure ............................................................................ 58
7.8 Cultural and Social Norms ....................................................................... 59
CONTENTS
i
GEM Canada Report 2014
7.9 Mean Expert Overall Ratings of the Areas of
Framework Conditions ............................................................................ 60
7.10 Open-Ended Comment: Constraints, Facilitating
Factors and Recommendations ................................................................ 61
8. Conclusions and Implications .................................................... 65
Notes ............................................................................................................... 69
GEM Canada Team .................................................................................... 71
About THECIS ............................................................................................. 72
Sponsor Recognition ............................................................................... 73
Report Authors ........................................................................................... 74
Figure 1.1 The GEM Model ........................................................................... 11
Figure 1.2 The Phases of Entrepreneurship ................................................. 13
Figure 2.1 Attitudes Toward Entrepreneurship of the
Total Canadian Pop. Age 18 -99 .................................................. 16
Figure 2.2 Attitudes Among Countries in a Broad Reference Group ........... 17
Figure 2.3 Total 2014 Entrepreneurial Activity in
Canada (Ages 18 – 99) with Breakdown by Gender and
Opportunity vs Necessity Driven ................................................. 19
Figure 2.4 TEA Values for Economies in the
‘Innovation Driven’ Category (18 – 64) ...................................... 20
Figure 2.5 Selected TEA Trends from 2001 t0 2014 .................................... 21
Figure 2.6 TEA Values for Reference Economies and Canada .................... 22
Figure 2.7 TEA Components, Nascent Venture, and ‘Baby Business’;
With Established Businesses and Informal
Investment Rates ......................................................................... 23
Figure 2.8 Motives for Entrepreneurial Activity .......................................... 25
Figure 2.9 Intrapreneurial, EEA, percentages of the total
survey population and of those employed .................................. 26
Figure 2.10 The Stages of Entrepreneurial Activity (% Of Pop.)
in the Reference Countries .......................................................... 28
Figure 2.11 Comparison of Total High 5 Year Job Growth Aspirations ........ 31
Figure 2.12 Comparison of Canada to the US and Australia with
Respect to Uniqueness (no or few Competitors) of
Products and Whether There is a Novel Product/Market
Combination ................................................................................ 32
Figure 2.13 Percentage Share of Customers Outside the Country ................. 33
Figure 3.1 2014 Distribution (as % of TEA) of Initiatives Over
Four Sectors ................................................................................. 35
CONTENTS
ii
LIST OF FIGURES
GEM Canada Report 2014
Figure 3.2 Distribution Over Sectors by Percent of TEA or
EB Respondents .......................................................................... 36
Figure 3.3 Percent of Entrepreneurs Using Recent vs
Older Technology ........................................................................ 38
Figure 4.1 TEA Entrepreneurial Activity Rates (%) in
Each Age Group in the 18-64, Population .................................. 41
Figure 4.2 TEA Rate (% Pop.) by Educational Attainment
Compared to Education Reported by Canadian
Established Business Owners ..................................................... 43
Figure 4.3 Confdence about Starting a Business by
Gender (% of Pop.) ...................................................................... 44
Figure 4.4 TEA by Gender and Necessity vs Opportunity.
Canadian EB Rates are Compared .............................................. 45
Figure 6.1 Early Stage Entrepreneurship (TEA %) by Province .................. 48
Figure 6.2 Intrapreneurship (EEA) by Province .......................................... 49
Figure 7.1 Suffciency of Financial Sources .................................................. 51
Figure 7.2 Government Policy and Programs .............................................. 53
Figure 7.3 R & D Transfer ............................................................................. 56
Figure 7.4 Access To Commercial Services.................................................... 57
Figure 7.5 Market Dynamics for New and Growing Firms........................... 58
Figure 7.6 Mean Expert Rankings of Framework Condition Variables ....... 61
Figure 7.7 Framework Conditions Seen by Experts as Constraining .......... 62
Figure 7.8 Framework Conditons Fostering Entrepreneurship .................. 63
Figure 7.9 Main Areas of Expert Recommendations .................................. 64

Table 1.1 Social, Cultural, Poloitical and Economic Context of
Entrepreneurship ........................................................................ 12
Table 2.1 Attitudes of Seniors...................................................................... 18
Table 2.2 Intrapreneurial Activity............................................................. 29
Table 2.3 Job Creation, now or within 5 years........................................... 30
Table 2.3 Product, market novelty............................................................... 32
Table 3.1 High or medium technology sector (OECD def.)......................... 37
Table 3.2 Individual cases of high job numbers illustrating
maximum ambition) ................................................................... 40
Table 4.1 Share of total national TEA in each age group ........................... 42
Table 4.2 Gender patterns in sectors, use of technology, and in
growth aspirations ....................................................................... 45
Table 5.1 Social entrepreneurship activity ................................................. 46
Table 5.2 Number of workers ...................................................................... 47
LIST OF FIGURES
iii
LIST OF TABLES
GEM Canada Report 2014
1
1.1 Why entrepreneurship? This analysis is designed to enhance
understanding of innovative and productive entrepreneurship that
can promote economic growth, job creation, sustainability, and
quality of life. The ‘ecology’ in which these entrepreneurs operate
is probed.
1.2 Why GEM? Participation in GEM brings Canadian data into a rich
international context of policies and circumstances. Uniquely,
GEM paints a portrait of the individual entrepreneur;attitudes,
activities, and aspirations. In the second year of renewed
Canadian participation, some indications of changes over time can
be discussed.
ATTITUDES
2.1 The Canadian environment and culture for entrepreneurship
is healthy. Entrepreneurship is seen as a good career for which
opportunities exist within the capacities of a large segment of
the population. Entrepreneurial success is widely admired.
Policy for entrepreneurial culture can be more sophisticated,
fostering innovative growth.
ACTIVITY
2.2 Canada is a leader in early stage entrepreneurial activity with a
rate of 13.0, marginally up from 2013. This rate is just behind the
US and equal to Australia. It is well above the remainder of a
reference group that includes the G7 plus Singapore.
- Canadian entrepreneurs report opportunity as their
motivation much more often than necessity.
- Owner/managers of established business over 3.5 years old
represented 9.4% of respondents, also a value higher than
other countries except Australia.
- Intrapreneurship (employee entrepreneurship activity, EEA),
which leads development of a new activity for a principal
employer, is the weak spot in the Canadian profle.
Entrepreneurial activity among the currently employed (not
self-employed) is 7.0%, Canada’s rate is well below the US
or Australia. This is consistent with a number of studies from
EXECUTIVE SUMMARY
GEM Canada Report 2014
2
other points of view that see Canadian frms as weak
innovators lacking an innovation oriented strategy.
- Social entrepreneurship, founding organizations or entities
with social, cultural, or environmental beneft is signifcant
(8.6% of population). Most of these entrepreneurs are not full
time engaged in the social enterprises.
- The stages of entrepreneurship: the entrepreneurial process
proceeds in fve stages, not necessarily linearly. Canada data
are quoted for each as identifed in the year’s survey.
Entrepreneurship begins from intentions (of respondents)
to early stage activity. Some become established businesses
after 3.5 years, and some close (a loss), and some owners sell
to new owners who continue the business (positive outcome).
Both are low in comparison to TEA, and in Canada the two
exit modes are similarly important. The excess of
start-ups over established businesses reminds us of the risks
of entrepreneurships.
ASPIRATIONS
2.3 Signals of productive entrepreneurship and innovation are found
in a reasonable level of aspirations for growth and frequent
reporting of aspirations to introduce new products and to export.
ENTREPRENEURSHIP IN THE ECONOMY
3.1 The new frms are classifed in four sectors: extractive (e.g.
agriculture, mining), transformative (e.g. manufacturing),
business oriented services and consumer oriented services.
Canada has a lower share of frms in consumer services and a
larger share in business oriented services than the reference group
of countries. This suggests a sector profle more likely to
experience growth and produce innovations.
3.3 New frms oriented to new markets and new products make an
up a signifcant share of TEA, indicating innovative activity. New
frms dependent on high or medium technology are not prominent
anywhere in the G7. The Canadian numbers are slightly better
than Australian and comparable to US numbers.
EXECUTIVE SUMMARY
GEM Canada Report 2014
3
3.4 Case studies of ambitions for high job growth are reported to
illustrate that important, but rare, high impact phenomenon. One
of two project growth to the two thousand level.
DEMOGRAPHICS
4.1 The age distribution of Canadian early stage entrepreneurship
is similar to the reference countries with a healthy rate of
entrepreneurship among the younger cohorts. This year the
peak for Canadian entrepreneurship has moved up to the 45 –
64 age group. As with other countries, there is a decline in the 55-
64 age group. Seniors (not surveyed in other countries) have a
low rate, but entrepreneurship does continue to be observed past
age seventy. With increase of senior populations, this category
should be tracked in future.
4.2 Education attainment of early stage entrepreneur respondents
varies moderately from a respectable share in the ‘some secondary’
to somewhat less for ‘secondary diploma’. It rises with education,
with a peak among those with post graduate experience. It is
interesting that the frequency of the established business owner/
manager role increased smoothly with increasing education.
4.3 TEA by gender was mentioned above. The ratio of male to female
(a bit more than 3/2) entrepreneurs is little changed from 2013.
Sector data show women are more active in consumer related
services than men. Initiatives are needed to broaden the
opportunities for women. For men the lead sector is business
oriented services.
ENTREPRENEURSHIP IN SELECTED PROVINCES
There is signifcant variation among provinces. Alberta reports the
highest TEA and Quebec the highest intrapreneur, EEA, rate.
EXECUTIVE SUMMARY
GEM Canada Report 2014
4
THE FRAMEWORK CONDITIONS FOR
ENTREPRENEURSHIP IN CANADA
The experts surveyed evaluated eighteen themes with four or more
statements to apprise in each on a fve point scale from ‘completely
true’ (5) to ‘completely false’ (o). Each statement characterized a
condition favourable to entrepreneurship. Scores above three suggest
conditions in Canada are acceptable. Scores below three identify
problems. Scores for each of the major areas of framework condition
are shown in the fgure described fully in Chapter 7.

FINAL CONSIDERATIONS
See the recommendations on the following page.
EXECUTIVE SUMMARY
5.0
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0
P
h
y
s
.

i
n
f
r
a
P
r
o
f

C
o
m
m

i
n
f
r
a
C
u
l
t

S
o
c

n
o
r
m
s
P
o
s
t

S
e
c
.

E
d
u
c
.
F
i
n
a
n
c
e

I
n
t

M
k
t

D
y
n

B
a
r
r
i
e
r
G
o
v
t

p
r
i
o
r

s
u
p

b
u
r
G
o
v
t

p
r
o
g
r
a
m
s
R
&
D

t
r
a
n
s
f
e
r
E
d
u
c

p
r
i
m

s
e
c
I
n
t

m
k
t

d
y
n
a
m
i
c
GEM Canada Report 2014
5
Innovation. The low rate of initiatives by entrepreneurial
employees compared to peer countries is the major weakness
revealed in the population survey data. This is consistent
with studies that suggest larger Canadian frms do not adopt
innovation oriented business strategies. As Mazzucato
14
.
has shown, transformative innovation requires public sector
acceptance of leading risks, as has been done in Canada for
oil sands technology and aerospace. In Canada’s present
circumstances, major government initiatives for the growing
Canadian green technology sector are an opportunity at federal
and provincial levels.
Women entrepreneurs. Current data suggest no increased
share in early stage entrepreneurship by women. Efforts
should take into account that sector data suggests there may
already be more women entrepreneurs active in consumer
oriented services than men. Much of the gender gap may be
accounted for by lower rates of entry to sectors other than
consumer services. Measures to support women entrepreneurs
should remain a high priority. Greater breadth of Government
programs, illustrated by the federal Business Development
Bank and the regional economic development agencies, need
support for their mentoring activities and the capacity to
substantially assist scalable initiatives by women entrepreneurs.
Entrepreneurship education. Interest in education for
entrepreneurship appears to be growing. Expert opinion is
sceptical, and still emphasizes more attention. The population
survey indicates a high level of confdence in having the
knowledge to start a frm. The attitude data suggests the
actions need not be oriented to increasing the attractions of
entrepreneurship. Indeed Canada’s TEA is high. However, the
expressed confdence may refect lack of education. The low
rates of employee entrepreneurship point to the need for a focus
on creative entrepreneurial thinking applicable within frms
RECOMMENDATIONS
GEM Canada Report 2014
6
and in broad social settings, going beyond business education
that equates entrepreneurship with new venture start-up.
Culture. As far as willingness to start-up is concerned,
Canada has a strong entrepreneurial culture, still experts have
concerns. As the recent OECD studies
12,22
show, a relatively
small fraction of start-ups account of most of growth and a
substantial number of start-ups do not survive. It is hard to
pick winners, but as Shane
19
argues it is easier to identify those
initiatives without growth aspirations. Support needs to be
directed to scalable initiatives.
RECOMMENDATIONS
‘NSTEP is a non-proft registered charity that stands for Nutrition
Students Teachers Exercising with Parents. Like our name says,
our goal is to get students, teachers, AND parents involved in
being active and eating healthy, nutritious foods! Our mission is
to work with the whole school community to LEARN how to live a
healthy, happy life, starting
with ‘NSTEP EAT WALK LIVE!
Deb Hymers,
BHE (Foods and Nutrition),
DipEd., MBA
Social preneur
GEM Canada Report 2014
7
1.1. WHY ENTREPRENEURSHIP?
CANADA, ENTREPRENEURSHIP AND GEM
The concerns over growth and for employment that have been
expressed in GEM reports over the years are certainly as or more
relevant now during a tepid recovery. To these two, we must
add concerns about sustainability and quality of life
1
. Broad
and convincing evidence
2
shows that the scope and character of
entrepreneurship strongly infuences all four of these goals for Canada.
As was the case in the 2013 report, the results of this GEM survey
document the fact that attitudes among a majority of Canadians remain
quite favourable to entrepreneurs. It is not necessary to persuade
Canadians that entrepreneurship is a good career or that its risks
are insurmountable. The focus of policy must be on quality growth
oriented entrepreneurship that can promote:
• Job creation,
• Sustainability,
• Economic growth,
• ...and, in consequence, Quality of life.
There can be little doubt that the present uncertain economic situation
prioritizes implementation of evidence based entrepreneurship policy.
As well, future development (its extent and quality) requires attention
to a truly Canadian innovation policy. Finally, it is important to
acknowledge that in Canada; ‘intrapreneurship’ initiatives inside our
large and medium frms as well as social entrepreneurship to build our
communities are a priority too, and may be the weak point.
THE NATURE AND ROLE OF ENTREPRENEURSHIP
Entrepreneurship is defned in the GEM context as:
…“any attempt at new business or new venture creation, such
as self-employment, a new business organisation, or the
expansion of an existing business, by an individual, a team of
individuals, or an established business”
3
(p.9).
1. INTRODUCTION
There can be little doubt
that the present uncertain
economic situation
prioritizes implementation
of evidence based
entrepreneurship policy. As
well, future development (its
extent and quality) requires
attention to a truly Canadian
innovation policy.
GEM Canada Report 2014
8
The GEM defnition includes at least the following four areas of activity
that Steve Blank calls the ‘four pathways’ of entrepreneurship
4
:
• Small business
• Scalable business
• Intrapreneurship
• Social entrepreneurship
The frst two are treated together in this report with emphasis on
the urge to grow. The latter two are treated in separate sections on
employee entrepreneurs and social entrepreneurs. The goal all of these
processes is creation of value as emphasized in an OECD framework
5
.
The defnition is expansive enough to include the champions of
all types of innovation, but a special place is reserved for those
entrepreneurs who create new establishments, businesses or other
ventures with prospects for growth, job creation, and impact.
It is well known that we live in a knowledge economy. Knowledge is
the economic good that does not degrade in use and few organizations
can effectively realise the full economic return on all of the knowledge
they possess
6
. This leads to the ‘spillovers’ that, for example, create
productive clustering for which the archetype is Silicon Valley. Among
the most productive forms of entrepreneurship is turning ‘spillover’
knowledge into breakthrough new ventures that escape and go beyond
the constraint on use of all the knowledge imposed on incumbent large
frms who must attend to ‘core businesses.
As the infuential economist, William Baumol, pointed out
7
, there
are three types of entrepreneurship; productive, unproductive and
destructive. Productive entrepreneurship is that which has
growth potential and produces signifcant innovations. It yields
growth and quality of life beneft as well as jobs. Unproductive
entrepreneurship simply re-shuffes the locus of accumulation
of money. It includes, for example, opening imitative consumer
services businesses. Still, net employment may increase. Destructive
entrepreneurship, such as criminal inventiveness, is outside the
scope of GEM study. There is no rigid line between productive and
unproductive types; more realistically, it is a continuum with these as
the end points. Nevertheless, the main interest in entrepreneurship
1. INTRODUCTION
GEM Canada Report 2014
9
study is the productive entrepreneurial process, which is the main
driver of long-term transformative growth. Much interest centres
on entrepreneurship and innovation. Much innovation analysis has
focused attention on R&D and technology. Yet it is clear that not all
innovation is derived from technical inventiveness. Think of Starbuck’s
coffee shops or the introduction of ‘Medicare’. In fact, analysis of
innovation shows that every success depends in large measure on non-
technical social factors. Hall and Martin
8
point out that an innovation
must pass four hurdles: technical feasibility, commercial viability,
organizational capability, and social acceptability (not in a temporal
sequence). They argue that uncertainty increases as we pass along this
value-added chain from left to right. An entrepreneurial venture must
succeed at each stage. In most cases, the major challenges arise after
technical feasibility has been established.
1.2. WHY GEM CANADA?
First and foremost GEM is a global project. Participation in GEM
brings Canadian activity into a rich context of data from countries
covering a full spectrum of circumstances and policies. The uniqueness
of GEM also lies in the focus on the attitudes, aspirations and activity
of individual entrepreneurs, now recorded in a 15 year time series of
adult population surveys (APS). There is no comparable source of such
intimate information. Every entrepreneur is a potential innovator,
since all initiatives grow out of some new idea. Most innovation
literature offers a frm based perspective. GEM brings the individual
initiator back into focus. The latest addition to GEM is questions
addresses activity within frms and identifes leaders in developing new
activities for a principal employer. This is designated intrapreneurship,
or employee entrepreneurship. It plays a large role in the creativity and
growth of established frms, especially larger ones.
As a complement, the framework environment that infuences and
conditions entrepreneurial activity is assessed through the national
panel of experts in the National Experts Survey (NES).
1. INTRODUCTION
Entrepreneurship
is a concrete way to
engage and enrich our
communities.

Raff Paquin, Entrepreneur
GEM Canada Report 2014
10
1.3. ENTREPRENEURSHIP, INNOVATION,
GROWTH – THE GEM MODEL
9
The interpretation of entrepreneurship from the central GEM
perspective focuses on the individual entrepreneur with personal
aspirations, capabilities and opportunities against an alternate
perspective focusing on human capital, policy, markets, fnance
and culture. However, the GEM project regards entrepreneurship
as a process in a complex ecosystem and examines individual
entrepreneurs and ventures in the context of this ecosystem and
the social factors that shape the responses of the entrepreneurially
oriented. The GEM model of the entrepreneur’s ecosystem is shown in
Figure 1.1. In the context of the model, Box 1 summarizes the core of
the GEM Adult Population Survey (APS)
Conceptual framework of the GEM Adult Population Survey.
The three components of the GEM Conceptual Framework and the assumed
relationships among them are at the heart of the GEM contribution to a better
understanding of entrepreneurial energy in any economy. The analysis is
based on the following data:
• Individual attributes – which refect perceptions about opportunities,
capabilities to act entrepreneurially, entrepreneurial intentions and
fear of failure;
• Social values – which refect how the society values entrepreneurial
behavior, and
• Entrepreneurial indicators – different forms of entrepreneurial activity
along the life cycle of a venture
(Source: GEM Global Report 2014)
1. INTRODUCTION
GEM Canada Report 2014
11
Social values, individual attributes and entrepreneurial activity
(Source: GEM Global Report 2014).

Figure 1.1 The GEM Model.
GEM classifes economies that participate in the study as factor driven,
effciency driven, and innovation driven. The categories are derived
from the World Economic Forum (WEF) Global Competitiveness
Index which categorizes three phases of economic development based
on GDP per capita, and the export share represented by primary
goods. Canada is in the innovative economy classifcation, exhibiting
suffcient reliance on business sophistication and innovation despite
its engagement with basic resources. Businesses in an innovation
driven economy are more knowledge intensive and the service sector
fgures more prominently in the economy. Entrepreneurship and
innovation factors play a more dominant role in the development of
these economies, but they still rely on a healthy profle of the basic
requirements and effciency enhancing factors.
1. INTRODUCTION 1. INTRODUCTION
+
–
+
–
+
–
+
–
+
–
+
–
GEM Canada Report 2014
12
Table 1.1 Social, Cultural, Political, and
Economic Context of Entrepreneurship.
(Source: GEM Global Report, 2014)

Beyond the structural aspects, The GEM model also views
entrepreneurship as a process occurring over different phases from
intention to start, to just starting, to running new or established
enterprises, and even to exit and discontinuance (not the same
parameter as business failure). Given variable contexts and conditions,
it is not inevitable that any one phase leads linearly to the next. Figure
1.2 shows the phases of entrepreneurship. In exploring the early
phases, the GEM project assembles data not available from business
statistics.

GEM Canada Report 2014
13
Figure 1.2 The phases of entrepreneurship.
(source: The 2014 GEM Global Report)
1.4. RESEARCH METHODOLOGY AND SCOPE
The GEM project begins by grouping participating countries into three
categories identifed by the World Economic Forum (WEF). These are
factor driven economies, effciency driven economies and innovation
driven economies. The least developed, factor driven, economies
deliver the highest rates of entrepreneurship with the largest fraction
associated with necessity driven activity, alternatives for earning a
living being scarce. The effciency based economies are intermediate
and the innovation based (knowledge) economies exhibit the overall
lowest entrepreneurship rates, but with the values dominated by
opportunity driven entrepreneurship, where attractive novel economic
niches are recognized.
ADULT POPULATION SURVEY (APS)
Using a telephone survey, an independent polling frm randomly
selected adults between the ages of 18 and 99. Their responses to a
series of detailed questions, phrased in everyday language, that are
used throughout the GEM international entrepreneurship project, were
solicited from interviewees. These are used to assess entrepreneurial
attitudes, activities, and aspirations of the national population.
They provide a profle of a representative cross section of the adult
populations, balanced for age and gender distribution. For analysis,
1. INTRODUCTION
GEM Canada Report 2014
14
the sample is weighted for age and gender to standard Canadian
demographic data. Where the sample size in a province was smaller
than required for the standard set for statistical signifcance, provincial
samples were augmented in the participating provinces.
NATIONAL EXPERT SURVEY
National Expert survey (NES) themes are specifed by GEM: fnance,
policy, government programs, education and training, technology
transfer, support infrastructure, and wider society/culture felds. The
questionnaire presented a series of statements refecting the GEM
perspective on conditions supporting entrepreneurship. The experts
are asked to estimate the degree to which each is true for Canada. The
fnal section solicits open ended responses, which are coded to nine
categories. The questions cover the nine major framework areas:
• Financing, governmental policies,
• Governmental programs,
• Education and training,
• Research and development transfer,
• Commercial infrastructure,
• Internal market openness,
• Physical infrastructure and
• Cultural and social norms.
STANDARD SOCIOECONOMIC DATA
Basic data were obtained from Statistics Canada and OECD
publications. Several other international and national agencies also
sponsored studies of relevance. These studies are cited in the report
where information is drawn from them.

1. INTRODUCTION
GEM Canada Report 2014
15
The key indicators from the GEM survey probe:
• Entrepreneurial Attitudes
(How strong is the common perception in the general population
of a culture of entrepreneurship?)
• Entrepreneurial Activity
(How much early stage activity is occurring in the general
population?)
• Entrepreneurial Aspiration
(What do these entrepreneurs seek to achieve?)
The primary indicators for these categories paint a portrait that is
unique to the GEM methodology of the individual entrepreneur acting
in the community.
2.1. ATTITUDES
ATTITUDES INFLUENCE ENTREPRENEURSHIP
For any policy designed to support highly productive entrepreneurship,
impact is hard to measure. Yet it is clear that some of the most
important policy outcomes depend on attitudes and mind sets in the
general population
10
. A key policy goal for all jurisdictions is to foster
a culture of entrepreneurship and innovation through informing,
training, and educating. GEM provides a variety of perspectives
on the success of such policy through questions, both to the entire
adult population and specifcally to the entrepreneurially oriented
themselves. This entrepreneurial culture shapes the challenges faced
by all entrepreneurs, both the crucial productive entrepreneurs and
those other entrepreneurs who also contribute to activity and job
creation. GEM reports the public perception of entrepreneurs’ hopes,
struggles and successes.
2. THE PRACTICE OF
ENTREPRENEURSHIP
IN CANADA IN 2014
This entrepreneurial culture
shapes the challenges faced
by all entrepreneurs, both
the crucial productive
entrepreneurs and those
other entrepreneurs who also
contribute to activity and job
creation.
GEM Canada Report 2014
16
PERCEPTIONS OF OPPORTUNITY AND CAPACITY IN
THE GENERAL ADULT POPULATION
The strength of an entrepreneurial culture is refected by how
optimistic the general population is about entrepreneurship. Four
questions appraise the perception of capacity for entrepreneurship.
(Abbreviations used in fgures follow each question.)
Have you met an entrepreneur in the last two years? (know ent)
Do you think there is a good opportunity to start a business in the
next six months? (opp 6 mos)
Do you have the knowledge and skill to start a business? (know and
skill)
Would fear of failure inhibit you from starting a business? (fear fail)
These data are complemented by responses that indicate how
entrepreneurs are regarded.
Is entrepreneurship a good career choice? (good career)
Are successful entrepreneurs highly regarded? (suc respected)
Does entrepreneurship receive good media coverage? (good media)
In Figure 2.1 the affrmative answers to these questions are reported
for the entire Canadian sample, age 18–99. In Figure 2.2 Canadian
public attitudes are compared with a reference group of comparable
countries.

Figure 2.1 Attitudes toward entrepreneurship of the
total Canadian pop. age 18 -99.
2. THE PRACTICE OF
ENTREPRENEURSHIP
IN CANADA IN 2014
GEM Canada Report 2014
17
The Canadian results can be put in international perspective if
attention is restricted to the 18 – 64 age groups used for other
countries. The reference group is from the G7 plus Norway (as resource
based), Australia, and Singapore (as a next high TEA jurisdiction).
Figure 2.2 shows the above variables compared in this group (sample
ages 18-64).
Figure 2.2 Attitudes among countries in a broad reference group.
Probably the frst aspect to remark is the parallel between Australia
and Canada. This will recur below and make Canada – Australia
comparisons particularly interesting. Canada compares favourably
with the US with somewhat more perception of near term opportunity,
but exhibiting somewhat greater inhibition from fear of failure. The
perception of a high level of respect for successful entrepreneurs
is exhibited across the group. If Canada and the US (followed
closely by Australia) are quite confdent on all of these measures,
Canadians are more optimistic about the short term environment and
Americans show more self-confdence. Overall, public perception of
entrepreneurship is high these countries.
Seniors’ attitudes. Internationally, seniors are excluded. In Canada,
seniors aged 65-99 were included (Fig. 2.1). The sample of seniors is
over four hundred. The attitudes of seniors toward entrepreneurship
were quite positive as shown in Table 2.1.
2. THE PRACTICE OF
ENTREPRENEURSHIP
IN CANADA IN 2014
GEM Canada Report 2014
18
Table 2.1 Attitudes of seniors
Although seniors know fewer entrepreneurs, they see opportunity
similarly to their junior colleagues and have higher confdence in skills
and lower fear of failure. They also hold higher opinions of the career.
2.2. ACTIVITY
The heart of the GEM survey - the indicators that provide key
perspectives on the culture and circumstances of entrepreneurship -
are those where action, with its risks, is reported. These identify the
ongoing level of early stage start-up activity. Comparisons among
countries and trends over time in conjunction with the reports of the
expert survey on framework conditions provide the basic information
for judging outcomes of policy.
The analysis centres on two measures that are combined to head the
tabulations below.
1) The nascent entrepreneurship rate, (the percentage of the
18 -99 age population for Canada (or the 18-64 age population in
international comparisons) who are currently engaged in setting
up a business that has not paid salary, wages or other payments to
owners for more than three months.
2) The new business ownership rate, percentage of the same pair of
age populations who are currently owner-managers of new
businesses that have paid wages, salaries or any other payments to
owners for more than three months but not more than 42 months.
3) These two are combined (counting each individual only once) to
yield an overall indicator, ‘TEA’, the total early stage activity, or
the entrepreneurship rate.
2. THE PRACTICE OF
ENTREPRENEURSHIP
IN CANADA IN 2014
Know Opportunity SU Fear Good Hi Good
entr skills failure career status media
17.1 45.9 45.6 21.2 57.7 73.6 75.3
GEM Canada Report 2014
19
Understanding of TEA is enriched by analysis of: (1) gender, and (2)
opportunity versus necessity as the driver of entrepreneurship. It is
also helpful to compare the early stage entrepreneurship rate to the
population segment that own or manage an established business
in operation for over 42 months. Given the random sample of the
population, these respondents will predominately be owners and/
or managers of small and medium businesses that represent the next
stage for the successful entrepreneurs.
Figure 2.3 shows the Canadian data for the 18–99 population age
group surveyed in the Canada survey. The TEA is composed of nascent
entrepreneurship (9.9%) and new businesses (4.8%) with no double
counting, expressed as a percent of the population. TEA14 represents
this year’s result and Estbus represents the respondents in the survey
who do own/manage businesses over 42 months old. Opportunity vs.
necessity records answer to the question of the primary motivation.
Was the activity stimulated by recognition of an opportunity or was it
from lack of an alternative?
Figure 2.3 Total 2014 entrepreneurial activity in Canada
(% of pop. - ages 18 – 99 ) with breakdown by gender and
opportunity vs necessity driven.
2. THE PRACTICE OF
ENTREPRENEURSHIP
IN CANADA IN 2014
GEM Canada Report 2014
20
Globally, where does Canada’s TEA stand? The quick answer is
that Canada is now very much at the top among innovation driven
economies. The US has been a clear leader in recent years. With
Canada’s return to the GEM survey last year, we now fnd Australia
and Canada in a virtual tie as close second to the US. An overall
international perspective is shown in Figure 2.4 that shows TEA
values for other countries in the innovation driven economy group
1
.
In all international comparisons, the population considered covers the
18–64 age range surveyed in other countries. (We see that this rate is
higher at 13% than the rate when seniors are included (i.e. 11.4%). The
younger population is more active. (Details on age as a variable appear
below.)
Figure 2.4 TEA values for economies
1
in the
‘innovation driven’ category (18 – 64).
Values of TEA do evolve over time. In part these will follow changes in
business climates but such a model would oversimplify. For countries
like Canada, levels of TEA have been rising in the last few years.
The trends from 2001 to 2014 are shown in Figure 2.5 for Canada in
comparison to the US, UK, and Australia. Of course, the interpolation
of Canada data over the 2006 to 2013 gap is the most simplistic model
– linear.

2. THE PRACTICE OF
ENTREPRENEURSHIP
IN CANADA IN 2014
1 A few cases of countries with an admixture of other characteristics are omitted.
GEM Canada Report 2014
21
Figure 2.5 Selected TEA trends from 2001 t0 2014 (18 – 64).
The US continues as a clear leader and we fnd Australia and Canada in
a virtual tie as close second to the US. A useful way of placing Canada
in an international context is to place it in the context of the G7 leading
economies. In addition to the G7, Canada has a ‘near twin’ (as will be
seen in several parameters below) in Australia. In addition, Singapore
is an interesting high TEA economy presenting some contrasts. (Other
resource based economies such as Norway do not reveal many parallels
to Canada.) Elaborated activity data for this reference set of countries
are summarized in Figure 2. 6.

2. THE PRACTICE OF
ENTREPRENEURSHIP
IN CANADA IN 2014
GEM Canada Report 2014
22
Figure 2.6 TEA Values for reference economies and Canada (18 – 64)
The present Canadian TEA rate of 13.0% of the 18-64 population
represents an increase of just less than one percent from the rate of
12.2% in the 2013 survey. The US experienced a similar increase. The
fairly stable 2013 to 2014 results compare to the 8% found in the last
full pre-2013 Canada report from 2003. A key observation in 2003 was
that the women’s entrepreneurship rate was only half that of men it
is now nearly 2/3 (as it was in 2013). The women’s share is similar in
Australia but slightly higher in the US. TEA is reported to be motivated
by opportunity more than necessity by a factor of about fve, as it is in
Australia. The US ratio is larger, where it was smaller last year. (The
errors in small necessity rates render the ratios uncertain.)
The TEA from the US, Canada, Australia and the UK invite comparison
to the Continental economies, Germany (DE), France (FR) and Italy
(IT). Some European commentators have suggested a divide between
the more neo-liberal economic policies of the US, Canada, Australia
2. THE PRACTICE OF
ENTREPRENEURSHIP
IN CANADA IN 2014
GEM Canada Report 2014
23
and the UK compared to those of the continental countries. If this is
valid, the data suggest a more neo-liberal economic culture is more
favourable to the individual entrepreneur, but clear evidence is lacking
to show this links to better overall economic performance
2
.
Further important parameters of the analysis of overall activity include
data about established businesses (those in business more than 42
months), about how TEA breaks down into its two components of
nascent activity (start-up in the past year) and new business (those
in operation but under 42 months old – ‘Babybus’), and about the
extent of informal investment in new businesses (here called angel
investment) , a crucial ingredient for start-up – this rate is dominated
by the key family and friends investors. Data for Canada and the
reference group are shown in Figure 2.7.

Figure 2.7 TEA components, nascent venture, and ‘baby business’; with
established businesses and informal investment rates.
We see that among the two TEA components: start-ups (nascent) of the
current year outnumber the young frms (babybus) that have operated
for less than 3.5 yrs. The data for established businesses (Estbus) are
seen to be systematically below the sum (TEA) of early stage values
recorded above in Figure 2.7.
Informal investors (Angels) are those who have made a personal
investment in the last two years. It is signifcantly less than TEA rates.
2. THE PRACTICE OF
ENTREPRENEURSHIP
IN CANADA IN 2014
2 A possible alternative explanatory factor was noted in 2013. It was the women’s
entrepreneurship rate, but 2014 data do not support this
GEM Canada Report 2014
24
These are predominately the small investors belonging to the critical
friends and family supporters of start-up.
It is interesting that the established business rates in Canada and
Australia are larger than the US rate. As well, the ratio of nascent
activity to young frms is smaller for Australia and Canada than the US.
All this may suggest more effcient survival across the frst transitions.
The lower values for established businesses (representative of
outcomes of past entrepreneurship) reminds us of the precarious
character of entrepreneurial activity. Of course the established
businesses reported here refect start-up over a number of years. A
2014 OECD policy paper on start-up frm dynamics
12
provides data
on the fate of start-up frms after three years. Canadian data for end
years 2004, 2007, and 2010 indicate 22 – 24% not reported (inactive),
62 – 65% in the same size category (e.g. 0 – 9 employees) and 4 or 5%
growing out of their initial size category in those frst three years. .
Tracking the relation between start-up phases and established business
has some bearing on churn in frm dynamics. For example, the high
established business rate in the context of low TEA in Japan suggests
a stable environment. If this is correct, it suggests a higher churn
rate in the US compared to Canada and Australia. The important
informal investor rate is higher in the US than in Canada or Australia.
The numbers involved are small and these differences may not be
signifcant, but it is clear that these rates are higher than those for
Europe or Japan.
A fnal issue informing the drivers of activity concerns motives for
entrepreneurial activity. This is complex. Much entrepreneurship
relates directly to the relation of the entrepreneur to the specifc
attractions of the new activity. The one area susceptible to questions
addressed to all entrepreneurs centres on the economic motives
and the question of independence. Figure 2.8 shows percentage of
entrepreneurs (TEA) who identify maintaining income (maintain),
have motives mixed between opportunity and necessity (mixed),
increasing income (income up), increased independence (independ)
and improvement in one of various dimensions (improve).

2. THE PRACTICE OF
ENTREPRENEURSHIP
IN CANADA IN 2014
GEM Canada Report 2014
25
Figure 2.8 Motives for entrepreneurial activity.
The generalized question around improvement drew agreement from
the highest percentage of entrepreneurs considered in these culturally
related comparators to Canada. The UK is lower than the other three.
Income increase is preferred over independence in all countries except
the UK. Canada also appears stronger on independence. Mixed motives
were not an important response except in the UK. These motive data
provide little insight as to which entrepreneurs are looking toward
innovation or job growth, the scalable productive entrepreneurship
most highly prized.
Intrapreneurship – entrepreneurial employees
GEM has also recently introduced measurement of the parallel
to entrepreneurship that occurs within existing organizations,
new ventures created by employees for their principal employer
– ‘intrapreneurship’. Parallel to TEA the index is entrepreneurial
employee activity, EEA.

2. THE PRACTICE OF
ENTREPRENEURSHIP
IN CANADA IN 2014
GEM Canada Report 2014
26
Figures 2.9 Intrapreneurship, EEA, percentages of the
total survey population and of those employed.
The survey items are based around questions that ask about
development of new activities for your main employer over the last
three years. Figure 2.9 shows data for percentage of respondents who:
(1) report taking a leading role in such development over the three year
period (All), (2) limiting the population to those who are now employed
(Emp) – not self-employed or unemployed, and (3) those who report
this leading role going on currently (Now), and (4) those employed
and active now (Emp. now) Leading countries are the UK, the US and
Australia in the same reference group as used for TEA comparisons.
Canada’s rates are near half of its TEA rates and similar to France,
Germany and Singapore rather than the leaders. If the activity data
suggest no lack of an entrepreneurship culture in Canada, the EEA
data suggest intrapreneurship as the problem area.
Leadership (the individual entrepreneurial act) is not the only role in
frm innovation. In larger companies projects commonly involve teams.
As well, the transition from nascent to young frms has an analogy in
bringing a new idea for an activity in a larger frm to implementation.
Some more detailed data on intrapreneurship are shown in Table 2.2.
The table frst shows what percent of respondents report participation
in developing a new activity within the last three years. (A caution, the
respondent sample is only about 70% of the sample population for the
2. THE PRACTICE OF
ENTREPRENEURSHIP
IN CANADA IN 2014
GEM Canada Report 2014
27
TEA rate and even smaller numbers answered sub-questions.). Next
the percentage reporting that the activity is proceeding now is listed.
The fraction generating the idea (‘intrapreneurs’) is noted. The ratio of
leadership roles to support roles is reported next and fnally the extent
of participation in carrying the new activity forward to implementation
(the parallel to ‘baby business’ status) is recorded. Each of these is
presented in the context of the relevant number of responses. Note
that the base level of involvement in, 19.5% of 1453, or 283 innovation
participants in all roles, does compare favourably with the respondents
classifed as TEA contributors.
Table 2.2 Intrapreneurial activity.
New 3 yr. New now idea 3yr lead/sup implement
# of Responses 1453 195 194 Lead/support 195
% yes or ratio 19.5 67.7 85.1 43%/48% 69.7
The problem of innovation in Canadian frms
The results for the EEA rate confrm 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. A detailed analysis of the problem appeared in 2009 from an
Expert Panel of the Council of Canadian Academies
13
: Innovation
and Business Strategy: Why Canada Falls Short. Interestingly, the
panel identifes business strategy as a major source of weakness. It
is clear that innovation in Canada needs stimulation. A direction is
suggested by the infuential work of Mazzucato
14
who has shown the
importance of government initiative, and acceptance of the major
risks, in transformative innovation. For example she identifes major
government programs critically contributing at several stages to the
eleven transformative technologies that, exploited together, achieved
the smart phone. In Canada an example of this approach was seen
in the government programs that supported the development of the
technology leading to exploitation of the oil sands. At present Canada
has an emerging healthy green technology sector. Active government
stimulus is a promising approach to inducing more innovation oriented
industry strategies.
2. THE PRACTICE OF
ENTREPRENEURSHIP
IN CANADA IN 2014
GEM Canada Report 2014
28
Stages of Entrepreneurship.
The GEM model sees the life cycle of entrepreneurship as comprising
four stages: intention, early stage and new frm, established
business and discontinuance (see introduction.) A ‘snapshot’ of the
relationships among the phases emerges from looking at the activity
in the successive phases that were identifed in the current year
surveys. Five survey variables from the four stages are instructive.
Three of these are new here to this report: Intent (a rather nebulous
stage), and two variables for discontinuance - a positive outcome, exit,
when the owner sells or transfers to a new owner and a negative one,
discontinuance, where the business closes.
• The intention variable asks for intentions to start a business in
the next three years (intent).
• The early stage can be represented by the TEA variable (TEA).
• Established business is measured as those reporting
ownership of a business that has been in operation for more than
42 months with income (EB).
• Discontinuance is measured in two variables: (i) owner exit
with business closure (Disc) and (ii) owner exit with continuance
of the business by others (Exit).

Figure 2.10 The stages of entrepreneurial activity (% of pop.)
in the reference countries.
2. THE PRACTICE OF
ENTREPRENEURSHIP
IN CANADA IN 2014
GEM Canada Report 2014
29
Each of these variables is calculated on the basis of the % of the 18-64
population in 2014 that is active in that stage. Figure 2.10 presents
the successive phases from intention to either closing or transfer
to new owners. (Of course, these are different businesses at each
stage so no answer in the stages of a country column came from the
same interviewees.) The lesser variation from country to country of
the established business rate again underlines the volatility of early
entrepreneurship.
It is qualitatively clear that entrepreneurial intentions and early
stage activity exceed the steady-state value of operating businesses
and the exit rates remind us of the relatively high churn rate for
small businesses. Canada, along with the United States France and
Singapore, display a high rate of intention and early stage activity,
suggesting that an encouraging climate exists for the aspiring
entrepreneur, but these high rates of intention do not appear along
with relatively high rates in other phases as seen for the UK, Germany
and, especially, Japan. This suggests that raising the ratio of surviving
established business (compared to early stage activity) could be a policy
goal for Canada, the US, and Australia. The indication is that a climate
presenting additional diffculties for young frms may exist in these
countries.
The fve year survival rate for small frms has been reported by
Statistics Canada at approximately 50% over several years of data. A
recent OECD study of frm dynamics12. reports that Canadian ‘micro’
frms three years after formation (start-dates 2001, 2004, 2007). A
rough similarity between the ratios of established businesses surveyed
to start-ups of this year seems to be reasonably consistent with the
survival and growth rates data. (The OECD data is based on frm
registries and supporting statistical agency data, in contrast to the
GEM individual interview data.)
2. THE PRACTICE OF
ENTREPRENEURSHIP
IN CANADA IN 2014
Canada, along with the
United States France and
Singapore, display a high
rate of intention and early
stage activity, suggesting
that an encouraging climate
exists for the aspiring
entrepreneur, but these high
rates of intention do not
appear along with relatively
high rates in other phases as
seen for the UK, Germany
and, especially, Japan
GEM Canada Report 2014
30
2.3 ASPIRATIONS
A fnal key aspect of early stage entrepreneurship is the entrepreneur’s
aspirations. This has a great deal to do with the potential for impact
on innovation and employment, i.e. on the question of productive
entrepreneurship. Three areas explore the ambitious intentions for the
new businesses intending growth: what fraction expects substantial job
growth, what fraction will produce new products and expand markets,
and what fraction will export.
Jobs. Is the new business creating jobs now, or expected to create
jobs in its frst fve years? Questions probed include the number of
jobs created and the overall expectation for the next fve years, Basic
Canadian data appear in Table 2.3. Two further questions are used for
some comparisons of Canadian performance: the number expecting
more than 10 jobs and 50% growth in the frst fve years, and the
number expecting job growth greater than 19 jobs within the fve years.
Table 2.3 Job creation, now or within fve years.
Jobs created as % of TEA None 1-5 6-19 20 or more
Currently 31.4 54.6 9.2 4.8
After 5 years expectation 15.4 46.9 20.6 16.7
The data clearly refect some growth aspirations among a majority of
the new frms. Of course, spectacular entrepreneurial successes are a
small fraction of total entrepreneurship. It may be interesting to note
that 5 among 258 respondents even aspire (realistically or not) to job
growth to one thousand or more employees (=10 >19
5yr 5 yr
Female % 6.5 13.9 25.9 53.7 7.3 15.5 0.9
Male % 7.4 25.1 40.6 26.9 8.9 21.7 2.4
The distribution over business sectors of initiatives does show
signifcant gender differences. Female entrepreneurs are less well
represented in the transformative (e.g. Manufacturing) sector and
business services sector, while they are much more prominent in the
consumer services sector. Does this last difference relate to lower job
growth aspirations expressed by the female entrepreneurs?
It can be said that there is no more than a marginal difference in the
propensity to use contemporary technology.

GEM Canada Report 2014
46
Beyond the ‘for proft’ economy there is a great deal of
entrepreneurship in the formation of organizations and initiatives
that are oriented toward social, environmental cultural or community
goals. The entrepreneurs who initiate or manage such activities make
a major contribution to quality of life1, and beyond this intrinsic merit,
play a signifcant role in the environment for productive economic
growth. For example there is substantial research supporting the
idea that quality of life and cultural richness, function as talent
attractors, and play an important role in the economic success of cities.
Social entrepreneurship is an important topic in its own right for
contributions to key goals of sustainability and quality of life but it also
contributes to framework conditions for commercial entrepreneurship.
Table 5.1 provides a frst look at the prevalence and structure of social
entrepreneurship activity.
Table 5.1 Social entrepreneurship activity
SE This In Manager Manage Don’t It’s It’s a It’s
activity Last 12 F/T P/T Manage my P/T Outside
3yr months Daily Job my job
Job
%Yes 8.6 70.5 23.1 55.1 14.1 11.8 26.6 52.9
The table shows that 8.6 percent of respondents are currently engaged
in start-up or management (or ownership) of a social activity. Seventy-
one percent of those active indicate start-up efforts occurred in the
last year, in some cases for a second activity. Management roles
vary as seen in the next three columns and the majority do not have
this activity as a part of their ‘daily job’. Fully a quarter work in the
activity part time and only a minority report it as their daily job. Of the
respondents, 28% reported that the activity, organization or initiative
had provided service or received external funding for more than 3
months compared to 61% answering ‘no’.
The majority of specifc services identifed were focused in a specifc
community and some were for proft businesses with a ‘social’ goal.
Most of the activities were small, but had growth aspirations.
5. SOCIAL
ENTREPRENEURSHIP
GEM Canada Report 2014
47
Table 5.2 shows data on the small current numbers of ‘workers’ (Work
now), not necessarily employees and the distribution of this work to
volunteers and part time workers. (An individual worker may ft in
more than one category.) The last column shows anticipated numbers
of workers in fve years. The mode (most commonly reported number
of workers) and maximum (Max case – There is only a single example
of this number in each column) are shown. Unfortunately, not all
social entrepreneurs responded to these questions about workers. The
maximum number of responses was only 43.
Table 5.2 Numbers of workers
Work now Volunteer Part time in 5 years.
Mode 5 4 3 20
Max 1000 700 100 2500
Fifty three percent report that income to support these activities will
come, at least in part from sale of goods or charges for services. Forty
four percent of respondents report 100% of activity income from these
sales/charges. Only 14% report 20% or less of total income from such
business activity. Respondents were asked to assign points to impact
in the areas of the economic, social or environmental value of the
activities. The median for economic value was 44 points, social value
35 points and environmental value 15 points. An economic focus
is clearly present among the activities encountered. There is some
concern that the economic focus of the majority of questions in the
GEM survey may have infuenced the interpretation of the concept of
social entrepreneurship.
Measuring impacts of social initiatives is important in the
multidimensional domain of social entrepreneurship. Impact of the
activities was being measured in 13% of the reported cases, plans to
measure existed in 34% of cases and 43% had no plans to measure
impact.

5. SOCIAL
ENTREPRENEURSHIP
GEM Canada Report 2014
48
An important characteristic of Canada is that it is a nation of regions.
Economic structure, culture and geography vary widely. Consequently,
an analysis of Canada cannot be complete without some comparative
data for provinces. Figure 7.1 shows the early stage entrepreneurship
rates (TEA) for the fve provinces where the number of entrepreneurs
identifed in the survey was suffcient. The number of signifcant fgures
is adjusted for error estimates. This sample includes one from Atlantic
Canada, two large central Canadian provinces (one French speaking
and one English speaking) and two large Western provinces (one an
interior resource economy and one a coastal resource economy.) The
fgure shows overall TEA values and the rates of male and female
entrepreneurship. The percentage of established businesses (> 3.5
yr. old) is given as a reference point. Alberta, with its oil/gas as lead
industry, has the highest rates followed by BC with the remarkable
characteristic of effective gender parity. (There was a small imbalance,
male > female, in the 2013 data.) The manufacturing centre, Ontario, is
at the national average. Quebec, also a manufacturing centre, and Nova
Scotia, a maritime province, are somewhat below that average.
Figure 6.1 Early stage entrepreneurship (TEA %) by province.
6. ENTREPRENEURSHIP
BY PROVINCE
GEM Canada Report 2014
49
Turning attention to entrepreneurial employees (EEA) – the
intrapreneurs – a different picture emerges. The survey items are based
around questions that ask about development of new activities for your
main employer over the last three years. Figure 6.2 shows data for
percentage of respondents who: (1) report taking a leading role in such
development over a three year period (pop), (2) limiting the population
to those who are presently employed (emp) – not self-employed or
unemployed, and (3) those who report this leading role going on now
(now), and (4) those now employed and active now (emp. now). The
two rates (%) based on the currently employed population are probably
the most revealing. Here the industrial base economies show greater
relative strength with Quebec a leader. Quebec is known for some
technologically advanced sectors, e.g. aerospace. Alberta, with its rapid
recent economic growth, is still high, while Ontario and Nova Scotia
report competitive rates. As with TEA, the largest province, Ontario, is
at the national average. The national Canadian data complete the fgure
for comparison.
Figure 6.2 Intrapreneurship (EEA) by province.
6. ENTREPRENEURSHIP
BY PROVINCE
GEM Canada Report 2014
50
The Canadian framework conditions that create the environment for
entrepreneurship are probed by the National Experts Survey (NES).
Forty-two experts from nine professional perspectives responded
to a series of statements used in the global NES study. These
statements express GEM formulations of circumstances favourable to
entrepreneurship. The experts identify how favourable conditions in
Canada are by rating the statements on a fve point scale:
1. ‘completely false’,
2. ’partially false’,
3. ‘neither true nor false’,
4. ‘partially true’,
5. ‘completely true’.
These are coded on the 1-5 scale. Discussion here will focus on the
means that assume a quasi-continuous underlying variable. Mean
scores above 3 indicate some agreement with the statements. An
alternative view is given by the modes that identify the evaluation of
the statement given by the largest number of experts, a convergent
group within the panel. The survey has been carefully validated for
quantitative signifcance and international comparability. Finally,
the experts provided open ended comments that were coded into
categories.
7.1 FINANCE
Availability of fnance is, of course, critical. The population survey
has provided one possibly positive sign, the relatively high incidence
of informal investing. However this needs to be put in the context of
the combination of equity, debt, and government subsidy IPOs and
venture capital. Questions to experts asked whether each of these was
suffcient to Canadian needs. The score of 3 represents neither true nor
false where 1 represents completely false and 5 completely true. The
mean gives insight on balance of opinion and the mode emphasizes
where a major group is converging. Finance question scores are
summarized in Figure 7.1.
7. FRAMEWORK
FOR THE CANADIAN
ENTREPRENEURSHIP
ENVIRONMENT: NES
GEM Canada Report 2014
51
Figure 7.1 Suffciency of Financial Sources.
In comparison to last year, expert opinion is more positive. Means
are near neutral to slightly positive. Only in the case of Debt and IPO
funding did the largest number of experts make 2 the mode. There is
some doubt as to whether IPO funding is important to frst stage new
frms. The conclusions here should probably be interpreted with an eye
to analysis in the EY G20 Entrepreneurship Barometer
26
which fnds
Canada among the most favourable countries for fnance, with the cost
of starting a business dropping by a factor of two in recent years.
Data from the population survey (APS) includes evidence about
‘business angels’ who have contributed in the last three years to a
venture not their own and not via share or mutual fund purchase. The
participation rate in Canada was 5.5% which compares to 6.1% in the
US and 5.1% in Australia (within standard error of each other). The UK
rate was 2.1 %. These contributions would lie in the private category.
Eighty-six such angels were found in the Canada survey. The median
investment was $15,000 and ten of the 85 invested between $25,000
and $1 million. About 40% had family connections to the entrepreneur
(‘friends and family money’). This picture of angel investing seems
consistent with the expert appraisal of the status of private investment.
7.2 GOVERNMENT POLICY AND PROGRAMS
Government policies were probed on fve aspects:
• that government policies (e.g. procurement) consistently favour
new frms,
7. FRAMEWORK
FOR THE CANADIAN
ENTREPRENEURSHIP
ENVIRONMENT: NES
GEM Canada Report 2014
52
• that the support of new and growing frms is a national, federal
government, high priority,
• that support for new and growing frms are a high priority for
local government,
• that new frms can get required permits and licences in about a
week (timeliness),
• that the amount of taxes is NOT a burden for new and growing
frms.
• Taxes and other regulations are applied in a predictable and
consistent fashion.
Means and modes on the 1-5 scale, 1- completely false, 5 - completely
true, are shown in Figure 7.2 along with data on government programs.
Scores generally lean to the negative side. Only consistency of
regulation receives a mean score tending toward ‘partially true’. For
priority given by local governments, in the Canadian context either
provincial and municipal or both, to new frms receives a mode of
4, ‘partially true’, despite a slightly negative mean, refecting a split
opinion. The experts believe policies such as procurement do not
consistently favour new and growing frms. Issuing permits and
licenses is not seen as timely (in contrast to conclusions drawn in
EY
26
.). This connects to an ongoing government conversation in
Canada about reduction of ‘red tape’. Experts feel reduction should
continue. As to tax levels, the mean near neutral with a mode of 1
identifes a split of opinion. Nineteen respondents chose a degree of
‘false’ and fourteen chose a degree of ‘true’. The split did not depend on
province.
Government policies were probed for six characteristics:
• a wide range of services for new and growing frms can be
obtained through a single agency,
• science parks and incubators provide effective support,
• an adequate number of program for new and growing frms,
• people working in government agencies are competent and
effective in provision of support to new and growing frms,
• those needing government help for a new and growing business
can fnd what they need and,
• programs supporting new and growing frms are effective.
7. FRAMEWORK
FOR THE CANADIAN
ENTREPRENEURSHIP
ENVIRONMENT: NES
The experts believe policies
such as procurement do not
consistently favour new and
growing frms.
GEM Canada Report 2014
53
Provision of effective support for science parks and incubators
is rated ‘partially true’ (4) by the largest number (with a mean of
3.7). Government workers (agents) are similarly judged (mode 4)
‘competent and effective in supporting new and growing frms’ (mean
only 3). The statement, ‘there are an adequate number of government
programs for new and growing frms drew a positive score last year,
but here falls to a neutral mean (3) and a negative mode (2). The
question of satisfying needs draws a low mean and a higher mode
indicating a signifcant split of opinions.
It is worth noting here that the recent Federal Budget offers new
support for small frms in the form of reducing tax rates over the
next few years from 11% to 9% . As well, expanded activity of the
Business Development Bank of Canada (BDC) is foreseen. The BDC
plays an important role in helping Canadian small and medium-sized
enterprises grow and become more competitive, innovate, increase
their effciency and explore new markets, at home and abroad.

Figure 7.2 Government policy and programs.
7. FRAMEWORK
FOR THE CANADIAN
ENTREPRENEURSHIP
ENVIRONMENT: NES
GEM Canada Report 2014
54
7.3 EDUCATION AND TRAINING
The statements presented to experts look to issues about education
and training as appropriate to each level. For the primary and
secondary levels the initial issues are encouragement of creativity
self-suffciency and initiative. The mean score tends to neutral (2.7)
with a positive mode. This is recognized as a commitment of school
systems to independence and creativity. At later stages, introduction
to market economic principles is added. The mean score falls to 2.2
or ‘partially false’. Finally, adequate secondary schools attention
to entrepreneurship and new frm formation is suggested and the
score falls to 2.1 with the most frequent response (mode) at ‘false’ (1).
Clearly, Canadian school systems are not meeting the expectations
GEM proposes in any area beyond basic creative attitudes, self-
suffciency, and initiative. However, these three are central personal
characteristics that may require more early and continuing attention
than do the specifc skills. The core characteristics may provide a good
base for development of entrepreneurial thinking.
At the post-secondary level a distinction is drawn between college
and university programs in general and business and management
education. In the broad domains the statement is that preparation is
adequate for starting up and growing new frms. The mean score has
risen from 2.4 last year to 3.0 and the most common scoring (mode)
is now 4, tending toward ‘partially true’. A similar statement directed
to business and management education receives a slightly better
mean score of 3.3 (mode = 4). Finally, the statement directed toward
professional, continuing and vocational education, draws a mean score
of 3.1. It is notable that, in contrast to last year, over 10% of responses
found this positive statement about post-secondary preparation
‘completely true’ (5).
The standards set by the phrasing of GEM propositions indicate
that low scores require increased focus on entrepreneurial thinking
and entrepreneurship in primary and secondary education, but the
experts appear to recognize the signifcant new initiatives arising in
post-secondary institutions.
7. FRAMEWORK
FOR THE CANADIAN
ENTREPRENEURSHIP
ENVIRONMENT: NES
Clearly, Canadian school
systems are not meeting the
expectations GEM proposes
in any area beyond basic
creative attitudes, self-
suffciency, and initiative.
GEM Canada Report 2014
55
Expert opinion is clear that improvements are necessary, but it
seems important to go beyond the coverage of the GEM propositions.
Policy for entrepreneurship education must be entrepreneurship
for innovation. Moreover it must recognize the importance of social
entrepreneurship, and ‘intrapreneurship’, entrepreneurial employees
within frms. (This last a weak point for Canada according to the
intrapreneurship(EEA) statistics reported above,)
7.4 R&D TRANSFER
R&D transfer policies were probed on fve aspects with fve assertions:
• New Science &Technology (S&T) and other knowledge are
effciently transferred from universities and public research
centres to new and growing frms;
• Growing frms have just as much access to new research and
technology as large established frms;
• New and growing frms can afford latest technology;
• There are adequate government subsidies for new and growing
frms to acquire technology;
• The S&T base effciently supports the creation of world-class new
technology based ventures in at least one area;
• There is good support available for engineers and scientists to
have their ideas commercialized.
The data in Figure 7.3 show signifcantly negative reactions with
respect to the frst four of these propositions. Both public research
centres and larger frms are not judged effcient it at making new
research and technology available to small and growing frms, nor is
the government subsidizing access. These results are consistent with
the low level of use of the latest technology by entrepreneurs surveyed
(see Chap. 3). There is more optimism about Canada’s capacity to
support a world class technology frm and for Canadian scientists and
engineers to commercialize.

7. FRAMEWORK
FOR THE CANADIAN
ENTREPRENEURSHIP
ENVIRONMENT: NES
GEM Canada Report 2014
56
Figure 7.3 R & D Transfer.
7.5 COMMERCIAL AND SERVICE
INFRASTRUCTURE, MARKET OPERATION
In the important area of services and infrastructure, fve needs are
addressed:
• Subcontractors, suppliers, consultants -
- There are enough,
- Small and growing frms can afford them,
- It is easy for small and growing frms to get these support
services;
• It is easy for small and growing frms to get good professional legal
and accounting;
• It is easy for small and growing frms to get good banking.
Experts give positive responses to supply of subcontractors, etc., legal
and accounting, and banking services. There is less confdence about
ease of access to subcontractors, suppliers and consultants and their
affordability, results parallel to last years’. These probably refect the
common lack of resources facing a start-up.

7. FRAMEWORK
FOR THE CANADIAN
ENTREPRENEURSHIP
ENVIRONMENT: NES
GEM Canada Report 2014
57
7. FRAMEWORK
FOR THE CANADIAN
ENTREPRENEURSHIP
ENVIRONMENT: NES
Figure 7.4 Access to commercial services.
7.6 MARKET DYNAMICS
Market structures and market access are major framework factors
infuencing new frms that include volatility, ease and cost of entry
to new markets, barriers from established frms, and the status of
anti-trust (competition) legislation. Dynamics are covered in terms of
market year to year change (volatility) for both consumer markets and
business to business – B2B - markets. Entry involves ease and cost of
entry to new markets. Barriers are those erected by established frms
and those prevented by anti-trust protection. The expert evaluations
are summarized in Figure 7.5. Markets are seen as moderately fexible
and open, with cost of entry and established frm resistance seen as
limiting. These refect only small shifts from last year, with a slight
increase in ease of entry and a lower score for consumer volatility.
This is again an interesting disagreement with data from the EY G20
Entrepreneurship Barometer
26
. that fnds Canadian cost of entry low
and reports a recent sharp decline. Canadian anti-trust protection is
seen as marginally adequate.

GEM Canada Report 2014
58
Figure 7.5 Market dynamics for new and growing frms.
7.7 PHYSICAL INFRASTRUCTURE
Physical infrastructure for new and growing frms is appraised by the
experts’ views of fve statements:
• Physical infrastructures provides good support;
• It is not too expensive to access good communication (phone,
internet, etc.);
• A new frm can get access to communication (iPhone, etc.) in
about a week;
• New and growing frms can afford basic utilities (gas, water,
electricity, etc.);
• New and growing frms can get good access to basic utilities.
Similarly to last year, this is the most favourably rated area. All of these
were found largely true in the Canadian environment with means of
4.2 except good access to utilities at 4.3 modes reached 5 for utility
affordability and access for new and growing frms. This is an area of
strength with evaluation higher than last year’s good rankings. But
the survey did not directly address whether it is easy to access leading
edge communication technology and that may lie behind some of the
reservations expressed.
7. FRAMEWORK
FOR THE CANADIAN
ENTREPRENEURSHIP
ENVIRONMENT: NES
GEM Canada Report 2014
59
7.8 CULTURAL AND SOCIAL NORMS
The fundamentals of Canadian national culture are regarded as
reasonably favourable. Three statements command a reasonable degree
of assent:
• Canadian culture is highly supportive of individual success
achieved through personal effort;
• Canadian culture emphasizes self-suffciency, autonomy and
personal initiative;
• Canadian culture encourages creativity and innovativeness.
For these, mean scores decline from 3.6 for the frst to 3.3 then to
3.0 for the third. The mode is 4 (partially true) for the frst two and 2
(partially false) for the third (creativity and innovativeness). The fourth
proposition is:
• Canadian culture encourages entrepreneurship and
entrepreneurial risk taking.
It receives a more positive score with a mean of 3.3 and mode at 4,
with a mode at 2, ‘partially true’. The fnal proposition in this group
proposes that:
• In Canadian culture, responsibility for managing his or her own
affairs lies with the individual (rather than the collective).
The mean is 3.3 and the mode is 4. A clear split of opinion leads to a
small margin for ‘partly true over ‘partly false’ with a few completely
true responses. This split probably reveals a well- known fault line in
Canadian politics.
The work-life relationship is a second dimension of the social
environment. Do social, political and cultural conditions in Canada
allow harmonization of personal and working life? Experts are divided
(mean 2.7). The idea that labour regulations support this is supported
(mean 3.0).
The related dimensions are whether entrepreneurs’ work and personal
life compares favourably to non-entrepreneurs. The expert diagnosis is
affrmative (means, 3.8 and 3.2).
7. FRAMEWORK
FOR THE CANADIAN
ENTREPRENEURSHIP
ENVIRONMENT: NES
GEM Canada Report 2014
60
7.9 MEAN EXPERT OVERALL RATINGS OF THE
AREAS OF FRAMEWORK CONDITIONS
Beyond the expert appraisal of the detailed framework condition issues
the entrepreneurs face; it is useful to take an overview of the areas and
their relative ratings. GEM defnes twelve groupings of framework
conditions (variables in the above sections) for establishing this profle.
The grouped variables are as follows:
• Financial
• Gov’t policies - concrete
• Gov’t policies – priority, bureaucracy
• Gov’t programs
• Education and training – primary, secondary
• Education and training – post-secondary, vocational
• R&D transfer
• Professional & commercial infrastructure
• Internal market dynamics – summary
• Internal market dynamics – barriers
• Physical infrastructure
• Cultural and social norms (for entrepreneurship)
The ordering of means for these grouped variables are shown in Figure
7.6. As was the case last year, the highest rated framework condition in
Canada is physical infrastructure for the young and growing frms. This
is followed by professional and commercial infrastructure, cultural
and social norms and post-secondary education for entrepreneurship,
and fnance as the ones above the totally neutral score of 3.0. This
represents improvement of the ratings for both post-secondary
education and fnance compared to opinion last year. As was the case
last year, both R&D transfer and Primary and secondary education for
entrepreneurship are ranked low.

7. FRAMEWORK
FOR THE CANADIAN
ENTREPRENEURSHIP
ENVIRONMENT: NES
GEM Canada Report 2014
61
Figure 7.6 Mean expert rankings of framework condition variables.

7.10 OPEN-ENDED COMMENT:
CONSTRAINTS, FACILITATING FACTORS AND
RECOMMENDATIONS.
After completing the structured questions, NES expert respondents
were asked to provide open-ended comments identifying constraints
entrepreneurs face, facilitating factors supporting entrepreneurship,
and their own recommendations for modifcation of framework
conditions. A wide variety of ideas emerged. Their richness cannot
be represented here, but the responses were coded as ftting one of
fourteen topics and the areas of concern can be recognized in the
frequency of mention of each of these topics. In each case, experts
were asked to give three ideas in a priority order of frst in importance
to third. A relatively small number of topics dominated these
responses.
7. FRAMEWORK
FOR THE CANADIAN
ENTREPRENEURSHIP
ENVIRONMENT: NES
GEM Canada Report 2014
62
In the case of constraints on entrepreneurs, fve of the fourteen were
multiply represented. Figure 7.7 presents the number of incidences of
each of these. Despite relatively positive comments above about fnance
available for entrepreneurs, twenty nine comments identifed fnancial
constraints, more of these as the third priority of the expert. Much of
the government role was seen as constraining in twenty two responses,
evenly divided between policy and programs. Limits on education
and training drew nine comments at frst and third priority. Finally
the cultural and social norms faced by entrepreneurs were as limiting
by ffteen, in contrast to the very positive climate reported in the APS
attitudes survey.

Figure 7.7 Framework conditions seen by experts as constraining.
7. FRAMEWORK
FOR THE CANADIAN
ENTREPRENEURSHIP
ENVIRONMENT: NES
GEM Canada Report 2014
63
Figure 7.8 presents the contrasting situation of framework conditions
that foster entrepreneurship in one way or another. Education and
training, R&D transfer, both government policies and programs, and
the cultural and social climate were seen as areas where conditions
could foster entrepreneurship. None of these were areas where the
present conditions were highly rated above. Finding good aspects
in the detailed open comments probably refects the importance
experts attach to the areas. The remaining three were capacity for
entrepreneurship, the economic climate (understandable in 2014), and
commercial and professional infrastructure (which was rated positively
above).
Figure 7.8 Framework conditions fostering entrepreneurship.
7. FRAMEWORK
FOR THE CANADIAN
ENTREPRENEURSHIP
ENVIRONMENT: NES
GEM Canada Report 2014
64
Expert recommendations for policy and action were focused in six
areas, all mentioned above in constraints and/or fostering factors. Not
surprisingly, recommendations directed to government, policy and
programs, led the list. The next area of emphasis was recommendations
related to education and training. Sixteen recommendations related
to fnance were proposed and a few related to the cultural and social
norms, and to capacity for entrepreneurship completing the list of
prominent areas of recommendation. Data are shown in Figure 7.9.
Figure 7.9 Main areas of expert recommendations.
Finally, it may be worth noting that with thirty-six experts and fourteen
areas each expert had the opportunity (not always exercised) to touch
upon almost eight areas in responses to each of the three questions.
Overall, this supported the rich variety of comment.
7. FRAMEWORK
FOR THE CANADIAN
ENTREPRENEURSHIP
ENVIRONMENT: NES
GEM Canada Report 2014
65
CULTURE
In common with reference countries, the APS data continue to
demonstrate wide public recognition of the opportunities for
entrepreneurship, and the capacity (in contrast to expert opinion)
to undertake ventures. Entrepreneurship is seen as a good career
choice and success delivers high social status. There is little reason
for policy to further encourage an overall culture of entrepreneurship.
Rather attention should be directed to high impact ,quality initiatives
encouraging productive entrepreneurship and innovation.
ACTIVITY
In common with the other leaders, the US and Australia, 2014 data
indicate a small, but possibly signifcant, increase in TEA. This overall
level is perhaps as high as is needed in a developed market economy.
However, the TEA includes a higher number of nascent entrepreneurs
than new businesses. The TEA is strongly refecting the highest risk
most vulnerable phase.
FINANCE
Expert opinion suggests that the framework conditions surrounding
fnance are somewhat improved. However, ratings are not high and
expert identify fnance constraints in open ended comment. Finance
remains an important area for policy development, especially in a fuid
era with the emergence of such phenomena as crowd fnancing through
social media.
GOVERNMENT POLICY
Experts offer a variety of suggestions. Perhaps the most important
aspect for policy is assimilation of the consequences of the recent
research
27
showing that governments play a crucial role in accepting the
early phase risks of transformative innovation. For example, programs
at all levels could promote the rapidly emerging green technology
industry in Canada as a transformative sector.
8. CONCLUSIONS AND
IMPLICATIONS
GEM Canada Report 2014
66
EDUCATION
The Canadian education systems, from the earliest levels, are suitably
creativity oriented, but lacking in specifc basic economic education
and introduction to entrepreneurship itself. Encouragement to
entrepreneurship education is a recognized need. An improving expert
appraisal at the post-secondary level may refect a stirring across
Canada to improve university level entrepreneurship education.
However, it is important to realize the overall goals of public policy:
jobs, growth, sustainability and quality of life. Entrepreneurship
education must orient attitudes toward ‘productive entrepreneurship’
(Baumol) and innovation. As Shane
19
has shown, the simple act of
entrepreneurship does not produce positive economic outcomes
in many cases. The weakness of employee entrepreneurship (EEA)
emphasizes the broad signifcance of entrepreneurial thinking.
Thus, the goal for education is fostering an entrepreneurial attitude
supporting productive entrepreneurship whether in founding
innovative frms, engaging in social entrepreneurship or the
entrepreneurial recognition of innovative opportunities in employment
contexts and cultivating skills to develop them. At the post-secondary
level this recommends interdisciplinary initiatives.
INNOVATION
There is a measure of innovation in every entrepreneurial act, an
opportunity has been recognized. However, substantial innovation is
not commonly achieved by frms that remain small. A key indicator
is growth aspiration. It emerged above that a signifcant number of
new initiatives intend job growth, but large job growth is rare and
conclusions based on the small number of respondents with high
growth ambitions are anecdotal at best. Some cases in the data with
high growth ambitions were described above. Beyond this a good share
of TEA respondents indicated products or processes new to all or most
customers. The sector distribution with lesser emphasis on consumer
services (the area where counterproductive entrepreneurship
13
.is
most likely to arise) than the comparable countries suggests activity in
areas favourable for innovation, especially including the “knowledge
intensive business services” (KIBS) sector. The negative aspect is the
8. CONCLUSIONS AND
IMPLICATIONS
The Canadian education
systems, from the earliest
levels, are suitably creativity
oriented, but lacking in
specifc basic economic
education and introduction
to entrepreneurship itself.
GEM Canada Report 2014
67
comparatively low level of entrepreneurial employee activity (EEA).
A key document on innovation in Canada was published in 2013
28
by
the Ottawa based Institute for Science and Public Policy. Developed
by a group led by Richard Hawkins, it was circulated for endorsement
by the majority of leading innovation scholars in Canada. It argues for
uniquely Canadian innovation policy noting:
“We should remember Canada’s great achievements as an
innovative society. Canada became an agricultural superpower
out of soil that Captain Palliser concluded would never grow
anything. The streets of Quebec gave birth to the Cirque du
Soleil, making Canada, of all places, the hub of a global multi-
billion dollar circus arts industry. The humble snowmobile gave
rise to one of the largest civil aviation and public transport
clusters in the world. Canada is one of the world’s largest
exporters of English and French language media content. It has
a thriving biotech sector. It manufactures oils out of [both] sand
and seeds.”
The document reminds us that innovation is not by any means
technology dominated. It also points out the merits of policy focus on
Canada’s geopolitical-economic ecosystem. This should favour policy
attention to initiatives that are ‘sticky’ to the environment and not
simply the internationally ‘hottest’ areas.
RESEARCH AND DEVELOPMENT
Basic R&D is strong as the Council of Canadian Academies study, The
State of Science and Technology in Canada
29
, shows:
With less than 0.5 per cent of the world’s population, Canada
produces 4.1 per cent of the world’s research papers and nearly
5 per cent of the world’s most frequently cited papers.
8. CONCLUSIONS AND
IMPLICATIONS
GEM Canada Report 2014
68
However, Industry Canada’s Science Technology and Innovation
Council
30
takes a more pessimistic view suggesting Canada is ‘treading
water’ with major concerns for business performance of Research and
Development (BERD) as a share of GDP and business investment in
Information and Communications Technologies. The NES experts are
aware of both of these views and generally give a consistent appraisal
of the entrepreneurial situation. Their main points would recommend
action to make science and technology knowledge more readily
available to small growth frms.
CULTURE AND SOCIAL NORMS
There is a curious split. The survey of the general population seems
quite positive about the opportunities, whether entrepreneurship is
a good career, and how it is treated in the media. Nevertheless, some
experts express signifcant reservations while others see aspects of
culture as facilitating factors. This is, perhaps, best understood in
distinguishing types of activity. The positive public attitude is probably
a mix of the sense of opportunity to start a small (local?) business
and admiration of the highly successful ‘celebrity entrepreneurs.
In contrast, expert opinion is more concerned about the climate of
support for a middle ground entrepreneur who is creative even if
not spectacular. Perhaps the best answer to this dichotomy is the
recommendation from Shane
19
. That governments sharpen their focus
on scalable, growth oriented initiatives.
8. CONCLUSIONS AND
IMPLICATIONS
GEM Canada Report 2014
69
1
See How’s Life, OECD, Paris, 2011.
2
van Praag, C. & Versloot, P.H. What is the value of
Entrepreneurship, A Review of Recent Research, Small Business
Economics, 29, 351-383, 2007
3
Bosma, N., Wennekers, S., Amorós, J.E. (2012), Global
Entrepreneurship Monitor 2011 Extended Report; Entrepreneurs
and Entrepreneurial Employees Across the Globe, Global
Entrepreneurship Research Association. P.59
4
Blank S,.http://www.kauffman.org/what-we-do/articles/2013/06/
typecasting-the-entrepreneur. Kauffman Foundation 2011.
5
Ahmad, N. Hoffman, A. (2008), A Framework for Addressing
and Measuring Entrepreneurship, OECD Statistics Working
Papers, 2008/02, OECD Publishing.
http://dx.doi.org/10.1787/243160627270.
6
Audretsch, D., Kielbach, M.C., Lehmann, E. E. Entrepreneurship
and Economic Growth, Oxford University Press, Oxford. 2006.
7
Baumol, W. Entrepreneurship: productive, unproductive, and
destructive. Journal of Business Venturing, (1996) 11(1), 3-22.
8
Hall, J.K., Martin, M.J.C., Disruptive technologies, stakeholders
and the innovation value-added chain: a framework for
evaluating radical technology development. R&D Management
(2005) 35, 3, 273 -284.
9
The discussion in this section relies heavily on the Global
Entrepreneurship Monitor Global Reports for 2013 & 2014.
10
Morrow, C., St Jean. C-A. The power of three, EY Entrepreneurship
Barometer, Canada, 2013http://www.ey.com/Publication,
accessed 14/03/06.
11
Lorenz, E., Lundvall, B-A. (2006), Understanding European
systems of competence building in How European Economies
Learn, Lorenz and Lundvall, eds. Oxford University Press, Oxford.
Ch. 1. P.11
12
Criscuilo,C., Gal,P.N. Meron, C. (2014), The Dynamics of
Employment Growth: New Evidence from 18 Countries, OECD
Science, Technology, and Industry Policy Paper #14. OECD Paris.
13
Council of Canadian Academies, Expert Panel on Business
Innovation in Canada (2009), The State of Science and Technology
in Canada, Council of Canadian Academies, Ottawa.
14
Mazzucato, M., The Entrepreneurial State, Debunking Public vs.
Private Sector Myths, Anthem Press, London, 2012.
15
Statistics Canada Start-up Canada (2013)http://www.startupcan.
ca/wp-content/uploads/2012/01/Statistics-on-Small-Business-in-Canada_
StartupCanada.pdf (accessed 14/03/05).
NOTES
GEM Canada Report 2014
70
16
Schumpeter, J.A., (1934) (new transl. 2008), The Theory of
Economic Development: An Inquiry into Profts Capital, Credit,
Interest and the Business Cycle (translated from the German by
Redvers Opie), New Brunswick (U.S.A) and London (U.K.)
17
Langford, C.H., Wood, J. Jacobson, A. (2005), Evolution and
structure of the Vancouver wireless cluster, in Global networks and
local linkages. D. Wolfe, M. Lucas eds. McGill-Queens Press
Kingston.
18
Phillips P. Webb, G., (20xx), Social dynamics, diversity and
physical infrastructure in creative, innovative communities:
The Saskatoon Case. In Innovation in Urban Economies,
D. Wolfe (ed). University of Toronto Press. P. 269 – 291.
19
Shane, S. Why encouraging more people to become entrepreneurs is
bad public policy, Small Bus. Econ. 33, 141-149, 2009.
20
Alexander, J.W. (1954), The basic-non-basic concept of urban
economic function. Economic Geography, 30(3) 246-261.
21
Muller, E. Zenker, A. (2001), Business services as actors of
knowledge transformation: the role of KIBS in regional and
national innovation systems, Research Policy, 30(9) 1501 – 1516.
22
Bravo-Bosca, A, (2011), A look at business growth and contraction
in Europe, NESTA working paper 11/02 , www.nesta.org
(Accessed 2015 04 23).
23
Desjardins, J. The Naewhals club. www.visualcapitalist.com/narwhal-
club-1-billion dollar canadian-tech-companies.
(Accessed 2015 04 22).
24
Roberts, E.R. Eesley, C. Entrepreneurial Impact: the MIT role,
Kauffman Foundation, 2009.
25
Florida, R. (2102). The rise of the creative class revisited,
Basic Books, New York.
26
EY Entrepreneurship Barometer
27
Mazzucato, M. (2013), The Entrepreneurial State: Debunking
the Public vs. Private Myth in Risk and Innovation: Anthem Press,
London.
28
Hawkins, R.W. et al. (2013), Canada’s Future as an Innovative
Society, A Decalogue of Policy Criteria, USSP, Ottawa, .http://artsites.
uottawa.ca/innovationdecalogue/doc/Decalogue-Endorsement-Edition-
FINAL.pdf. Accessed 14/03/18.
29
Council of Canadian Academies, Expert Panel on the State of Science
and Technology, The State of Science and Technology in Canada,
Ottawa, 2012.
30
Science Technology and Innovation Council, The State of the
Nation – Canada’s Science, Technology, and Innovation System,
Industry Canada, Ottawa, 2012.
GEM Canada Report 2014
71
Peter Josty The Centre for Innovation Studies
Team Leader (THECIS), Calgary
Adam Holbrook Centre for Policy Research on
Deputy Team Leader Science and Technology (CPROST),
Simon Fraser University, Vancouver
Blair Winsor Memorial University,
St John’s, Newfoundland
Jacqueline S. Walsh Memorial University,
Cornerbrook, Newfoundland
Harvey Johnstone Cape Breton University,
Sydney, Nova Scotia
Kevin McKague Cape Breton University,
Sydney, Nova Scotia
Yves Bourgeois University of New Brunswick,
Moncton, New Brunswick
Allison Ramsay University of Prince Edward Island,
Charlottetown, PEI
Étienne St-Jean UQTR, Trois Rivieres, Québec
Charles Davis Ryerson University, Toronto
Nathan Greidanus Asper School of Business
University of Manitoba, Winnipeg.
Chris Street University of Regina;
Regina, Saskatchewan
Cooper Langford University of Calgary,
Calgary, Alberta
Chad Saunders University of Calgary
Calgary, Alberta
Brian Wixted Centre for Policy Research on
Science and Technology (CPROST)
Simon Fraser University, Vancouver
GEM CANADA TEAM
GEM Canada Report 2014
72
THECIS (The Centre for Innovation Studies) is a not for proft
organization devoted to study and promotion of innovation. Based
in Calgary, Alberta, and Incorporated in 2001, it operates through a
network of 35-40 THECIS Fellows.
THECIS has three core functions – research, networking and
education.
• Research. Creating new knowledge and building insights into
how the innovation systems functions and policies that can
improve it.
• Networking. Providing opportunities for exchange of ideas
through breakfast meetings, workshops and conferences.
• Education. Dissemination of information through Newsletters,
events and other informal education activities, particularly for
graduate students.
For more information about THECIS go to www.thecis.ca
The Centre for Innovation Studies (THECIS)
#125, Alastair Ross Technology Centre
3553 31 Street NW
Calgary, Alberta, Canada T2L 2K7
More information
For more information on the GEM Canada 2014 report, please contact
Peter Josty, [email protected]
For more information on the GEM global reports and on GEM,
please contact the GEM Executive Director, Mike Herrington, at
[email protected]
The 2014 GEM Canada report is available at www.gemcanada.org
The 2014 GEM Global report is available at
www.gemconsortium.org
Although GEM data were used in the preparation of this report, their
interpretation and use are the sole responsibility of the authors and the
GEM Canada team.
In addition to the 2014 GEM Canada report, there will be provincial
reports published for Alberta, Ontario, Quebec and Nova Scotia. These
will be available at www.gemcanada.org in due course.
GEM Canada Report 2014
73
The GEM Canada project would not be possible without the support
and encouragement of many supporters and funders. We would like to
recognize the following as funders for the 2014 GEM Canada report.
The authors would also like to thank Blair Winsor and Karen Hughes
for helpful comments on the report.
SPONSOR
RECOGNITION
GEM Canada Report 2014
74
Cooper H. Langford, Ph.D., FRS(Can.)
Dr. Langford is Faculty Professor in Chemistry and in Communication
and Culture (Science and Technology Studies) at the University of
Calgary. He is a Fellow and member of the board THECIS. He is a
former Vice-President (Research) at U of C and a former Director
of Physical and Mathematical Sciences at NSERC. He has published
on university/industry/ government relations, strategic research
funding, evaluation of the outcomes of university research, Canadian
participation in megascience, regional clusters in innovation and
knowledge fows. His current research includes study of the social
dynamics of innovation in the city as an innovation system.
Peter Josty, Ph.D., MBA
Peter Josty has been Executive Director of THECIS since 2001.
THECIS is a not for proft research company that specializes in
innovation research. THECIS carries out three main activities:
research projects for clients relating to innovation; it organizes events
such as breakfast meetings, workshops and conferences, to promote
networking in the innovation community; and it educates graduate
students in science, engineering in medicine about the fundamentals
of innovation and the basics of starting a business. Before this he had a
diversifed career in the chemical industry in Canada.
REPORT AUTHORS
Global Entrepreneurship
Research Association
London Business School
Regents Park, London NW1 4SA, UK.
+44 796 690 81 71
[email protected]
www.gemconsortium.org
The Centre for
Innovation Studies (THECIS)
#125, Alastair Ross Technology Centre
3553 31 Street NW
Calgary, Alberta, Canada T2L 2K7
www.thecis.ca

doc_348598664.pdf