Description
During in this such a detailed file resolve why entrepreneurship this analysis is designed to identify innovative.
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Alberta
Driving wealth creation &
social development in
GEM Al berta Report 2013 GEM Al berta Report 2013
Cooper H. Langford
Peter L. Josty
2013 GEM
ALBERTA REPORT
GEM Al berta Report 2013
Why entrepreneurship? This analysis is designed to identify innovative
and productive entrepreneurship that can promote economic growth,
job creation, sustainability, and quality of life.
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 and activities
and aspirations.
ATTITUDES
The Alberta population has positive attitudes toward entrepreneurship,
nearly 60% deeming it a good career choice, and seventy percent
reporting that successful entrepreneurs enjoy respect. Seventy
percent say media give entrepreneurship good coverage. The fact that
approximately thirty-fve percent know someone who has launched
a venture in the past two years no doubt infuences the positive
impressions. Nearly 60% of Albertans commonly believe they have
the knowledge and skills for a venture and fewer than 40% see fear of
failure as an inhibition.
ACTIVITY
In 2013 Albertans were more heavily engaged in early stage
entrepreneurship than residents of any other province by a substantial
margin. The key indicator, TEA, total early stage entrepreneurship,
composed of the percent of population in nascent stages plus the
percent operating new businesses is over eighteen percent (18.6%).
The national rate is 12.2%, making Canada the second most active
of the countries in its peer group of innovation driven economies,
behind only the US at 12.7%. Overwhelmingly, the entrepreneurs are
motivated by perception of an opportunity. Few are driven by a lack of
options and necessity. Informal fnancing of entrepreneurship, a key
support function, is reported by six and one half percent of respondents
over the last three years in leading provinces of Ontario and Alberta.
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EXECUTIVE SUMMARY
GEM Al berta Report 2013
ASPIRATIONS
A high proportion of entrepreneurs have ambitious plans.
Approximately 30% project growth of more than 50% yielding more
than 10 jobs in fve years. Approximately 25% are innovating with a
new product, and more than 15% expect to have more than 25% export
customers.
ENTREPRENEURS IN THE ECONOMY
Here the main question is what aspects of entrepreneurship are most
directly supportive of innovation and growth. A frst issue is what
business sectors are represented. GEM divides businesses into four
sectors: extractive (mining, agriculture, etc.), transformative (e.g.
manufacturing), business oriented services, and consumer oriented
services. The consumer sector dominates most GEM results. This is
not the case in Canada where business oriented services are the most
populated sector. This is especially true of Alberta. The interest lies
in connections between knowledge intensive business services and
contemporary innovation. Other innovation favourable signals come
from 67% of new frms reporting new markets and 13% operating
in high or medium technology sectors. Both of these are the highest
among participating Canadian provinces.
DEMOGRAPHICS
This section deals with age, education, gender, income distribution,
and the role of immigrants. Among highest education levels, the
holders of post-secondary degrees exhibit the highest TEA. Among the
18 – 64 ‘working age’ population, the age group with the highest TEA
rate is the 35 – 44 age group. However, looking at overall numbers of
entrepreneurs, 50% come from the 18 – 34 age range with the other
half from the 35 – 64 age range. Alberta has strong youth participation
compared to other jurisdictions in Canada and abroad. Despite a
good TEA rate for women in Alberta, the 5:4 ratio of men to women
entrepreneurs, more favorable than the national Canadian ratio,
still suggests increase in the role of women as a goal. In Canada as a
whole, women focus more on consumer services. In Alberta, women,
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EXECUTIVE SUMMARY
GEM Al berta Report 2013
like men, are more involved in business oriented services. There is no
evidence for a gender gap in use of technology. Income distribution in
GEM is considered in three levels. In Alberta, the highest TEA rate is
in the upper third of the distribution followed by the middle third. In
Alberta, immigrants participate in entrepreneurship at rates above
the overall Canada TEA of 12.2%, but at levels well below the non-
immigrant population.
WORK – LIFE BALANCE AND SATISFACTION
Contrary to some suggestions, there is little difference in satisfaction
with work-life balance and general life satisfaction indicators between
entrepreneurs and the general population. The surprising result may
be that entrepreneurs don’t express a greater sense of autonomy.
THE STAGES OF ENTREPRENEURSHIP
Entrepreneurship begins from emergence of intentions leading to the
start-up process (nascent) and establishment of young frms. Those
reaching an age of 3.5 years joint the class of established businesses.
Finally there are to exit cases: termination or sale to new owners. The
middle stages are cover in earlier sections. Intentions (for the next
three years) in 2013 were twenty-two percent. Reported business
termination rate was fve percent and transfer to new ownership rate
was one and a half percent.
THE FRAMEWORK CONDITIONS FOR
ENTREPRENEURSHIP IN CANADA
Experts were asked to appraise several dimensions of conditions
supporting entrepreneurship in nineteen areas. The areas in which
Alberta conditions were found most favourable were physical
infrastructure, entrepreneurs’ social image, and opportunities to start-
up. In this the expert opinion parallels the perceptions found in the
adult population survey. The weakest areas were identifed as R&D
transfer to small frms and growing frms, education and training, skills
and knowledge to start-up. This last is in contrast to the optimism
about skills expressed in the population survey.
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EXECUTIVE SUMMARY
GEM Al berta Report 2013
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FINAL CONSDERATIONS
The overall analysis of the results led to the recommendation that
follow.
Recommendations
1. The culture of entrepreneurship in Alberta is healthy and activity
in 2013 is vigorous. Policy should be directed to improving the
quality of entrepreneurship and facilitation of innovative growth
oriented initiatives to support the goals of jobs, growth, quality of
life and sustainability.
2. Education and training for entrepreneurial thinking and innovation
should be enhanced at all levels. In the early years, schools do
attend to the central issue of promoting creativity and individual
initiative. This can be complemented with enriched exposure to the
basics of economic life. In later stages from secondary through
post-secondary education entrepreneurial innovation oriented
thinking should be included in all areas and not limited to business
programs. Entrepreneurship thinking can also play a larger role in
business education. One specifc topic deserves attention: evaluation
of risk.
3. Governments should examine opportunities to use procurement to
encourage young innovative Alberta growth frms.
4. Women entrepreneurs need the encouragement of improved
programs to support them after they have started a family. As
well, efforts need to be made to ensure they have as much exposure
to opportunities as men.
5. Government policy should aim to focus on small growing frms
with targeted programs and effcient handling of essentials for their
business through a small number of nimble agencies.
EXECUTIVE SUMMARY
GEM Al berta Report 2013
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Executive Summary.................................................................................... 1
1. Introduction.......................................................................................... 5
Why Entrepreneurship?....................................................................... 5
Alberta, Entrepreneurship, and GEM.................................................. 5
The Nature and Role of Entrepreneurship.......................................... 6
Why GEM?............................................................................................ 7
Entrepreneurship, Innovation. Growth - The GEM Model................. 8
Research Methodology and Scope..................................................... 10
Adult Population Survey (APS).......................................................... 10
Provincial Expert Ssurvey (PES)........................................................ 10
Standard Socioeconomic Data............................................................ 11
2. The Practice of Entrepreneurship............................................. 12
2.1 Attitudes.............................................................................................. 12
Attitudes Infuence Entrepreneurship............................................... 12
Views of the Provincial Adult Population........................................... 13
2.2 Activity................................................................................................ 14
2.3 Aspirations.......................................................................................... 17
3. Entrepreneurs in the Economy................................................... 19
4. Entrepreneurship Demographics............................................. 22
Age...................................................................................................... 22
Education........................................................................................... 23
Income Distribution........................................................................... 24
Gender................................................................................................ 25
Immigrants......................................................................................... 26
5. Life-Work Balance and Life Satisfaction.............................. 28
6. The Phases of Entrepreneurship............................................... 29
7. The Alberta Experts Survey.......................................................... 30
7.1 Finance................................................................................................ 30
7.2 Government policies............................................................................ 31
7.3 Government programs........................................................................ 32
7.4 Education............................................................................................ 33
7.5 R&D Transfer...................................................................................... 34
7.6 Commercial and Service Infrastrucure, Market Operation,
Physical Infrastrucure........................................................................ 35
7.7 Cultural and Social Norms.................................................................. 38
7.8 Opportunities for New Firms and Availability of Talent................... 40
7.9 Intellectual Property Rights................................................................ 41
7.10 Climate for Women Entrepreneurs.................................................. 42
7. 11 High Growth...................................................................................... 43
CONTENTS
GEM Al berta Report 2013
ii
7.12 Innovation......................................................................................... 44
7.13 Youth and Young Adults................................................................... 45
Youth (14 – 20)............................................................................. 45
Young Adults................................................................................. 46
7.14 Theme Averages................................................................................. 47
7.15 Open-ended Responses..................................................................... 48
8. Implicationa and Conclusions................................................... 50
GEM Canada Team.................................................................................... 53
About THECIS............................................................................................. 54
Sponsor Recognition................................................................................ 55
Report Authors........................................................................................... 56
Notes................................................................................................................ 57
Figure 1. The GEM Model.................................................................................... 8
Figure 2. The Entrepreneurship Process............................................................. 9
Figure 3 Entrepreneurship as a Career.............................................................. 13
Figure 4. Capacity............................................................................................... 14
Figure 5 TEA (% pop) for Canadian Provinces.................................................. 15
Figure 6 TEA and its components compared to established businesses........... 15
Figure 7 Percent of TEA with some ambitious plans........................................ 18
Figure 8 Distribution (% of TEA) of initiatives over four sectors..................... 20
Figure 9 TEA rates (% of age group) for provinces........................................... 22
Figure 10 Percentage TEA activity in each educational cohort........................ 24
Figure 11 Percent Participation in TEA by household income.......................... 25
Figure 12 TEA rates (% of pop) by gender in each province............................. 26
Figure 13 TEA rates (% pop) among immigrants by province.......................... 27
Figure 14 Work – life balance and life satisfaction........................................... 28
Figure 15 Percent of respondents reporting each phase................................... 29
Figure 16 Finance............................................................................................... 30
Figure 17 Government Policies and Programs.................................................. 31
Figure 18 Government programs...................................................................... 32
Figure 19 Education........................................................................................... 33
Figure 20 Knowledge transfer........................................................................... 34
Figure 21 Commercial and service infrastructure............................................ 36
Figure 22 Market dynamics............................................................................... 37
Figure 23 Physical Infrastructure...................................................................... 38
Figure 24 Cultural and social norms................................................................. 39
Figure 25 Conditions for high growth............................................................... 43
Figure 26 Attitudes toward innovation............................................................. 44
Figure 27 The averages of the means in each theme......................................... 47
LIST OF FIGURES
CONTENTS
GEM Al berta Report 2013
5
WHY ENTREPRENEURSHIP?
Alberta, Entrepreneurship, and GEM
This report describes the frst survey of entrepreneurship in Alberta
that samples the entire adult population of the province from age
eighteen. Concern for entrepreneurship and the emergence and growth
of new frms is a central part of a current Government of Alberta
initiative to develop a strategy for small businesses.
“Recognizing the critical role [small] businesses fll,
the Government of Alberta is listening closely to
small businesses and entrepreneurs.”
- What we heard” - report on the SHAPE engagement
1
.
The concerns over small business refect goals for growth and for
employment. In the contemporary context, we must add the goals
of sustainability and quality of life
2
. Appropriately, the special topic
for GEM, worldwide, this year is “entrepreneurship and well-being”.
Broad and convincing evidence
3
shows that the scope and character of
entrepreneurship strongly infuences all four of these goals for Canada.
Consequently, the analysis of entrepreneurship is intended to inform
how it can promote:
• Economic growth,
• Job creation,
• Sustainability,
• Quality of life.
There can be little doubt that the present uncertain economic climate
prioritizes implementation of evidence based entrepreneurship
policy. Future growth (its extent and quality) requires attention to
innovation policy. Moreover, it is important to acknowledge that, in
Alberta at least, ‘intrapreneurship’ initiatives inside frms and social
entrepreneurship in the community are similarly important.
1. INTRODUCTION
1
Alberta Innovation and Advanced Education (2014) What We Heard, report on the SHAPE
engagement to support development of the strategy for small business,https://shape.alberta.ca/media/1039/sbs-whatweheard.pdf accessed 24 04 2014.
2
Hawken, P. The ecology of commerce : a declaration of sustainability, Harper Business, New
Yory, 2010 xv, 224 p.
3
van Praag, C. & Versloot, P.H. What is the value of Entrepreneurship, A Review of Recent
Research, Small Business Economics, 29, 351-383, 2007
GEM Al berta Report 2013
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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”
4
(p.9).
The goal 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 creation of jobs for Albertans.
It is well known that we live in a knowledge economy. Knowledge
is the economic good that does not degrade in use. In practice, few
organizations can effectively realise the full economic return on all of
the knowledge they must possess for their core mission
6
. This leads
to the ‘spillovers’ that, for example, lead to productive clustering for
which the archetype is Silicon Valley, but which can be clearly seen
in Alberta’s oil and gas cluste
7
. Among the most productive forms of
entrepreneurship is turning ‘spillover’ knowledge into breakthrough
new ventures that escape and go beyond the limitation on large frms
that is imposed by the requirements to attend to their ‘core business’.
The infuential economist, William Baumol, pointed out
8
, 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 reshuffes the locus of accumulation
of money. It includes opening imitative consumer services
1. INTRODUCTION
4
Bosma, N., Wennekers, S., Amorós, J.E. (2012). Global Entrepreneurship Monitor 2011 Extend-
ed Report; Entrepreneurs and Entrepreneurial Employees Across the Globe, Global Entrepre-
neurship Research Association. P.59
5
Ahmad, N. and A. Hoffman (2008), A Framework for Addressing and Measuring Entrepreneur-
ship, 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
Langford C.H., Li, B. Ryan C., Firms and their problems in D. Wolfe, ed , Innovation in Urban
Economies, University of Toronto Press, Toronto, 2014. Chap. 6.
8
Baumol, W. Journal of Business Venturing, (1996) 11(1), 3-22.
GEM Al berta Report 2013
7
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
study is the productive entrepreneurial process, which is the main
driver of long-term transformative growth. Much interest centres on
entrepreneurship and innovation where 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 Tim
Horton’s coffee shops or the introduction of ‘Medicare’. In fact, analysis
of innovation shows that every success depends in large measure on
the non-technical social factors. Hall and Martin
9
point out that an
innovation must pass four hurdles: technical feasibility, commercial
viability, organizational capability, and social acceptability. 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.
WHY GEM?
First and foremost GEM is a regional, national and global project.
Participation in GEM brings Alberta into a rich context of data
from other provinces and from countries that cover 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 globally 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 the initiative grows out of some new idea. Most innovation
literature offers analysis from the frm perspective. GEM brings the
individual initiator back into focus.
As a complement, the framework environment that facilitates or
constrains Alberta entrepreneurs is assessed through the provincial
experts survey (PES).
1. INTRODUCTION
9
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.
GEM Al berta Report 2013
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Entrepreneurship, Innovation, Growth -
The GEM Model
10
The interpretation of entrepreneurship from one 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. The GEM project regards
entrepreneurship as a process in a complex ecosystem and examines
individual entrepreneurs and ventures in this context. The GEM model
is shown in Figure 1. Boxes at the top left cover four basic requirements
and six effciency enhancing factors appraised from available studies,
(e.g. reports from Statistics Canada). At the centre left, the model
recognizes the importance of the social, cultural and political context.
Finally, nine factors shaping the innovation and entrepreneurship
framework complete the left column. These last are appraised by the
GEM provincial survey of expert opinion (PES). At the centre of the
diagram, the link between the established frms and independent
entrepreneurs is recognized. This takes large frms beyond their, often
incremental, innovations to their role as knowledge ‘reservoirs’ for
‘spillover’. Large frms can also act as demanding customers for a wide
range of goods and services from smaller frms. Finally, on the right is
the overall outcome: achievement of jobs, innovation and social value.
Figure 1. The GEM Model
10
The discussion in this section relies heavily on the Global Entrepreneurship Monitor Global
Reports for 2012 & 2013.
1. INTRODUCTION
Entrepreneurship
Activity
Attitudes Aspirations
Personal Values
and Background
Nine
Entrepreneurial
Framework
Conditions
Effciency
Enhancers
Basic
Requirements
National
Framework
Conditions
Social,
Cultural,
Political
Context
Existing Economic
Activity
(Primary Economy)
Outcome/Impact
(socio-economic
development)
Entrepreneurial Output
(new jobs, new value added)
+
_
+
_
+
_
Spillover
GEM Al berta Report 2013
9
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. 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 rely on a
healthy profle of the basic requirements and effciency enhancing
factor characterized on the left of the GEM model diagram.
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 discontinuance. Given variable contexts and
conditions, it is not inevitable that one phase leads to the next. Figure
2 shows the phases of entrepreneurship. In exploring the early phases,
the GEM project assembles data not available from business statistics.
Figure 2. The Entrepreneurship process
1. INTRODUCTION
Source: GEM Global Report 2011
GEM Al berta Report 2013
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RESEARCH METHODOLOGY AND SCOPE
Adult Population Survey (APS)
Using a telephone survey, an independent polling frm randomly
selected adults between the ages of 18 and 99. Their responses were
solicited to a series of detailed questions, phrased in everyday language,
that are used throughout the GEM international entrepreneurship
project. These are used to assess entrepreneurial attitudes, activities,
and aspirations of the provincial population. These provide a profle
of a representative cross section of the Alberta adult populations,
balanced for age and gender distribution. With the common
survey instrument in global use, it is possible to compare Alberta
entrepreneurship across participating provinces, to Canada as a whole
and internationally. In international data, the ‘working age’ range
of 18-64 was employed in other countries this year. Consequently,
Canada data are compared to other countries in the Canada Report
11
on the 18-64 age basis. A separate analysis of the senior population
has been made for Canada. The Canadian sample, expanded to include
the age range 18-99, permits identifcation of activities of seniors. For
analysis, the Alberta sample is weighted for age and gender to standard
Canadian demographic data.
Provincial Expert Survey (PES)
The expert survey is a questionnaire survey of 36 experts in Alberta
using the instrument developed for the global GEM project. The
experts come from different professional perspectives where they gain
consider¬able knowledge of entrepreneurial activities. Nine areas of
expertise are specifed by GEM: fnance, policy, government programs,
education and training, technology transfer, support infrastructure,
and wider society/culture felds. The survey instrument 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 Alberta. The fnal section solicits open
ended responses, which are coded to nine categories. The questions
11
Langford, C.H. Josty P. Holbrook, A. 2013 GEM Canada Report, THECIS, Calgary, 2014.
www.thecis.ca
1. INTRODUCTION
GEM Al berta Report 2013
11
cover nine major areas, creating the framework in which entrepreneurs
operate:
• 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 contextual 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 Al berta Report 2013
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The key indicators from the GEM survey probe:
• entrepreneurial attitudes.
(How strong is the perception 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 Alberta 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
Alberta population . A key policy goal must be 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 both the
crucial productive entrepreneurs and those other entrepreneurs who
also contribute to job creation. GEM reports the public perception of
entrepreneurs’ hopes, struggles and successes. The 2013 Alberta GEM
survey paints the picture of a strong entrepreneurial culture.
2. THE PRACTICE OF
ENTREPRENEURSHIP
2
Newfoundland and Labrador, Economic Review 2014
GEM Al berta Report 2013
13
VIEWS OF THE PROVINCIAL ADULT POPULATION
Three key issues in the attitudes of the general population can shape
the entrepreneurs’ sense of their chances.
Do people see entrepreneurship as a good career choice?
Do they admire successful entrepreneurs?
Do popular media give entrepreneurship adequate attention?
A last question asked of the non-entrepreneurial population tests
contact with entrepreneurs: “Do you know someone who started a
business in the past 2 years?” The survey results are shown in Figure 3.
FIGURE 3. ENTREPRENEURSHIP AS A CAREER
Figure 3 shows that Alberta shares pretty much the same positive
attitudes as other provinces toward a career in entrepreneurship.
Data for G7 countries are similar but the Canadian position is healthy
in international comparison. Figure 4 shows data related to the
provincial population’s sense of capacity to engage in entrepreneurial
activity. Perception of opportunity over the next six months is
highest in Saskatchewan and Alberta. Confdence in having skills and
knowledge to undertake entrepreneurship is quite high in all provinces
except Quebec with BC showing a small lead. Inhibition of activity
from fear of failure is low in all provinces. It is below 30% in Alberta.
It is clear that Albertans undertake entrepreneurship with confdence.
Selling the concept is not necessary.
2. THE PRACTICE OF
ENTREPRENEURSHIP
GEM Al berta Report 2013
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FIGURE 4. CAPACITY.
2.2 ACTIVITY
The heart of the GEM survey, the indicators that provide key
perspectives, 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 evaluating the status of entrepreneurship in a
jurisdiction and judging outcomes of policy.
The analysis centres on three measures that lead the tabulation below.
1) The nascent entrepreneurship rate, the percentage of the adult
population 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 adult
population 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) The combination of these two (counting each individual only
once) yields an overall indicator, ‘TEA’, the total early stage
activity, or entrepreneurship rate.
2. THE PRACTICE OF
ENTREPRENEURSHIP
GEM Al berta Report 2013
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The pivotal TEA rates for the participating Canadian provinces
are shown in Figure 5. Note that Alberta has the highest TEA by a
signifcant margin.
FIGURE 5. TEA (% POP) FOR CANADIAN PROVINCES
Figure 6 shows provincial data for TEA with the component nascent
and new business indicators reported. Data for the established
businesses (those owner/managers reporting business active for more
than three and a half years) is added for comparison.
FIGURE 6. TEA AND ITS COMPONENTS COMPARED TO
ESTABLISHED BUSINESSES
2. THE PRACTICE OF
ENTREPRENEURSHIP
GEM Al berta Report 2013
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Alberta’s TEA of 18.6% is spectacular among innovation driven
economies, easily exceeding that of the US leading 12.7% TEA. It
is six percentage points ahead of Saskatchewan at 12.6%. There is,
nevertheless, an aspect of some concern. The high TEA is driven by
the nascent (earliest stage) frm rate at 12.8%. The new business (3
– 42 months old) rate is 6.1%, a little less than half. The established
business rate is similar to that of Ontario, Manitoba or Saskatchewan
and less than BC. Perhaps the Alberta TEA should be seen as testifying
to a culture favourable to entrepreneurship but not necessarily as
supportive to new and growing frms. Some support for this view will
appear in the expert views in the PES (Chapter 7).
TEA values also provide insights into aspects of entrepreneurship such
as initiatives based on recognition of an opportunity vs. ones driven be
lack of options and necessity:
Province Alberta NL QC ON MB SK BC
%TEA 15.4 9.9 7.7 9.1 9.6 12.6 10.8
Opportunity
%TEA 2.2 .70 1.1 2.5 3.7 1.5 1.1
Necessity
It is clear that opportunities are the dominant drivers of
entrepreneurship across Canada.
A complement to high TEA rates is the question of the share of the
population who report having been informal investors (over the last
three years). Canada’s rate of 5.7% of the population leads the G7
countries. The provincial data (below) show that Ontario and Alberta
are the drivers.
Province Alberta NL QC ON MB SK BC Can
% ‘Angels’ 6.3 2.9 4.1 6.4 5.5 4.7 5 5.7
2. THE PRACTICE OF
ENTREPRENEURSHIP
GEM Al berta Report 2013
In innovation driven economies, male entrepreneurs generally
outnumber female. The relative rates by gender (mal, fem) for TEA and
established business (EB) by gender are:
Percent Alberta NL QC ON MB SK BC
TEA mal 20.5 12.6 11.9 14.2 19 15.2 13.9
TEA fem 16.5 9.2 7.2 9.7 8.4 12.8 11.3
EB mal 10.2 5.4 8.9 11.1 10.8 9.4 6.6
EB fem 6.4 3.2 4.8 5.8 6.9 6.9 6.6
The share of entrepreneurship by women is higher in Canada than
most G7 countries, at somewhat better than a 3:2 ratio. We see the
Alberta ratio is better than 5:4. Among the established businesses,
BC exhibits parity and Alberta and Manitoba have ratios the next most
favourable to women.
2.3 ASPIRATIONS
A fnal key aspect of early stage entrepreneurship is the entrepreneur’s
scale-up aspirations. Three areas are chosen to give a snapshot of the
level of ambitions and growth intentions of the new businesses: what
fraction expects substantial job growth, what fraction will produce new
products, and what fraction will be oriented to exports? The indicators
are the share of the population of entrepreneurs responsible for the
total early stage activity (TEA). These variables are likely to include the
most innovative new initiatives and they lead directly to the discussion
of entrepreneurship in the economy in the next chapter.
Is the business expected to create ten or more jobs and 50% or
more growth within the frst fve years (Hi jobs)?
Will the business introduce products new to all customers
(New product)?
Will at least 25% of the customers lie outside the country
(Exp 25% plus)?
17
2. THE PRACTICE OF
ENTREPRENEURSHIP
GEM Al berta Report 2013
18
The results for participating provinces are reported in Figure 7.
FIGURE 7. PERCENT OF TEA WITH SOME AMBITIOUS PLANS.
Alberta scores fairly high in all three categories. Some of the
characteristics of other provinces such as BC’s high export orientation
and Quebec’s combination of high job expectations with low export
expectations can be understood from their geography.
2. THE PRACTICE OF
ENTREPRENEURSHIP
GEM Al berta Report 2013
19
Baumol’s categories distinguish productive from non-productive
initiatives where the frst are seen as economically creative and the
second simply re-arranging the distribution of economic benefts.
Clearly, the productive category is closely tied to innovation. The total
entrepreneurship measures do not give indications of the degree to
which a given effort has productive content. (It was noted above that
the ‘unproductive’ may have positive aspects, as for example, in job
creation, and trying something new is the frst step in innovation.)
A frst set of indicators pointing to productive entrepreneurship are the
Aspiration indicators in the previous Chapter.
Alexander
12
introduced a second distinction relevant to economic
impact: “A portion of the economic effort in a city is supported by
non-local demands. But these city people in turn have need for local
services, thus a second urban function is … that which caters to the
[local] needs.” The frst category is a key driver of regional growth and
is associated much more strongly with sectors other than consumer
services. Similarly, it is commonly assumed that the transformative
(manufacturing, etc.) sector offers greater opportunity to ‘productive’
entrepreneurs.
GEM data offer indicators through cataloguing initiatives into four
sectors:
• Extractive (e.g. mining, agriculture),
• Transformative (e.g. manufacturing),
• Business oriented services,
• Consumer oriented services.
The distribution among these sectors (Figure 8) offers insight into
the sort of economic development that can result. Complementary
information comes from the fraction of TEA initiatives that report
reliance on high or medium technology. Finally, the degree to which
the entrepreneurs are developing initiatives with few or no competitors
is an innovation related indicator.
3. ENTREPRENEURS IN
THE ECONOMY
12
Alexander J.W. (1954) The basic-non-basic concept of urban economic function. Economic
Geography, 30(3) 246-261.
GEM Al berta Report 2013
20
FIGURE 8. DISTRIBUTION (% OF TEA) OF INITIATIVES
OVER FOUR SECTORS
A relevant reference point for interpretation of these data is the
sectorial distribution of established businesses identifed by owner/
managers who were encountered in the survey. For Canada this
distribution is:
% Est Bus Extr Transf Bus Ser Consum Ser
7.24 19.91 36.08 36.77
The low level of extractive sector entrepreneurial activity (Figure 8) is
surprising. The expected importance of extractive industries in Alberta
is missing and is, in fact, better exhibited by the established businesses.
Perhaps, the high fraction of business oriented services includes new
small businesses serving extractive industries. This is evident in an
“oil and gas” centre such as Calgary where a large fraction of business
services serve the core cluster.
Five of the seven provinces stand out for the high fraction of activity
in business oriented services. The other two illustrate the role of
consumer oriented services sector, which is the largest sector in
most other jurisdictions surveyed by GEM. The innovation literature
has recently emphasized the role of knowledge intensive business
services, KIBS
13
. The high incidence of business oriented services
among Canadian start-ups, especially those in Alberta may indicate
activity in the innovative KIBS sector, which is less apparent among
established businesses. Finally, a lower incidence of consumer oriented
3. ENTREPRENEURS IN
THE ECONOMY
13
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
GEM Al berta Report 2013
21
services, a sector likely to include locally oriented and less ‘productive’
entrepreneurial initiatives, is consistent with a relatively more
innovative entrepreneurial population. Shane
14
, in an award winning
paper, shows that such consumer service entrepreneurship may even
be negative for growth when too much local competition is generated.
He recommends that policy instruments be carefully designed to focus
start-up support on those new businesses that have clear growth plans.
The share of TEA addressed to new markets where no or few of
competitors offer the same product is also an indicator linked to
innovation and growth ambitions and offers a perspective on Shane’s
concern. In the participating provinces, the percentage of TEA
reporting such new markets is:
Province Alberta NL QC ON MB SK BC
% New Market 67.3 66.5 59.6 59.4 57 49.3 59.6
There is little difference among the provinces. A majority of
ventures appear to be offering novelty and avoiding too much direct
competition, a positive from the viewpoint of Shane’s cautions.
A fnal variable often considered to correlate with innovation is activity
in high or medium technology (OECD defnition) sectors. Perhaps
somewhat surprisingly, Alberta appears to be a leader (below):
Province Alberta NL QC ON MB SK BC CAN
% in Hi or 13.8 2.4 12.1 5.9 7.0 6.9 9.6 8.7
Med tech
One point will be documented below. There is no apparent gender gap
in the use of high or medium technology in Canada.
3. ENTREPRENEURS IN
THE ECONOMY
14
S. Shane, Why encouraging more people to become entrepreneurs is bad public policy, Small
Bus. Econ. 33, 141-149, 2009
GEM Al berta Report 2013
22
AGE
The international GEM adult population survey addresses the working
age population from 18 to 64, seniors are excluded. The population
is segmented into fve ranges: 18-24, 25-34, 35-44, 45-54, and 55-
64. This limitation will be followed here and seniors will be treated
separately in order to maximize overlap with other GEM documents.
Age distributions of TEA ‘entrepreneurship’ rates in the participating
provinces appear in Figure 9.
FIGURE 9. TEA RATES (% OF AGE GROUP) FOR PROVINCES
The highest participation rate among Albertans is in the 35 - 44 age
group, a result that is quite common in other jurisdictions. However, it
is only slightly above the rates for the youngest (18 – 24) age group and
the young adult group (25 – 34), both of which are above 15% of the
population in the age group. This pattern is shared with Saskatchewan.
As the Canadian national data show, younger entrepreneurs play a
large role across Canada. (Ontario’s over 20% rate in the 25-34 group
and Manitoba’s over 20% in the 18-24 age group deserve note.) An
alternative analysis asks not for the rate of TEA in an age group but
what fraction of the TEA entrepreneurs come from the age group. This
perspective reveals that 50% of Alberta’s TEA activity comes from 18 –
34 year old entrepreneurs, youth and young adults.
4. ENTREPRENEURSHIP
DEMOGRAPHICS
GEM Al berta Report 2013
23
Seniors are not covered in international data, but the Canadian APS
included respondents to age 99. This provided a fnal national sample
of 589 seniors and yielded a TEA of 2.7%, extending the downward
trend from the 55-64 group. In the Alberta sample there were 51
seniors. In this group, 65% thought the next six months offered good
opportunity for entrepreneurship compared to 70% for the total
population. Forty-two percent reported skills and knowledge to start
a new business (general population 57%), and twenty-three percent
reported they would be inhibited by fear of failure (general population
43%). Balancing lower confdence in skills with reduced fear of failure,
leads to expectation of a signifcant level of entrepreneurial activity.
Data show that approximately 6% in this small sample did report start-
up activity. One reports an export focused business.
It will be important to track changes in these results over the next few
years as the senior population increases.
EDUCATION
The educational backgrounds of the early stage entrepreneurs offer
further insights into the culture of entrepreneurship. The fraction with
at least a secondary diploma is a clear majority across the country, as
shown by the following data. Quebec stands out as leading:
Alberta NL QC ON MB SK BC
Fraction w. 0.75 0.78 0.83 0.75 0.66 0.68 0.69
secondary
Figure 10 shows the percentage rate of entrepreneurship among the
population groups with some secondary education (some sec), with
secondary degrees (sec deg), post-secondary degrees (post sec), and
with some post graduate experience (pos grad). Except in BC the
highest rates of entrepreneurship are among holder of post-secondary
degrees. This is especially apparent in Alberta. Those with postgraduate
experience represent the slight majority in BC and are clearly
signifcant in Alberta and, especially Newfoundland. However, the
secondary degree holders are the second most likely group to produce
entrepreneurs in Alberta. The important role of post-secondary degree
4. ENTREPRENEURSHIP
DEMOGRAPHICS
GEM Al berta Report 2013
24
holders is observed for Canada as a whole and for the US and the
UK. The percentage of post graduate experience entrepreneurs in the
US data is similar to the ML, BC and Alberta percentages, and it has
been suggested that this implies initiatives requiring high levels of
specialized knowledge.
FIGURE 10. PERCENTAGE TEA ACTIVITY IN
EACH EDUCATIONAL COHORT
INCOME DISTRIBUTION
GEM data includes household income distribution in thirds:
upper third, middle third, and lower third. Data in Figure 11 show
percentages of households in each income third that are involved in
TEA activities (note: response rate is low). Alberta stands out among
the provinces in having its highest rate of early stage entrepreneurship
among the upper third of the income distribution. Alberta’s overall
leadership in TEA rate is attributable to leadership in the rate among
upper and middle income households. In conjunction with the focus on
the business oriented services sector and the participation rate at the
post-secondary degree educational level a case emerges that Alberta
entrepreneurship focuses on more knowledge intensive, perhaps more
sophisticated, activities.
4. ENTREPRENEURSHIP
DEMOGRAPHICS
GEM Al berta Report 2013
25
FIGURE 11. PERCENT PARTICIPATION IN TEA BY HOUSEHOLD INCOME
GENDER
If we have seen above that men participate in entrepreneurship at a
higher rate than women (p.10), it is interesting to look at the gender
dependence of some attitudes in the full Alberta population sample.
Good Knowledge Fear Failure
Opportunity and Skill
men 72% 61% 30%
women 67% 53% 38%
The distribution of attitudes in the population foreshadows, more or
less proportionally, the gender difference in entrepreneurial activity
measured by TEA.
The provincial pattern of early stage entrepreneurship (TEA) given
above is repeated in Figure 12 where the overall percentage rates of
male (male) and female (fem) TEA are compared to the corresponding
gender dependence of opportunity (opp) vs. necessity (nec). Here, the
provincial data are compared to the national results. Although male
rates are greater than female throughout, given the high overall TEA,
Alberta gender differences are smaller compared to other provinces
except in the case of opportunity driven initiatives. The share of
necessity driven entrepreneurship among women is 2.7%, the high
among the provinces, but 2.7% represents a very small number of
respondents.
4. ENTREPRENEURSHIP
DEMOGRAPHICS
GEM Al berta Report 2013
26
FIGURE 12. TEA RATES (% OF POP) BY GENDER IN EACH PROVINCE
Examination of 4-digit industry codes indicates that Alberta women,
like men (but not women) in the Canada statistics, are more active
in business oriented services than consumer services and this more
similar to the men in sector orientation. Many of the business oriented
services are in areas that may serve the oil and gas industry.
Alberta women entrepreneurs perform very close to the national
distribution in use of new (latest year) or one to fve year old
technology with 7% new (national rate 8%) and 19% one to fve
years old (national 17%). The conclusion in the Canada report that
there is little evidence for gender bias in use of technology also
applies to Alberta. The share of Alberta women’s TEA addressing the
combination of new products and new market is 30%. The rate on this
variable for Canada is 32%.
IMMIGRANTS
The frst generation immigrant population expresses somewhat less
confdence than the general population of Alberta. Only 46% see good
opportunities in the next six months. Similarly 46% believe they have
the skills and knowledge and 43% report being inhibited by fear of
failure. Nevertheless, frst generation immigrants do engage in early
stage entrepreneurship at rates that would be regarded as high in most
jurisdictions. Figure 13 shows TEA rates for immigrants in the fve
4. ENTREPRENEURSHIP
DEMOGRAPHICS
GEM Al berta Report 2013
27
provinces where the sample of immigrant respondents was ffty or
more. In addition to frst generation, rates in the second generation
are reported and these two are combined in an overall immigrant
TEA. The Figure shows rates for the non-immigrant respondents. The
immigrants’ rates can exceed non-immigrant rates, but Alberta is a
striking exception.
FIGURE 13. TEA RATES (% POP) AMONG IMMIGRANTS BY PROVINCE.
The character of businesses launched in Alberta suggests some
ambitious aspirations. Over 50% report few or no competitors and one
third report greater than or equal to 25% export customers. A few use
technologies developed in the last fve years.
4. ENTREPRENEURSHIP
DEMOGRAPHICS
GEM Al berta Report 2013
28
This is section does not ask for indication of participation but for
opinions of a series of statements on a fve point scale from disagree
completely (1) to completely agree (5) with a neutral point at three.
These have to do with two types of statements: about work – life
balance, and about degrees of satisfaction with life and work. The
frst three ask for satisfaction with current work, ability to balance
needs of job with needs of personal or family life, and the way time is
divided between work and private life. The fourth asks for ability to
decide how work is done (autonomy) and the ffth is satisfaction with
income from current work. The last two address overall life satisfaction
in the form of the issue of whether the important things in life have
been accomplished and whether one would do things differently given
a second chance. Figure 14 shows the degree of agreement with the
positive form of the statement for both the early stage entrepreneurs
and the general population. Both means of responses and the mode
(most common choice) are shown to capture the overall balance of the
group and to identify where the largest group converged.
FIGURE 14. WORK – LIFE BALANCE AND LIFE SATISFACTION
There is surprisingly little difference between entrepreneurs and
the general population. A signifcant number of entrepreneurs do
show very high satisfaction with work not matched in the general
population where means are the same, implying a signifcant number
of entrepreneurs who are less satisfed. Perhaps a difference in sense of
autonomy is expected, but it is not reported.
5. LIFE – WORK
BALANCE AND LIFE
SATISFACTION
GEM Al berta Report 2013
As described in the introduction, the phases of entrepreneurship begin
from the emergence of an intention sampled as those with an intention
over the next three years (Fut SU). The next phase is the nascent
(Nasc) of activity within the past year. This is followed by the new
business phase (New Bus) with income for less than three and one-half
years. Beyond we identify established businesses (Est Bus). Finally,
some business owner/managers exited in the past year. There are two
cases; either the business was discontinued (Discint), or the business
continued with new owners (New own). Obviously, it is not the any
one business described as in more than one phase at the time of the
interview.
FIGURE 15. PERCENT OF RESPONDENTS REPORTING EACH PHASE.
Alberta stands high compared to other provinces in the frst two
phases, with an especially large gap between nascent activity and new
businesses. The Alberta discontinuance rate is also comparatively high.
Isolating the Alberta data we see the following in more detail:
% Fut %Nasc %New %Est %Discint %New
SU bus bus own
Alberta 22.4 13 6.1 8.5 5 1.6
Should it be a matter of concern that Alberta has high levels of early
stage interest but lower levels of new businesses? Is there a barrier
not as infuential in Quebec Saskatchewan, or BC that is faced by the
nascent entrepreneurs of Alberta? As well, is there a reason for a higher
ratio of discontinuance compared to successful sale of the business?
The reasons given within the survey framework for discontinuance
were: ‘not proftable’ - 19%, ‘alternate job or business opportunity’ –
34%, ‘personal reasons” – 12%, and ‘an incident’ – 37%. In Ontario and
Quebec, new owner rates exceeded discontinuance rtes.
29
6. THE PHASES OF
ENTREPRENEURSHIP
GEM Al berta Report 2013
30
7.1 FINANCE
The frst area explored in questions to the experts was fnance. Some
other documents (e.g. the Power of Three Report
15
) have suggested
that Canada ranks well in international comparisons and fnd that
the cost of starting a business has fallen signifcantly in Canada.
Moreover, the population survey rates the role of informal investor
participation in Canada (and Alberta) as a leader. Still, fnancing is
always a key challenge for young and growing frms. Questions posed
concern suffciency of equity funding, adequacy of debt funding,
suffciency of government subsidies, adequacy of private funding,
suffciency of venture capital, and availability of IPO funding for
new and growing frms. All are put in the positive so that agreement
indicates a favourable situation. The responses offer a fve point scale
ranging from ‘completely agree’ (fve) to ‘completely disagree’ (one),
with ‘somewhat’ and ‘neither’ as the intermediate descriptors. Most
responses, as shown in Figure 16, lean to the ‘somewhat false’. Both
mean of answers and the mode (the most frequently chosen option) are
shown in the Figure. The mode is an interesting secondary parameter
identifying the largest consensus on one point.
FIGURE 16. FINANCE
7. THE ALBERTA
EXPERTS SURVEY
15
C. McMorrow, C-A St Jean The power of three, EY Entrepreneurship Barometer, Canada, 2013http://www.ey.com/Publication, accessed 14/03/06.
GEM Al berta Report 2013
31
The answers especially call attention to weakness in debt, IPO and
venture capital funding. The latter two are not usually the source for
the early stage entrepreneurs identifed in the GEM study. Modest
approval is expressed for the role of private equity and government
subsidies. The problem with the latter is probably organizational as will
be seen in the section on government programs. Private source s are
not rated highly by the experts, but the population survey indicates a
higher rate of informal private investment in Canada than in any other
G7 country and Ontario and Alberta were the Canadian leaders at 6.4
and 6.3 percent of respondents reporting investments in the last three
years.
7.2 GOVERNMENT POLICIES
Issues with Alberta government policy start with policies such as
procurement consistently favour small and growing frms. The next
concerns high priority for small and growing frms at Federal and
Provincial levels. Other issues are as follows. Are necessary permits
and licenses available within about a week? In Alberta, taxes are NOT
a burden. Are taxes and other government regulations applied to small
and growing frms in a predictable and consistent way? Finally, in
Alberta coping with government bureaucracy, regulation and licensing
regulations is not diffcult for small and growing frms. Responses
on the same scale as above are shown in Figure 17 using the terms in
italics above as labels.
FIGURE 17 GOVERNMENT POLICIES AND PROGRAMS
7. THE ALBERTA
EXPERTS SURVEY
GEM Al berta Report 2013
32
The experts perceived that the Federal government policy attached
fairly high priority to small and growing frms, but did not rate priority
at the provincial level quite as highly. They did not see tax a burden
and rated Alberta policy as applied consistently. However, government
priority to small and growing frms as suppliers was rated low. This is
a serious area of concern since government procurement is one of the
few tools governments have to directly support innovative young frms.
Coping with regulation and licensing was seen as somewhat diffcult
and not timely. There has been a good deal of discussion of red tape
reduction. There seems to be signifcant room for further improvement
at the delivery level.
7.3 GOVERNMENT PROGRAMS.
Six aspects of government program delivery were probed, expressed in
the form positive to new and growing frms these are: a wide range of
assistance can be obtained through contact with one agency, science
parks and business incubators provide effective support, there are
an adequate number of programs, agency staff are competent and
effective in support to new and growing frms, almost anyone needing
help from a government program can fnd what they need, and
programs aimed at new and growing frms are effective. The Alberta
expert opinion is summarized in Figure 18.
FIGURE 18. GOVERNMENT PROGRAMS
7. THE ALBERTA
EXPERTS SURVEY
GEM Al berta Report 2013
33
Figure 18 shows that ratings are not favourable with the exception of
the availability of incubators and ‘science parks’. The lowest rating
attaches to the availability of programs through a single agency (‘one
stop shopping’). The mean for effectiveness is signifcantly above the
mode indicating a grouped minority more negative than the majority.
No mode is reported for number of programs because equal numbers
of experts chose 2, ‘partially false’ and 4, ‘partially true’. The responses
for number of programs and competence of government agents
indicate acceptable conditions.
7.4 EDUCATION
The survey asks for opinions on education from primary through post-
secondary and continuing and professional education. Statements for
evaluation of adequacy are adapted to goals appropriate to each level.
At the primary and secondary levels they are: teaching encourages
creativity and personal initiative, teaching provides instruction in
market economics principles. and attention to entrepreneurship and
new frm creation, At the post-secondary level they progress from
general to more specialized post-secondary programs: colleges and
universities provide adequate preparation for starting-up and growing
new frms, business and management programs provide adequate
preparation for starting-up and growing new frms, and professional,
vocational and continuing education systems provide good and
adequate preparation for starting-up and growing new frms. Figure 19
shows the means and modes of Alberta expert opinion.
FIGURE 19. EDUCATION
7. THE ALBERTA
EXPERTS SURVEY
GEM Al berta Report 2013
34
Education for creativity from the primary level and professional,
vocational and continuing education programs for start-up receive
neutral scores. All other aspects of education clearly need attention. In
particular, attention to secondary and general university and college
programs is important. Here it is important to keep in mind that the
goal is stimulation of productive entrepreneurship with innovation
and growth potential. It is not important whether the activity is as
a start-up frm or one within an established frm or organization.
Consequently the focus for education should be toward entrepreneurial
thinking and entrepreneurial attitudes valuable in all contexts and
available over a wide range of programs.
7.5 R&D TRANSFER
The issues under this theme are knowledge transfer and access
to embodied knowledge in the form of the best technologies. The
propositions evaluated are: new S&T and other knowledge is effciently
transferred from universities and other public research centres to new
and growing frms, new and growing frms have just as much access
to new research and technology as large, establishes frms, new and
growing frms can afford the latest technology, there are adequate
government subsidies for new and growing frs to acquire new
technology, S&T base effciently supports the creation of new world
class technology-based frms, and there is good support available for
engineers and scientists to have their ideas commercialized through
new and growing frms.
FIGURE 20. KNOWLEDGE TRANSFER
7. THE ALBERTA
EXPERTS SURVEY
GEM Al berta Report 2013
35
The expert opinion is that R&D knowledge is not effciently
transferred from universities, nor are new and growing frms on a
level playing feld with large frms. They do not have similar access
to new knowledge and they have insuffcient resources to acquire
the latest technology and government subsidies are insuffcient. Still
experts think Alberta has the capacity to effciently support creation
of a world class new technology based frm in at least one area, and
that Alberta engineers and scientists enjoy reasonable support for
commercialization of their ideas. Presently, there are some initiatives
to improve the situation. The hew NSERC Engage Grant program that
funds establishment of initial relations between university researchers
and (often new or smaller) frms with no frm matching funds
requirement is an example.
7.6 COMMERCIAL AND SERVICE
INFRASTRUCTURE, MARKET OPERATION,
PHYSICAL INFRASTRUCTURE.
In the important area of services and commercial infrastructure in
Alberta, fve needs are addressed:
• Subcontractors, suppliers, consultants:
- There are enough (subcontractors),
- Small and growing frms can afford them (afford subcontract),
- It is easy for small and growing frms to get these (access
subcontract).
• It is easy for small and growing frms to get good professional
legal and accounting (good legal acct).
• It is easy for small and growing frms to get good banking
(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. These probably refect the common lack of resources
facing a start-up.
7. THE ALBERTA
EXPERTS SURVEY
GEM Al berta Report 2013
36
FIGURE 21. COMMERCIAL AND SERVICE INFRASTRUCTURE
Market structures and market access are major framework factors
infuencing new frms that include dynamics, 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
(mkt) 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 ant-trust protection. The
expert evaluations are summarized in Figure 22. Markets are seen as
only moderately volatile and open, with cost of entry and established
frm resistance seen as limiting. This is an interesting disagreement
with data from the EY G20 Entrepreneurship Barometer
16
that fnds
Canadian cost of entry low and reports a recent sharp decline. There
is agreement that anti-trust protection is adequate. Alberta experts
expressed slightly more concern with consumer market volatility and
slightly less confdence in anti-trust legislation than the national panel
did.
Note that there was a split of opinion with 2, partly false, and 4, partly
true, drawing the same level of response, that produced a double mode
for B2B volatility and effectiveness of anti-trust.
7. THE ALBERTA
EXPERTS SURVEY
16
C. McMorrow, C-A St Jean The power of three, EY Entrepreneurship Barometer, Canada, 2013http://www.ey.com/Publication, accessed 14/03/06.
GEM Al berta Report 2013
37
FIGURE 22. MARKET DYNAMICS
Physical infrastructure for new and growing frms is appraised by the
expert view of fve statements;
• Physical infrastructure provides good support
(phis infrastructure).
• It is not too expensive to access good communication incl. phone,
internet, etc. (afford communist).
• A new frm can get access to communication (phone, etc.) in about
a week (1 week).
• New and growing frms can afford basic utilities incl. gas, water,
electricity, Etc.
• New and growing frms can get good access to basic utilities in
about a month (1 month).
All of these were found largely true in the Alberta environment with
means of 3.8 to 4.2 and modes of 4 or 5. This is an area of strength.
But the survey didn’t directly address whether it is easy to access
leading edge communication technology and that may lie behind such
reservations as were expressed.
7. THE ALBERTA
EXPERTS SURVEY
GEM Al berta Report 2013
38
FIGURE 23. PHYSICAL INFRASTRUCTURE
7.7 CULTURAL AND SOCIAL NORMS
The fundamentals of Alberta’s cultural values are regarded as generally
favourable to entrepreneurship. This is quite consistent with Alberta’s
high rate of entrepreneurship. All fve statements command a
reasonable degree of assent, as the side by side bars of the fgure show.
• Canadian culture is highly supportive of individual success
achieved through personal effort,
• Canadian culture emphasizes self-suffciency, autonomy and
personal initiative,
• Canadian culture encourages entrepreneurship and
entrepreneurial risk taking.
• Canadian culture encourages creativity and innovativeness.
• In Canadian culture, responsibility for managing his or her own
affairs lies with the individual (rather than the collective).”
There are some interesting differences from the responses of the
national expert panel. In the Canada report the frst three were parallel
with means from 3.1 to 3.5 However, the national panel mean for
encouragement of creativity and innovativeness was only 2.8, and
clear split of opinion led to equal responses of ‘partly false’ and ‘partly
true’ on the last. This split probably reveals a well-known fault line in
Canadian politics that is not prominent in Alberta.
7. THE ALBERTA
EXPERTS SURVEY
GEM Al berta Report 2013
39
FIGURE 24. CULTURAL AND SOCIAL NORMS
The work-life relationship is a second dimension of the social
environment. Do social, political and cultural conditions in Alberta
allow harmonization of personal and working life? That social
conditions in Alberta are favourable is mildly endorsed. There is
less confdence in the idea that labour regulations support work-life
harmony.
The related dimensions are whether Alberta entrepreneurs’ work and
personal life compares favourably to non-entrepreneurs. The expert
diagnosis is affrmative on both more satisfaction with work life and
more satisfaction with personal life.
7. THE ALBERTA
EXPERTS SURVEY
Social Regulations - Entrepreneurs Entrepreneurs
Conditions - Harmony Satisfed Work Satisfed
Harmony Personal
mean 3.1 3 3.6 3.4
mode 4 2 4 4
GEM Al berta Report 2013
40
7.8 OPPORTUNITIES FOR NEW FIRMS AND
AVAILABILITY OF TALENT
The fve propositions concerning the opportunities for
entrepreneurship are.
• There are plenty of good opportunities for creation of new frms.
• There are more good opportunities than people able to take
advantage of them.
• Good opportunities for new frms have considerably increased in
the past fve years.
• Individuals can easily pursue entrepreneurship opportunities.
• There plenty of good opportunities to create truly high growth
frms.
All of these fve opportunity statements were approved with mode
scores of 4, ’partially true’ (means from 3.5 to 4.1 save for the issue
of ‘easy’ pursuit of opportunity, 3.2). These indicated Canada offers
good opportunities for creation of new frms that exceed the number
of people able to take advantage of them. The opportunities have
increased in the past fve years and they include opportunities to create
truly high growth frms.
Addressing issues of entrepreneurial talent, the concern continues
that not many people in Alberta know how to start and manage a small
business or a high growth business. The issues of the set of enquiries
are: know-how to start and manage a high growth business, similar
know-how for a small business, experience in starting a new business,
ability to react quickly to a good opportunity, and ability to organize
the resources required. Scores are:
7. THE ALBERTA
EXPERTS SURVEY
Know-how Know-how Experience React quickly Organize resources
start high start small to opportunity for new bus
growth bus bus
Mean 2 2.3 2.4 2.4 2.2
Mode 2 2 2 2 2
GEM Al berta Report 2013
41
Experience is lacking and knowledge required of how to launch
and organize the resources required to start a new business is not
widespread. Again, these point to educational needs at various levels
from the more general to the specialized.
However, in agreement with the impressions reported in the Adult
Population Survey (APS), the Alberta experts mainly agree that
creation of a new venture is regarded as an appropriate way to become
rich and most people regard entrepreneurship as a good career choice,
media cover entrepreneurship favourably, and most people regard
entrepreneurs as competent and resourceful people.
The only difference from the APS is that the experts, probably from
more sensitivity to the risks, are less convinced that entrepreneurship
is an unqualifed good career choice.
7.9 INTELLECTUAL PROPERTY RIGHTS
In Alberta, intellectual property rights (IPR) are judged the subject
of adequate legislation (mean 3.7) that is enforced (mean3.3). New
and growing frms can trust that their IP will be respected (mean 3.3)
and it is accepted that inventor’s rights should be protected (3.8).
Nevertheless, it is not hard to identify an example of a highly original
Alberta idea implemented by a start-up frm that was appropriated
by multi-nationals. Defense of IP is expensive. Finally, protection of
copyright material from piracy is seen as problem. Protection is rated
at a mean of 3.1 and mode of 2. Of course, protection of intellectual
property rights is under Federal jurisdiction.
7. THE ALBERTA
EXPERTS SURVEY
Way to Desirable Success Gives Media Competent,
Become Rich Career High Status Cover Well Resourceful
Mean 3.9 3 4 3.9 4
Mode 4 2 4 4 4
GEM Al berta Report 2013
42
7.10 CLIMATE FOR WOMEN ENTREPRENEURS.
The APS identifed a high rate of entrepreneurship by women in three
western provinces with overall high rates (AB, SK and BC). In Canada,
reports from the earlier phase of GEM involvement suggest that the
decline in TEA from 2000 to 2003 could be associated with a decrease
in women’s activity. In the G7 countries in 2013, high TEA overall
is associated with a male to female entrepreneurship ratio no larger
than 3:2. Thus, there is extensive circumstantial evidence that the
conditions for participation by women are a key issue. The experts were
asked to evaluate fve conditions favourable to participation by women.
• Social services are available so that women can continue after
starting a family.
• Starting a business is a socially acceptable option for a woman,
• Women are encouraged to become self-employed or start a new
business’
• Men and women are equally exposed to good opportunities to
start a business.
• Men and women have the same level of knowledge and skills to
start a business.
Expert opinion on the Alberta conditions is summarized as follows:
No mode is reported for ‘knowledge’ responses 2 and 4 received the same number
The experts identify weak points in availability of social services to
facilitate working after starting a family – the ‘day care’ issues, and
in making sure women have exposure to good opportunities for
entrepreneurship. There is concern from a number of respondents
over how much encouragement women receive and there is split
opinion over whether men and women have the same level of
needed knowledge and skills. In Alberta, there is consensus that
entrepreneurship is seen as a socially acceptable option for women.
Services to Acceptable Encouraged Exposed to Knowledge
continue to start to start opportunity same as men
work new bus new bus same as men
mean 2.7 4 3.1 2.7 3.4
mode 4 4 4 2
7. THE ALBERTA
EXPERTS SURVEY
GEM Al berta Report 2013
43
7. 11 HIGH GROWTH
A critical issue for support of productive entrepreneurship is the
conditions for promotion of high growth. Expert evaluation is based on
fve conditons:
• Support initiatives are specially tailored for high growth
entrepreneurship,
• Policy makers are aware of the importance of high growth
activity,
• People working in entrepreneurship support have skills and
competence to support high growth,
• Potential for rapid growth is used as a selection criterion for
support,
• Government programs are highly selective when choosing
recipients of entrepreneurship support.
Evaluations are shown in Figure 25. In each case the largest number
(mode) of experts choose a positive reading of Alberta conditions, but
the means show signifcant concerns. The weakest points concerned
tailoring of initiatives, and skills and competence to be effective in
support of high growth entrepreneurship.
FIGURE 25. CONDITIONS FOR HIGH GROWTH
7. THE ALBERTA
EXPERTS SURVEY
GEM Al berta Report 2013
44
7.12 INNOVATION
Expert opinion of attitudes toward innovation is examined from the
point of view of companies and consumers. The six statements propose
that:
• Companies like to experiment with and new technologies new
ways of doing things,
• Consumers like to try out new products and new services
• Innovation is highly values by companies,
• Innovation is highly valued by consumers,
• Established companies are open to using new, entrepreneurial
companies as suppliers,
• Consumers are open to buying products from new entrepreneurial
companies.
The opinions are summarized is Figure 26.
FIGURE 26. ATTITUDES TOWARD INNOVATION
The frst pair assesses attitudes to novelty, new technologies and
practices for frms vs. new products and services for consumers.
Consumers are rated more open to changes, the second pair deals
with receptiveness to innovation as such. There appears to be little
difference. The third pair deals with receptiveness to becoming
customers to new entrepreneurial frms, and again consumers are rated
more open than established frms. The evaluation identifes a parallel
problem to that seen in government procurement. Neither government
no established frms are suffciently open to new frms.
7. THE ALBERTA
EXPERTS SURVEY
GEM Al berta Report 2013
45
7.13 YOUTH AND YOUNG ADULTS.
The GEM experts’ survey looks at the conditions facing youth and
young adults as entrepreneurs or aspiring entrepreneurs. The age
ranges consider youth in the 14-20 age range and young adults in the
21-34 age range. This choice gives insight into the situation of those 14-
17 who are too young by Canadian standards to be asked to complete
a questionnaire as youth entrepreneurs. The adult population survey
(APS) and includes 18 – 20 age youth in the frst segment of the 18-24
age group. The defnition of young adult includes the 21-24 age range
in the 18 -24 age interviewees along with the 25-34 age group in the
APS. Thus, there is some limit on comparison of these data with the
APS age data presented above.
YOUTH (14 – 20)
Five statements presented to the experts are discussed here:
• Youth have easy access to primary and secondary education.
• Families expect youth to contribute to the family’s fnance.
• Self-employed youth learn to develop their business activity
largely through their own experience and relationships.
• There are many opportunities to develop microbusinesses for
youth.
• Government programs effectively train and support youth
entrepreneurs.
Ratings are on the ‘false’ side for the 2nd, 4th, and 5th, but on the ‘true’
side for the 1st and 3rd.
The agreement that youth entrepreneurs learn informally and on
their own along with the perceived lack of government programs
correlates with the concern that the education system does not provide
7. THE ALBERTA
EXPERTS SURVEY
Primary & Contribute to Own Micro Government
secondary family experience business programs
mean 4.5 2.3 3.9 2.8 2.1
mode 5 2 4 2 2
GEM Al berta Report 2013
46
preparation for entrepreneurship, despite a universally accessible
primary and secondary education system. Perhaps, the perceived lack
of micro business opportunity is also related. That contribution to
family fnance is not prominent is consistent with the relative wealth of
Alberta families.
A particularly interesting model for a program for youth is the Shad
Valley program
17
conducted on university campuses. It provides
four weeks of enrichment for secondary students, with workshops
and lectures that focus on the sciences, engineering, technology
and entrepreneurship. This effectively links entrepreneurship with
sophisticated innovation.
YOUNG ADULTS
In Alberta both the 18 – 24 and the 25 – 34 age groups have
TEA rates above 15% (APS data, Ch. 4). Clearly both of these age
groups contributing to the Young adults group are quite active in
entrepreneurship in the context of any innovation driven economy.
On a comparative basis, stimulation of young adult entrepreneurship
cannot be considered a problem in Alberta. It is in this context that the
following six propositions should be read.
• Young adults are signifcantly involved in entrepreneurship.
• Young adults face greater constraints than the general population.
• There is an adequate system of business incubators that can be
accessed by young adults.
• Most who become entrepreneurs have been helped to start-up by
family or close friends.
• Financiers (banks, informal investors, angels) fund young adults’
business initiatives.
• Young adults consider life/work outside Alberta, Canada more
attractive.
Signifcantly Greater Incubators Helped by Financiers Outside more
involved constraints available family fund attractive
mean 2.4 3.3 2.4 4.3 2.2 2.7
mode 2 4 2 4 2 3
7. THE ALBERTA
EXPERTS SURVEY
17
http://ww.shad.ca. (accessed 13 05 14)
GEM Al berta Report 2013
47
7. THE ALBERTA
EXPERTS SURVEY
Without the complementary APS data, this appraisal would seem
rather grim. Yet it is quite reasonable to assume that the young
adult entrepreneurs do face greater barriers than some older groups,
do share with others the diffculty of fnding fnance, and do lack
incubators. These judgments are not comparative with respect to the
experience of these Alberta observers. On the fnal question of external
attractions, it is diffcult to generalize over the wide range of interests,
directions and aspirations of the age group.
7.14 THEME AVERAGES
An overview of the expert appraisals is provided by averaging the
means within each there, in interpreting these, the average of means
usually implies more positive framework conditions, but it needs
to be remembered that a few items are phrased to give low sores to
favourable framework conditions.
FIGURE 27. THE AVERAGES OF THE MEANS IN EACH THEME
GEM Al berta Report 2013
48
In the fgure themes are in decreasing order of Alberta means from left
to right. The Alberta results (AB) are compared to the Canada results in
the national experts survey (NES). The trends are largely similar. The
frst three high averages for Alberta are similar to the national values.
However, support for women, eight in Alberta, is second nationally.
Also, intellectual property rights, ffth in Alberta, are third nationally.
At the weak end, abilities and knowledge to start-up are lowest. This is
in interesting contrast to the large share of the population responding
in the APS who report having the skills and knowledge. Education and
training are rated weak by both Albert and National experts. Alberta
experts fnd Finance relatively better than it is seen nationally.
7.15 OPEN-ENDED RESPONSES
The fnal section of the Provincial expert survey asked for open-
ended responses in three categories; constraints, fostering factors,
and recommendations. In each category, three ordered responses
were invited. The open ended responses were coded in fourteen
categories that can be used here.
CONSTRAINTS
The largest number of constraints was in the fnancial support
category. The second largest number, taking priority into account,
concerned education and training. A third, widely cited,
constraint was in the area of the economic climate.
FOSTERING FACTORS
The leading categories among fostering factors identifed were
cultural and social norms, commercial and professional
infrastructure, and the economic climate. Government programs
and education and training were also widely mentioned.
RECOMMENDATIONS
The largest numbers of recommendations concerned education/
training and government programs. Recommendations about
commercial/professional infrastructure and fnancial support
followed.
7. THE ALBERTA
EXPERTS SURVEY
GEM Al berta Report 2013
49
That constraint on entrepreneurship arises from efforts to obtain
fnancial support is not a surprise and various recommendations arose
around these problems that inform the analysis leading to conclusions
below.
Education and training appears consistently between constraints
and recommendations and is refected by recommendations in this
report. It is interesting to fnd experts convinced that education and
training for entrepreneurship is a serious gap where a large fraction
of the population reports that they have the skill and knowledge
to start a new business. One interpretation would suggest popular
naiveté, but a subtler view would argue that currently healthy rates
of entrepreneurship refect the positive culture seen in the attitude
survey. Still, success and orientation to productive entrepreneurship
can be signifcantly affected by enhancement of entrepreneurship
education.
Various experts see the economic climate as both a constraint and a
fostering factor which demonstrates the multi-dimensional complexity
of the conditions surrounding entrepreneurship.
7. THE ALBERTA
EXPERTS SURVEY
GEM Al berta Report 2013
50
The Alberta entrepreneur. In 2013, the representative Alberta
entrepreneur is young (18-34), well educated, and from an
economically comfortable background. Still we must not forget the
older colleagues (35-80) who do account for half of the activity.
The project is likely to focus on business oriented services or
manufacturing, although a signifcant minority of start-ups will be
in consumer oriented services. It is likely that a new products or new
markets will be involved.
The Alberta entrepreneurship culture. In 2013, the vital signs
are all positive and competitive with any jurisdiction among the
‘innovation driven’ (developed) economies. The general population
has positive attitudes toward entrepreneurship and a good deal of
confdence in their ability to engage. (Expert opinion is uncertain about
such capacity.) It is unlikely that any signifcant increase in the level
of interest and activity above the current 18% TEA rate is desirable.
Rather attention needs to be directed to improving the quality of
the initiatives and the effectiveness of the support framework. A
cautionary observation is that it is the nascent entrepreneurship rate
that is driving the high TEA, not the new business level. Are there
signifcant barriers to the transition from the frst few months that can
be lowered, or are a number of the nascent project weakly conceived?
(A possibility, of course, is that entrepreneurship rates grew sharply in
2013 and the time has not passed for these initiatives to reach the new
business stage.)
Women’s entrepreneurship. The rate of participation by women
in 2013 has improved signifcantly from the reports in the last GEM
survey in 2003. However, it still is at only two thirds of the male rate.
In Alberta, in contrast to the rest of Canada, the business oriented
services sector, not consumer services, is the leading sector. Also, there
is no evidence of a gender gap in use of technology. Still expert opinion
found that services to support women who have started a family
are inadequate, and that women are not exposed to entrepreneurial
opportunities at the same level as men.
8. IMPLICATIONS AND
CONCLUSIONS.
GEM Al berta Report 2013
51
Goals. In the introduction, public goals were identifed as:
• Economic growth,
• Job creation,
• Sustainability,
• Quality of life.
It is clear that not all entrepreneurship serves these goals to the same
extent. Baumol
8
points out that the goals are served to the degree that
the venture does more than reorganize the fows of value, rather it
adds new value (productive entrepreneurship), that is it is innovative.
Shane’s prize winning work
14
shows that some entrepreneurship may
even be negative for growth and jobs by simply dividing markets
and reducing viability of incumbents. One reasonable indicator of
productive character is for a business to serve clients beyond its own
immediate community
12
. This has led to analysis of potential for
innovation and growth by exploring job intentions, new product goals,
new market efforts, export share, and exploitation of technology. The
literature on the innovation role of knowledge intensive business
services, KIBS13 suggests the promise of the major role in Alberta for
business oriented services. In this context, the expert survey indicates
Alberta policy is fairly well oriented to innovation and rapid growth,
but established frms are not suffciently open to the outputs of these
entrepreneurial frms.
Education and training. Despite the confdence in skills and
knowledge for start-up expressed in the population survey, expert
opinion is that lack of skills and knowledge is a problem and that
the educational system does not contribute much until the level of
professional development and continuing education courses aimed at
potential and active entrepreneurs. In the light of the goals, education
for entrepreneurship must be seen as education for innovative
entrepreneurship and entrepreneurial attitudes. This has benefts
beyond start-up activity for entrepreneurial and innovative activity
in frms and for social entrepreneurship. A good model educational
initiative is the Shad valley program
17
, mentioned above, which offers
summer enrichment for secondary students combining science,
8. IMPLICATIONS AND
CONCLUSIONS.
GEM Al berta Report 2013
52
engineering and entrepreneurs activities. At the post-secondary level,
entrepreneurial thinking should not be limited to business programs
but offered broadly across the institution.
Government policies and programs. Expert opinion values
government policies and programs, both provincial and federal, as
important supports to entrepreneurship. Nevertheless a number of
areas for improvement are identifed. One major one is modeled by the
US Defense Department. It has been a major stimulus to innovation
and frm growth through procurement. This tool of government
procurement plays a much smaller role here. For example, a large
government jurisdiction is the health care system which does not have
a good record of drawing on innovative young frms
18
. The experts
also call for more ‘one stop shopping’ for young and growing frms, a
reduction in time delays for obtaining necessary authorizations, and do
support efforts by government to reduce ‘red tape’. The fnal point is
that programs need to have a clear focus for young and growing frms
with criteria that clearly prioritize those with growth potential.
18
THECIS,The Alberta Health Innovation System, The Centre for Innovation Studies, Calgary,
2008.http://thecis.ca/cms3/userfles/Image/Health Industries Report Final -
Jan%202008.pdf accessed 10 05 14
8. IMPLICATIONS AND
CONCLUSIONS.
GEM Al berta Report 2013
53
GEM CANADA TEAM
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
Gary Gorman Memorial University,
St John’s, Newfoundland
Dennis Hanlon Memorial University,
St John’s, Newfoundland
Blair Winsor Memorial University,
St John’s, Newfoundland
Harvey Johnstone Cape Breton University,
Sydney, Nova Scotia
Étienne St-Jean UQTR, Trois Rivieres, Québec
Diane-Gabrielle Tremblay Téluq-université du Québec
Montreal
Charles Davis Ryerson University, Toronto
Neil Wolff Ryerson University, Toronto
Howard Lin Ryerson University, Toronto
Dave Valliere Ryerson University, Toronto
Nathan Greidanus Asper School of Business
University of Manitoba, Winnipeg.
Cami Ryan University of Saskatoon
Chris Street University of Regina
Cooper Langford University of Calgary
Chad Saunders University of Calgary
Ted Heidrick University of Alberta, Edmonton
Brian Wixted Centre for Policy Research on
Science and Technology (CPROST)
Simon Fraser University, Vancouver
GEM Al berta Report 2013
54
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 2013 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 2013 GEM Canada report is available at www.gemcanada.org
The 2013 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 2013 GEM Canada report, there will be provincial
reports available for BC, Alberta, Saskatchewan, Manitoba, Ontario,
Quebec and Newfoundland. These will all be available at
www.gemcanada.org in due course.
GEM Al berta Report 2013
55
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 2013 GEM Alberta report.
SPONSOR
RECOGNITION
GEM Al berta Report 2013
56
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
GEM Al berta Report 2013
57
NOTES
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.gemcanada.org
www.thecis.ca
doc_387600224.pdf
During in this such a detailed file resolve why entrepreneurship this analysis is designed to identify innovative.
2
0
1
3
Alberta
Driving wealth creation &
social development in
GEM Al berta Report 2013 GEM Al berta Report 2013
Cooper H. Langford
Peter L. Josty
2013 GEM
ALBERTA REPORT
GEM Al berta Report 2013
Why entrepreneurship? This analysis is designed to identify innovative
and productive entrepreneurship that can promote economic growth,
job creation, sustainability, and quality of life.
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 and activities
and aspirations.
ATTITUDES
The Alberta population has positive attitudes toward entrepreneurship,
nearly 60% deeming it a good career choice, and seventy percent
reporting that successful entrepreneurs enjoy respect. Seventy
percent say media give entrepreneurship good coverage. The fact that
approximately thirty-fve percent know someone who has launched
a venture in the past two years no doubt infuences the positive
impressions. Nearly 60% of Albertans commonly believe they have
the knowledge and skills for a venture and fewer than 40% see fear of
failure as an inhibition.
ACTIVITY
In 2013 Albertans were more heavily engaged in early stage
entrepreneurship than residents of any other province by a substantial
margin. The key indicator, TEA, total early stage entrepreneurship,
composed of the percent of population in nascent stages plus the
percent operating new businesses is over eighteen percent (18.6%).
The national rate is 12.2%, making Canada the second most active
of the countries in its peer group of innovation driven economies,
behind only the US at 12.7%. Overwhelmingly, the entrepreneurs are
motivated by perception of an opportunity. Few are driven by a lack of
options and necessity. Informal fnancing of entrepreneurship, a key
support function, is reported by six and one half percent of respondents
over the last three years in leading provinces of Ontario and Alberta.
1
EXECUTIVE SUMMARY
GEM Al berta Report 2013
ASPIRATIONS
A high proportion of entrepreneurs have ambitious plans.
Approximately 30% project growth of more than 50% yielding more
than 10 jobs in fve years. Approximately 25% are innovating with a
new product, and more than 15% expect to have more than 25% export
customers.
ENTREPRENEURS IN THE ECONOMY
Here the main question is what aspects of entrepreneurship are most
directly supportive of innovation and growth. A frst issue is what
business sectors are represented. GEM divides businesses into four
sectors: extractive (mining, agriculture, etc.), transformative (e.g.
manufacturing), business oriented services, and consumer oriented
services. The consumer sector dominates most GEM results. This is
not the case in Canada where business oriented services are the most
populated sector. This is especially true of Alberta. The interest lies
in connections between knowledge intensive business services and
contemporary innovation. Other innovation favourable signals come
from 67% of new frms reporting new markets and 13% operating
in high or medium technology sectors. Both of these are the highest
among participating Canadian provinces.
DEMOGRAPHICS
This section deals with age, education, gender, income distribution,
and the role of immigrants. Among highest education levels, the
holders of post-secondary degrees exhibit the highest TEA. Among the
18 – 64 ‘working age’ population, the age group with the highest TEA
rate is the 35 – 44 age group. However, looking at overall numbers of
entrepreneurs, 50% come from the 18 – 34 age range with the other
half from the 35 – 64 age range. Alberta has strong youth participation
compared to other jurisdictions in Canada and abroad. Despite a
good TEA rate for women in Alberta, the 5:4 ratio of men to women
entrepreneurs, more favorable than the national Canadian ratio,
still suggests increase in the role of women as a goal. In Canada as a
whole, women focus more on consumer services. In Alberta, women,
2
EXECUTIVE SUMMARY
GEM Al berta Report 2013
like men, are more involved in business oriented services. There is no
evidence for a gender gap in use of technology. Income distribution in
GEM is considered in three levels. In Alberta, the highest TEA rate is
in the upper third of the distribution followed by the middle third. In
Alberta, immigrants participate in entrepreneurship at rates above
the overall Canada TEA of 12.2%, but at levels well below the non-
immigrant population.
WORK – LIFE BALANCE AND SATISFACTION
Contrary to some suggestions, there is little difference in satisfaction
with work-life balance and general life satisfaction indicators between
entrepreneurs and the general population. The surprising result may
be that entrepreneurs don’t express a greater sense of autonomy.
THE STAGES OF ENTREPRENEURSHIP
Entrepreneurship begins from emergence of intentions leading to the
start-up process (nascent) and establishment of young frms. Those
reaching an age of 3.5 years joint the class of established businesses.
Finally there are to exit cases: termination or sale to new owners. The
middle stages are cover in earlier sections. Intentions (for the next
three years) in 2013 were twenty-two percent. Reported business
termination rate was fve percent and transfer to new ownership rate
was one and a half percent.
THE FRAMEWORK CONDITIONS FOR
ENTREPRENEURSHIP IN CANADA
Experts were asked to appraise several dimensions of conditions
supporting entrepreneurship in nineteen areas. The areas in which
Alberta conditions were found most favourable were physical
infrastructure, entrepreneurs’ social image, and opportunities to start-
up. In this the expert opinion parallels the perceptions found in the
adult population survey. The weakest areas were identifed as R&D
transfer to small frms and growing frms, education and training, skills
and knowledge to start-up. This last is in contrast to the optimism
about skills expressed in the population survey.
3
EXECUTIVE SUMMARY
GEM Al berta Report 2013
4
FINAL CONSDERATIONS
The overall analysis of the results led to the recommendation that
follow.
Recommendations
1. The culture of entrepreneurship in Alberta is healthy and activity
in 2013 is vigorous. Policy should be directed to improving the
quality of entrepreneurship and facilitation of innovative growth
oriented initiatives to support the goals of jobs, growth, quality of
life and sustainability.
2. Education and training for entrepreneurial thinking and innovation
should be enhanced at all levels. In the early years, schools do
attend to the central issue of promoting creativity and individual
initiative. This can be complemented with enriched exposure to the
basics of economic life. In later stages from secondary through
post-secondary education entrepreneurial innovation oriented
thinking should be included in all areas and not limited to business
programs. Entrepreneurship thinking can also play a larger role in
business education. One specifc topic deserves attention: evaluation
of risk.
3. Governments should examine opportunities to use procurement to
encourage young innovative Alberta growth frms.
4. Women entrepreneurs need the encouragement of improved
programs to support them after they have started a family. As
well, efforts need to be made to ensure they have as much exposure
to opportunities as men.
5. Government policy should aim to focus on small growing frms
with targeted programs and effcient handling of essentials for their
business through a small number of nimble agencies.
EXECUTIVE SUMMARY
GEM Al berta Report 2013
i
Executive Summary.................................................................................... 1
1. Introduction.......................................................................................... 5
Why Entrepreneurship?....................................................................... 5
Alberta, Entrepreneurship, and GEM.................................................. 5
The Nature and Role of Entrepreneurship.......................................... 6
Why GEM?............................................................................................ 7
Entrepreneurship, Innovation. Growth - The GEM Model................. 8
Research Methodology and Scope..................................................... 10
Adult Population Survey (APS).......................................................... 10
Provincial Expert Ssurvey (PES)........................................................ 10
Standard Socioeconomic Data............................................................ 11
2. The Practice of Entrepreneurship............................................. 12
2.1 Attitudes.............................................................................................. 12
Attitudes Infuence Entrepreneurship............................................... 12
Views of the Provincial Adult Population........................................... 13
2.2 Activity................................................................................................ 14
2.3 Aspirations.......................................................................................... 17
3. Entrepreneurs in the Economy................................................... 19
4. Entrepreneurship Demographics............................................. 22
Age...................................................................................................... 22
Education........................................................................................... 23
Income Distribution........................................................................... 24
Gender................................................................................................ 25
Immigrants......................................................................................... 26
5. Life-Work Balance and Life Satisfaction.............................. 28
6. The Phases of Entrepreneurship............................................... 29
7. The Alberta Experts Survey.......................................................... 30
7.1 Finance................................................................................................ 30
7.2 Government policies............................................................................ 31
7.3 Government programs........................................................................ 32
7.4 Education............................................................................................ 33
7.5 R&D Transfer...................................................................................... 34
7.6 Commercial and Service Infrastrucure, Market Operation,
Physical Infrastrucure........................................................................ 35
7.7 Cultural and Social Norms.................................................................. 38
7.8 Opportunities for New Firms and Availability of Talent................... 40
7.9 Intellectual Property Rights................................................................ 41
7.10 Climate for Women Entrepreneurs.................................................. 42
7. 11 High Growth...................................................................................... 43
CONTENTS
GEM Al berta Report 2013
ii
7.12 Innovation......................................................................................... 44
7.13 Youth and Young Adults................................................................... 45
Youth (14 – 20)............................................................................. 45
Young Adults................................................................................. 46
7.14 Theme Averages................................................................................. 47
7.15 Open-ended Responses..................................................................... 48
8. Implicationa and Conclusions................................................... 50
GEM Canada Team.................................................................................... 53
About THECIS............................................................................................. 54
Sponsor Recognition................................................................................ 55
Report Authors........................................................................................... 56
Notes................................................................................................................ 57
Figure 1. The GEM Model.................................................................................... 8
Figure 2. The Entrepreneurship Process............................................................. 9
Figure 3 Entrepreneurship as a Career.............................................................. 13
Figure 4. Capacity............................................................................................... 14
Figure 5 TEA (% pop) for Canadian Provinces.................................................. 15
Figure 6 TEA and its components compared to established businesses........... 15
Figure 7 Percent of TEA with some ambitious plans........................................ 18
Figure 8 Distribution (% of TEA) of initiatives over four sectors..................... 20
Figure 9 TEA rates (% of age group) for provinces........................................... 22
Figure 10 Percentage TEA activity in each educational cohort........................ 24
Figure 11 Percent Participation in TEA by household income.......................... 25
Figure 12 TEA rates (% of pop) by gender in each province............................. 26
Figure 13 TEA rates (% pop) among immigrants by province.......................... 27
Figure 14 Work – life balance and life satisfaction........................................... 28
Figure 15 Percent of respondents reporting each phase................................... 29
Figure 16 Finance............................................................................................... 30
Figure 17 Government Policies and Programs.................................................. 31
Figure 18 Government programs...................................................................... 32
Figure 19 Education........................................................................................... 33
Figure 20 Knowledge transfer........................................................................... 34
Figure 21 Commercial and service infrastructure............................................ 36
Figure 22 Market dynamics............................................................................... 37
Figure 23 Physical Infrastructure...................................................................... 38
Figure 24 Cultural and social norms................................................................. 39
Figure 25 Conditions for high growth............................................................... 43
Figure 26 Attitudes toward innovation............................................................. 44
Figure 27 The averages of the means in each theme......................................... 47
LIST OF FIGURES
CONTENTS
GEM Al berta Report 2013
5
WHY ENTREPRENEURSHIP?
Alberta, Entrepreneurship, and GEM
This report describes the frst survey of entrepreneurship in Alberta
that samples the entire adult population of the province from age
eighteen. Concern for entrepreneurship and the emergence and growth
of new frms is a central part of a current Government of Alberta
initiative to develop a strategy for small businesses.
“Recognizing the critical role [small] businesses fll,
the Government of Alberta is listening closely to
small businesses and entrepreneurs.”
- What we heard” - report on the SHAPE engagement
1
.
The concerns over small business refect goals for growth and for
employment. In the contemporary context, we must add the goals
of sustainability and quality of life
2
. Appropriately, the special topic
for GEM, worldwide, this year is “entrepreneurship and well-being”.
Broad and convincing evidence
3
shows that the scope and character of
entrepreneurship strongly infuences all four of these goals for Canada.
Consequently, the analysis of entrepreneurship is intended to inform
how it can promote:
• Economic growth,
• Job creation,
• Sustainability,
• Quality of life.
There can be little doubt that the present uncertain economic climate
prioritizes implementation of evidence based entrepreneurship
policy. Future growth (its extent and quality) requires attention to
innovation policy. Moreover, it is important to acknowledge that, in
Alberta at least, ‘intrapreneurship’ initiatives inside frms and social
entrepreneurship in the community are similarly important.
1. INTRODUCTION
1
Alberta Innovation and Advanced Education (2014) What We Heard, report on the SHAPE
engagement to support development of the strategy for small business,https://shape.alberta.ca/media/1039/sbs-whatweheard.pdf accessed 24 04 2014.
2
Hawken, P. The ecology of commerce : a declaration of sustainability, Harper Business, New
Yory, 2010 xv, 224 p.
3
van Praag, C. & Versloot, P.H. What is the value of Entrepreneurship, A Review of Recent
Research, Small Business Economics, 29, 351-383, 2007
GEM Al berta Report 2013
6
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”
4
(p.9).
The goal 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 creation of jobs for Albertans.
It is well known that we live in a knowledge economy. Knowledge
is the economic good that does not degrade in use. In practice, few
organizations can effectively realise the full economic return on all of
the knowledge they must possess for their core mission
6
. This leads
to the ‘spillovers’ that, for example, lead to productive clustering for
which the archetype is Silicon Valley, but which can be clearly seen
in Alberta’s oil and gas cluste
7
. Among the most productive forms of
entrepreneurship is turning ‘spillover’ knowledge into breakthrough
new ventures that escape and go beyond the limitation on large frms
that is imposed by the requirements to attend to their ‘core business’.
The infuential economist, William Baumol, pointed out
8
, 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 reshuffes the locus of accumulation
of money. It includes opening imitative consumer services
1. INTRODUCTION
4
Bosma, N., Wennekers, S., Amorós, J.E. (2012). Global Entrepreneurship Monitor 2011 Extend-
ed Report; Entrepreneurs and Entrepreneurial Employees Across the Globe, Global Entrepre-
neurship Research Association. P.59
5
Ahmad, N. and A. Hoffman (2008), A Framework for Addressing and Measuring Entrepreneur-
ship, 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
Langford C.H., Li, B. Ryan C., Firms and their problems in D. Wolfe, ed , Innovation in Urban
Economies, University of Toronto Press, Toronto, 2014. Chap. 6.
8
Baumol, W. Journal of Business Venturing, (1996) 11(1), 3-22.
GEM Al berta Report 2013
7
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
study is the productive entrepreneurial process, which is the main
driver of long-term transformative growth. Much interest centres on
entrepreneurship and innovation where 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 Tim
Horton’s coffee shops or the introduction of ‘Medicare’. In fact, analysis
of innovation shows that every success depends in large measure on
the non-technical social factors. Hall and Martin
9
point out that an
innovation must pass four hurdles: technical feasibility, commercial
viability, organizational capability, and social acceptability. 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.
WHY GEM?
First and foremost GEM is a regional, national and global project.
Participation in GEM brings Alberta into a rich context of data
from other provinces and from countries that cover 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 globally 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 the initiative grows out of some new idea. Most innovation
literature offers analysis from the frm perspective. GEM brings the
individual initiator back into focus.
As a complement, the framework environment that facilitates or
constrains Alberta entrepreneurs is assessed through the provincial
experts survey (PES).
1. INTRODUCTION
9
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.
GEM Al berta Report 2013
8
Entrepreneurship, Innovation, Growth -
The GEM Model
10
The interpretation of entrepreneurship from one 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. The GEM project regards
entrepreneurship as a process in a complex ecosystem and examines
individual entrepreneurs and ventures in this context. The GEM model
is shown in Figure 1. Boxes at the top left cover four basic requirements
and six effciency enhancing factors appraised from available studies,
(e.g. reports from Statistics Canada). At the centre left, the model
recognizes the importance of the social, cultural and political context.
Finally, nine factors shaping the innovation and entrepreneurship
framework complete the left column. These last are appraised by the
GEM provincial survey of expert opinion (PES). At the centre of the
diagram, the link between the established frms and independent
entrepreneurs is recognized. This takes large frms beyond their, often
incremental, innovations to their role as knowledge ‘reservoirs’ for
‘spillover’. Large frms can also act as demanding customers for a wide
range of goods and services from smaller frms. Finally, on the right is
the overall outcome: achievement of jobs, innovation and social value.
Figure 1. The GEM Model
10
The discussion in this section relies heavily on the Global Entrepreneurship Monitor Global
Reports for 2012 & 2013.
1. INTRODUCTION
Entrepreneurship
Activity
Attitudes Aspirations
Personal Values
and Background
Nine
Entrepreneurial
Framework
Conditions
Effciency
Enhancers
Basic
Requirements
National
Framework
Conditions
Social,
Cultural,
Political
Context
Existing Economic
Activity
(Primary Economy)
Outcome/Impact
(socio-economic
development)
Entrepreneurial Output
(new jobs, new value added)
+
_
+
_
+
_
Spillover
GEM Al berta Report 2013
9
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. 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 rely on a
healthy profle of the basic requirements and effciency enhancing
factor characterized on the left of the GEM model diagram.
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 discontinuance. Given variable contexts and
conditions, it is not inevitable that one phase leads to the next. Figure
2 shows the phases of entrepreneurship. In exploring the early phases,
the GEM project assembles data not available from business statistics.
Figure 2. The Entrepreneurship process
1. INTRODUCTION
Source: GEM Global Report 2011
GEM Al berta Report 2013
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RESEARCH METHODOLOGY AND SCOPE
Adult Population Survey (APS)
Using a telephone survey, an independent polling frm randomly
selected adults between the ages of 18 and 99. Their responses were
solicited to a series of detailed questions, phrased in everyday language,
that are used throughout the GEM international entrepreneurship
project. These are used to assess entrepreneurial attitudes, activities,
and aspirations of the provincial population. These provide a profle
of a representative cross section of the Alberta adult populations,
balanced for age and gender distribution. With the common
survey instrument in global use, it is possible to compare Alberta
entrepreneurship across participating provinces, to Canada as a whole
and internationally. In international data, the ‘working age’ range
of 18-64 was employed in other countries this year. Consequently,
Canada data are compared to other countries in the Canada Report
11
on the 18-64 age basis. A separate analysis of the senior population
has been made for Canada. The Canadian sample, expanded to include
the age range 18-99, permits identifcation of activities of seniors. For
analysis, the Alberta sample is weighted for age and gender to standard
Canadian demographic data.
Provincial Expert Survey (PES)
The expert survey is a questionnaire survey of 36 experts in Alberta
using the instrument developed for the global GEM project. The
experts come from different professional perspectives where they gain
consider¬able knowledge of entrepreneurial activities. Nine areas of
expertise are specifed by GEM: fnance, policy, government programs,
education and training, technology transfer, support infrastructure,
and wider society/culture felds. The survey instrument 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 Alberta. The fnal section solicits open
ended responses, which are coded to nine categories. The questions
11
Langford, C.H. Josty P. Holbrook, A. 2013 GEM Canada Report, THECIS, Calgary, 2014.
www.thecis.ca
1. INTRODUCTION
GEM Al berta Report 2013
11
cover nine major areas, creating the framework in which entrepreneurs
operate:
• 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 contextual 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 Al berta Report 2013
12
The key indicators from the GEM survey probe:
• entrepreneurial attitudes.
(How strong is the perception 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 Alberta 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
Alberta population . A key policy goal must be 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 both the
crucial productive entrepreneurs and those other entrepreneurs who
also contribute to job creation. GEM reports the public perception of
entrepreneurs’ hopes, struggles and successes. The 2013 Alberta GEM
survey paints the picture of a strong entrepreneurial culture.
2. THE PRACTICE OF
ENTREPRENEURSHIP
2
Newfoundland and Labrador, Economic Review 2014
GEM Al berta Report 2013
13
VIEWS OF THE PROVINCIAL ADULT POPULATION
Three key issues in the attitudes of the general population can shape
the entrepreneurs’ sense of their chances.
Do people see entrepreneurship as a good career choice?
Do they admire successful entrepreneurs?
Do popular media give entrepreneurship adequate attention?
A last question asked of the non-entrepreneurial population tests
contact with entrepreneurs: “Do you know someone who started a
business in the past 2 years?” The survey results are shown in Figure 3.
FIGURE 3. ENTREPRENEURSHIP AS A CAREER
Figure 3 shows that Alberta shares pretty much the same positive
attitudes as other provinces toward a career in entrepreneurship.
Data for G7 countries are similar but the Canadian position is healthy
in international comparison. Figure 4 shows data related to the
provincial population’s sense of capacity to engage in entrepreneurial
activity. Perception of opportunity over the next six months is
highest in Saskatchewan and Alberta. Confdence in having skills and
knowledge to undertake entrepreneurship is quite high in all provinces
except Quebec with BC showing a small lead. Inhibition of activity
from fear of failure is low in all provinces. It is below 30% in Alberta.
It is clear that Albertans undertake entrepreneurship with confdence.
Selling the concept is not necessary.
2. THE PRACTICE OF
ENTREPRENEURSHIP
GEM Al berta Report 2013
14
FIGURE 4. CAPACITY.
2.2 ACTIVITY
The heart of the GEM survey, the indicators that provide key
perspectives, 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 evaluating the status of entrepreneurship in a
jurisdiction and judging outcomes of policy.
The analysis centres on three measures that lead the tabulation below.
1) The nascent entrepreneurship rate, the percentage of the adult
population 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 adult
population 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) The combination of these two (counting each individual only
once) yields an overall indicator, ‘TEA’, the total early stage
activity, or entrepreneurship rate.
2. THE PRACTICE OF
ENTREPRENEURSHIP
GEM Al berta Report 2013
15
The pivotal TEA rates for the participating Canadian provinces
are shown in Figure 5. Note that Alberta has the highest TEA by a
signifcant margin.
FIGURE 5. TEA (% POP) FOR CANADIAN PROVINCES
Figure 6 shows provincial data for TEA with the component nascent
and new business indicators reported. Data for the established
businesses (those owner/managers reporting business active for more
than three and a half years) is added for comparison.
FIGURE 6. TEA AND ITS COMPONENTS COMPARED TO
ESTABLISHED BUSINESSES
2. THE PRACTICE OF
ENTREPRENEURSHIP
GEM Al berta Report 2013
16
Alberta’s TEA of 18.6% is spectacular among innovation driven
economies, easily exceeding that of the US leading 12.7% TEA. It
is six percentage points ahead of Saskatchewan at 12.6%. There is,
nevertheless, an aspect of some concern. The high TEA is driven by
the nascent (earliest stage) frm rate at 12.8%. The new business (3
– 42 months old) rate is 6.1%, a little less than half. The established
business rate is similar to that of Ontario, Manitoba or Saskatchewan
and less than BC. Perhaps the Alberta TEA should be seen as testifying
to a culture favourable to entrepreneurship but not necessarily as
supportive to new and growing frms. Some support for this view will
appear in the expert views in the PES (Chapter 7).
TEA values also provide insights into aspects of entrepreneurship such
as initiatives based on recognition of an opportunity vs. ones driven be
lack of options and necessity:
Province Alberta NL QC ON MB SK BC
%TEA 15.4 9.9 7.7 9.1 9.6 12.6 10.8
Opportunity
%TEA 2.2 .70 1.1 2.5 3.7 1.5 1.1
Necessity
It is clear that opportunities are the dominant drivers of
entrepreneurship across Canada.
A complement to high TEA rates is the question of the share of the
population who report having been informal investors (over the last
three years). Canada’s rate of 5.7% of the population leads the G7
countries. The provincial data (below) show that Ontario and Alberta
are the drivers.
Province Alberta NL QC ON MB SK BC Can
% ‘Angels’ 6.3 2.9 4.1 6.4 5.5 4.7 5 5.7
2. THE PRACTICE OF
ENTREPRENEURSHIP
GEM Al berta Report 2013
In innovation driven economies, male entrepreneurs generally
outnumber female. The relative rates by gender (mal, fem) for TEA and
established business (EB) by gender are:
Percent Alberta NL QC ON MB SK BC
TEA mal 20.5 12.6 11.9 14.2 19 15.2 13.9
TEA fem 16.5 9.2 7.2 9.7 8.4 12.8 11.3
EB mal 10.2 5.4 8.9 11.1 10.8 9.4 6.6
EB fem 6.4 3.2 4.8 5.8 6.9 6.9 6.6
The share of entrepreneurship by women is higher in Canada than
most G7 countries, at somewhat better than a 3:2 ratio. We see the
Alberta ratio is better than 5:4. Among the established businesses,
BC exhibits parity and Alberta and Manitoba have ratios the next most
favourable to women.
2.3 ASPIRATIONS
A fnal key aspect of early stage entrepreneurship is the entrepreneur’s
scale-up aspirations. Three areas are chosen to give a snapshot of the
level of ambitions and growth intentions of the new businesses: what
fraction expects substantial job growth, what fraction will produce new
products, and what fraction will be oriented to exports? The indicators
are the share of the population of entrepreneurs responsible for the
total early stage activity (TEA). These variables are likely to include the
most innovative new initiatives and they lead directly to the discussion
of entrepreneurship in the economy in the next chapter.
Is the business expected to create ten or more jobs and 50% or
more growth within the frst fve years (Hi jobs)?
Will the business introduce products new to all customers
(New product)?
Will at least 25% of the customers lie outside the country
(Exp 25% plus)?
17
2. THE PRACTICE OF
ENTREPRENEURSHIP
GEM Al berta Report 2013
18
The results for participating provinces are reported in Figure 7.
FIGURE 7. PERCENT OF TEA WITH SOME AMBITIOUS PLANS.
Alberta scores fairly high in all three categories. Some of the
characteristics of other provinces such as BC’s high export orientation
and Quebec’s combination of high job expectations with low export
expectations can be understood from their geography.
2. THE PRACTICE OF
ENTREPRENEURSHIP
GEM Al berta Report 2013
19
Baumol’s categories distinguish productive from non-productive
initiatives where the frst are seen as economically creative and the
second simply re-arranging the distribution of economic benefts.
Clearly, the productive category is closely tied to innovation. The total
entrepreneurship measures do not give indications of the degree to
which a given effort has productive content. (It was noted above that
the ‘unproductive’ may have positive aspects, as for example, in job
creation, and trying something new is the frst step in innovation.)
A frst set of indicators pointing to productive entrepreneurship are the
Aspiration indicators in the previous Chapter.
Alexander
12
introduced a second distinction relevant to economic
impact: “A portion of the economic effort in a city is supported by
non-local demands. But these city people in turn have need for local
services, thus a second urban function is … that which caters to the
[local] needs.” The frst category is a key driver of regional growth and
is associated much more strongly with sectors other than consumer
services. Similarly, it is commonly assumed that the transformative
(manufacturing, etc.) sector offers greater opportunity to ‘productive’
entrepreneurs.
GEM data offer indicators through cataloguing initiatives into four
sectors:
• Extractive (e.g. mining, agriculture),
• Transformative (e.g. manufacturing),
• Business oriented services,
• Consumer oriented services.
The distribution among these sectors (Figure 8) offers insight into
the sort of economic development that can result. Complementary
information comes from the fraction of TEA initiatives that report
reliance on high or medium technology. Finally, the degree to which
the entrepreneurs are developing initiatives with few or no competitors
is an innovation related indicator.
3. ENTREPRENEURS IN
THE ECONOMY
12
Alexander J.W. (1954) The basic-non-basic concept of urban economic function. Economic
Geography, 30(3) 246-261.
GEM Al berta Report 2013
20
FIGURE 8. DISTRIBUTION (% OF TEA) OF INITIATIVES
OVER FOUR SECTORS
A relevant reference point for interpretation of these data is the
sectorial distribution of established businesses identifed by owner/
managers who were encountered in the survey. For Canada this
distribution is:
% Est Bus Extr Transf Bus Ser Consum Ser
7.24 19.91 36.08 36.77
The low level of extractive sector entrepreneurial activity (Figure 8) is
surprising. The expected importance of extractive industries in Alberta
is missing and is, in fact, better exhibited by the established businesses.
Perhaps, the high fraction of business oriented services includes new
small businesses serving extractive industries. This is evident in an
“oil and gas” centre such as Calgary where a large fraction of business
services serve the core cluster.
Five of the seven provinces stand out for the high fraction of activity
in business oriented services. The other two illustrate the role of
consumer oriented services sector, which is the largest sector in
most other jurisdictions surveyed by GEM. The innovation literature
has recently emphasized the role of knowledge intensive business
services, KIBS
13
. The high incidence of business oriented services
among Canadian start-ups, especially those in Alberta may indicate
activity in the innovative KIBS sector, which is less apparent among
established businesses. Finally, a lower incidence of consumer oriented
3. ENTREPRENEURS IN
THE ECONOMY
13
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
GEM Al berta Report 2013
21
services, a sector likely to include locally oriented and less ‘productive’
entrepreneurial initiatives, is consistent with a relatively more
innovative entrepreneurial population. Shane
14
, in an award winning
paper, shows that such consumer service entrepreneurship may even
be negative for growth when too much local competition is generated.
He recommends that policy instruments be carefully designed to focus
start-up support on those new businesses that have clear growth plans.
The share of TEA addressed to new markets where no or few of
competitors offer the same product is also an indicator linked to
innovation and growth ambitions and offers a perspective on Shane’s
concern. In the participating provinces, the percentage of TEA
reporting such new markets is:
Province Alberta NL QC ON MB SK BC
% New Market 67.3 66.5 59.6 59.4 57 49.3 59.6
There is little difference among the provinces. A majority of
ventures appear to be offering novelty and avoiding too much direct
competition, a positive from the viewpoint of Shane’s cautions.
A fnal variable often considered to correlate with innovation is activity
in high or medium technology (OECD defnition) sectors. Perhaps
somewhat surprisingly, Alberta appears to be a leader (below):
Province Alberta NL QC ON MB SK BC CAN
% in Hi or 13.8 2.4 12.1 5.9 7.0 6.9 9.6 8.7
Med tech
One point will be documented below. There is no apparent gender gap
in the use of high or medium technology in Canada.
3. ENTREPRENEURS IN
THE ECONOMY
14
S. Shane, Why encouraging more people to become entrepreneurs is bad public policy, Small
Bus. Econ. 33, 141-149, 2009
GEM Al berta Report 2013
22
AGE
The international GEM adult population survey addresses the working
age population from 18 to 64, seniors are excluded. The population
is segmented into fve ranges: 18-24, 25-34, 35-44, 45-54, and 55-
64. This limitation will be followed here and seniors will be treated
separately in order to maximize overlap with other GEM documents.
Age distributions of TEA ‘entrepreneurship’ rates in the participating
provinces appear in Figure 9.
FIGURE 9. TEA RATES (% OF AGE GROUP) FOR PROVINCES
The highest participation rate among Albertans is in the 35 - 44 age
group, a result that is quite common in other jurisdictions. However, it
is only slightly above the rates for the youngest (18 – 24) age group and
the young adult group (25 – 34), both of which are above 15% of the
population in the age group. This pattern is shared with Saskatchewan.
As the Canadian national data show, younger entrepreneurs play a
large role across Canada. (Ontario’s over 20% rate in the 25-34 group
and Manitoba’s over 20% in the 18-24 age group deserve note.) An
alternative analysis asks not for the rate of TEA in an age group but
what fraction of the TEA entrepreneurs come from the age group. This
perspective reveals that 50% of Alberta’s TEA activity comes from 18 –
34 year old entrepreneurs, youth and young adults.
4. ENTREPRENEURSHIP
DEMOGRAPHICS
GEM Al berta Report 2013
23
Seniors are not covered in international data, but the Canadian APS
included respondents to age 99. This provided a fnal national sample
of 589 seniors and yielded a TEA of 2.7%, extending the downward
trend from the 55-64 group. In the Alberta sample there were 51
seniors. In this group, 65% thought the next six months offered good
opportunity for entrepreneurship compared to 70% for the total
population. Forty-two percent reported skills and knowledge to start
a new business (general population 57%), and twenty-three percent
reported they would be inhibited by fear of failure (general population
43%). Balancing lower confdence in skills with reduced fear of failure,
leads to expectation of a signifcant level of entrepreneurial activity.
Data show that approximately 6% in this small sample did report start-
up activity. One reports an export focused business.
It will be important to track changes in these results over the next few
years as the senior population increases.
EDUCATION
The educational backgrounds of the early stage entrepreneurs offer
further insights into the culture of entrepreneurship. The fraction with
at least a secondary diploma is a clear majority across the country, as
shown by the following data. Quebec stands out as leading:
Alberta NL QC ON MB SK BC
Fraction w. 0.75 0.78 0.83 0.75 0.66 0.68 0.69
secondary
Figure 10 shows the percentage rate of entrepreneurship among the
population groups with some secondary education (some sec), with
secondary degrees (sec deg), post-secondary degrees (post sec), and
with some post graduate experience (pos grad). Except in BC the
highest rates of entrepreneurship are among holder of post-secondary
degrees. This is especially apparent in Alberta. Those with postgraduate
experience represent the slight majority in BC and are clearly
signifcant in Alberta and, especially Newfoundland. However, the
secondary degree holders are the second most likely group to produce
entrepreneurs in Alberta. The important role of post-secondary degree
4. ENTREPRENEURSHIP
DEMOGRAPHICS
GEM Al berta Report 2013
24
holders is observed for Canada as a whole and for the US and the
UK. The percentage of post graduate experience entrepreneurs in the
US data is similar to the ML, BC and Alberta percentages, and it has
been suggested that this implies initiatives requiring high levels of
specialized knowledge.
FIGURE 10. PERCENTAGE TEA ACTIVITY IN
EACH EDUCATIONAL COHORT
INCOME DISTRIBUTION
GEM data includes household income distribution in thirds:
upper third, middle third, and lower third. Data in Figure 11 show
percentages of households in each income third that are involved in
TEA activities (note: response rate is low). Alberta stands out among
the provinces in having its highest rate of early stage entrepreneurship
among the upper third of the income distribution. Alberta’s overall
leadership in TEA rate is attributable to leadership in the rate among
upper and middle income households. In conjunction with the focus on
the business oriented services sector and the participation rate at the
post-secondary degree educational level a case emerges that Alberta
entrepreneurship focuses on more knowledge intensive, perhaps more
sophisticated, activities.
4. ENTREPRENEURSHIP
DEMOGRAPHICS
GEM Al berta Report 2013
25
FIGURE 11. PERCENT PARTICIPATION IN TEA BY HOUSEHOLD INCOME
GENDER
If we have seen above that men participate in entrepreneurship at a
higher rate than women (p.10), it is interesting to look at the gender
dependence of some attitudes in the full Alberta population sample.
Good Knowledge Fear Failure
Opportunity and Skill
men 72% 61% 30%
women 67% 53% 38%
The distribution of attitudes in the population foreshadows, more or
less proportionally, the gender difference in entrepreneurial activity
measured by TEA.
The provincial pattern of early stage entrepreneurship (TEA) given
above is repeated in Figure 12 where the overall percentage rates of
male (male) and female (fem) TEA are compared to the corresponding
gender dependence of opportunity (opp) vs. necessity (nec). Here, the
provincial data are compared to the national results. Although male
rates are greater than female throughout, given the high overall TEA,
Alberta gender differences are smaller compared to other provinces
except in the case of opportunity driven initiatives. The share of
necessity driven entrepreneurship among women is 2.7%, the high
among the provinces, but 2.7% represents a very small number of
respondents.
4. ENTREPRENEURSHIP
DEMOGRAPHICS
GEM Al berta Report 2013
26
FIGURE 12. TEA RATES (% OF POP) BY GENDER IN EACH PROVINCE
Examination of 4-digit industry codes indicates that Alberta women,
like men (but not women) in the Canada statistics, are more active
in business oriented services than consumer services and this more
similar to the men in sector orientation. Many of the business oriented
services are in areas that may serve the oil and gas industry.
Alberta women entrepreneurs perform very close to the national
distribution in use of new (latest year) or one to fve year old
technology with 7% new (national rate 8%) and 19% one to fve
years old (national 17%). The conclusion in the Canada report that
there is little evidence for gender bias in use of technology also
applies to Alberta. The share of Alberta women’s TEA addressing the
combination of new products and new market is 30%. The rate on this
variable for Canada is 32%.
IMMIGRANTS
The frst generation immigrant population expresses somewhat less
confdence than the general population of Alberta. Only 46% see good
opportunities in the next six months. Similarly 46% believe they have
the skills and knowledge and 43% report being inhibited by fear of
failure. Nevertheless, frst generation immigrants do engage in early
stage entrepreneurship at rates that would be regarded as high in most
jurisdictions. Figure 13 shows TEA rates for immigrants in the fve
4. ENTREPRENEURSHIP
DEMOGRAPHICS
GEM Al berta Report 2013
27
provinces where the sample of immigrant respondents was ffty or
more. In addition to frst generation, rates in the second generation
are reported and these two are combined in an overall immigrant
TEA. The Figure shows rates for the non-immigrant respondents. The
immigrants’ rates can exceed non-immigrant rates, but Alberta is a
striking exception.
FIGURE 13. TEA RATES (% POP) AMONG IMMIGRANTS BY PROVINCE.
The character of businesses launched in Alberta suggests some
ambitious aspirations. Over 50% report few or no competitors and one
third report greater than or equal to 25% export customers. A few use
technologies developed in the last fve years.
4. ENTREPRENEURSHIP
DEMOGRAPHICS
GEM Al berta Report 2013
28
This is section does not ask for indication of participation but for
opinions of a series of statements on a fve point scale from disagree
completely (1) to completely agree (5) with a neutral point at three.
These have to do with two types of statements: about work – life
balance, and about degrees of satisfaction with life and work. The
frst three ask for satisfaction with current work, ability to balance
needs of job with needs of personal or family life, and the way time is
divided between work and private life. The fourth asks for ability to
decide how work is done (autonomy) and the ffth is satisfaction with
income from current work. The last two address overall life satisfaction
in the form of the issue of whether the important things in life have
been accomplished and whether one would do things differently given
a second chance. Figure 14 shows the degree of agreement with the
positive form of the statement for both the early stage entrepreneurs
and the general population. Both means of responses and the mode
(most common choice) are shown to capture the overall balance of the
group and to identify where the largest group converged.
FIGURE 14. WORK – LIFE BALANCE AND LIFE SATISFACTION
There is surprisingly little difference between entrepreneurs and
the general population. A signifcant number of entrepreneurs do
show very high satisfaction with work not matched in the general
population where means are the same, implying a signifcant number
of entrepreneurs who are less satisfed. Perhaps a difference in sense of
autonomy is expected, but it is not reported.
5. LIFE – WORK
BALANCE AND LIFE
SATISFACTION
GEM Al berta Report 2013
As described in the introduction, the phases of entrepreneurship begin
from the emergence of an intention sampled as those with an intention
over the next three years (Fut SU). The next phase is the nascent
(Nasc) of activity within the past year. This is followed by the new
business phase (New Bus) with income for less than three and one-half
years. Beyond we identify established businesses (Est Bus). Finally,
some business owner/managers exited in the past year. There are two
cases; either the business was discontinued (Discint), or the business
continued with new owners (New own). Obviously, it is not the any
one business described as in more than one phase at the time of the
interview.
FIGURE 15. PERCENT OF RESPONDENTS REPORTING EACH PHASE.
Alberta stands high compared to other provinces in the frst two
phases, with an especially large gap between nascent activity and new
businesses. The Alberta discontinuance rate is also comparatively high.
Isolating the Alberta data we see the following in more detail:
% Fut %Nasc %New %Est %Discint %New
SU bus bus own
Alberta 22.4 13 6.1 8.5 5 1.6
Should it be a matter of concern that Alberta has high levels of early
stage interest but lower levels of new businesses? Is there a barrier
not as infuential in Quebec Saskatchewan, or BC that is faced by the
nascent entrepreneurs of Alberta? As well, is there a reason for a higher
ratio of discontinuance compared to successful sale of the business?
The reasons given within the survey framework for discontinuance
were: ‘not proftable’ - 19%, ‘alternate job or business opportunity’ –
34%, ‘personal reasons” – 12%, and ‘an incident’ – 37%. In Ontario and
Quebec, new owner rates exceeded discontinuance rtes.
29
6. THE PHASES OF
ENTREPRENEURSHIP
GEM Al berta Report 2013
30
7.1 FINANCE
The frst area explored in questions to the experts was fnance. Some
other documents (e.g. the Power of Three Report
15
) have suggested
that Canada ranks well in international comparisons and fnd that
the cost of starting a business has fallen signifcantly in Canada.
Moreover, the population survey rates the role of informal investor
participation in Canada (and Alberta) as a leader. Still, fnancing is
always a key challenge for young and growing frms. Questions posed
concern suffciency of equity funding, adequacy of debt funding,
suffciency of government subsidies, adequacy of private funding,
suffciency of venture capital, and availability of IPO funding for
new and growing frms. All are put in the positive so that agreement
indicates a favourable situation. The responses offer a fve point scale
ranging from ‘completely agree’ (fve) to ‘completely disagree’ (one),
with ‘somewhat’ and ‘neither’ as the intermediate descriptors. Most
responses, as shown in Figure 16, lean to the ‘somewhat false’. Both
mean of answers and the mode (the most frequently chosen option) are
shown in the Figure. The mode is an interesting secondary parameter
identifying the largest consensus on one point.
FIGURE 16. FINANCE
7. THE ALBERTA
EXPERTS SURVEY
15
C. McMorrow, C-A St Jean The power of three, EY Entrepreneurship Barometer, Canada, 2013http://www.ey.com/Publication, accessed 14/03/06.
GEM Al berta Report 2013
31
The answers especially call attention to weakness in debt, IPO and
venture capital funding. The latter two are not usually the source for
the early stage entrepreneurs identifed in the GEM study. Modest
approval is expressed for the role of private equity and government
subsidies. The problem with the latter is probably organizational as will
be seen in the section on government programs. Private source s are
not rated highly by the experts, but the population survey indicates a
higher rate of informal private investment in Canada than in any other
G7 country and Ontario and Alberta were the Canadian leaders at 6.4
and 6.3 percent of respondents reporting investments in the last three
years.
7.2 GOVERNMENT POLICIES
Issues with Alberta government policy start with policies such as
procurement consistently favour small and growing frms. The next
concerns high priority for small and growing frms at Federal and
Provincial levels. Other issues are as follows. Are necessary permits
and licenses available within about a week? In Alberta, taxes are NOT
a burden. Are taxes and other government regulations applied to small
and growing frms in a predictable and consistent way? Finally, in
Alberta coping with government bureaucracy, regulation and licensing
regulations is not diffcult for small and growing frms. Responses
on the same scale as above are shown in Figure 17 using the terms in
italics above as labels.
FIGURE 17 GOVERNMENT POLICIES AND PROGRAMS
7. THE ALBERTA
EXPERTS SURVEY
GEM Al berta Report 2013
32
The experts perceived that the Federal government policy attached
fairly high priority to small and growing frms, but did not rate priority
at the provincial level quite as highly. They did not see tax a burden
and rated Alberta policy as applied consistently. However, government
priority to small and growing frms as suppliers was rated low. This is
a serious area of concern since government procurement is one of the
few tools governments have to directly support innovative young frms.
Coping with regulation and licensing was seen as somewhat diffcult
and not timely. There has been a good deal of discussion of red tape
reduction. There seems to be signifcant room for further improvement
at the delivery level.
7.3 GOVERNMENT PROGRAMS.
Six aspects of government program delivery were probed, expressed in
the form positive to new and growing frms these are: a wide range of
assistance can be obtained through contact with one agency, science
parks and business incubators provide effective support, there are
an adequate number of programs, agency staff are competent and
effective in support to new and growing frms, almost anyone needing
help from a government program can fnd what they need, and
programs aimed at new and growing frms are effective. The Alberta
expert opinion is summarized in Figure 18.
FIGURE 18. GOVERNMENT PROGRAMS
7. THE ALBERTA
EXPERTS SURVEY
GEM Al berta Report 2013
33
Figure 18 shows that ratings are not favourable with the exception of
the availability of incubators and ‘science parks’. The lowest rating
attaches to the availability of programs through a single agency (‘one
stop shopping’). The mean for effectiveness is signifcantly above the
mode indicating a grouped minority more negative than the majority.
No mode is reported for number of programs because equal numbers
of experts chose 2, ‘partially false’ and 4, ‘partially true’. The responses
for number of programs and competence of government agents
indicate acceptable conditions.
7.4 EDUCATION
The survey asks for opinions on education from primary through post-
secondary and continuing and professional education. Statements for
evaluation of adequacy are adapted to goals appropriate to each level.
At the primary and secondary levels they are: teaching encourages
creativity and personal initiative, teaching provides instruction in
market economics principles. and attention to entrepreneurship and
new frm creation, At the post-secondary level they progress from
general to more specialized post-secondary programs: colleges and
universities provide adequate preparation for starting-up and growing
new frms, business and management programs provide adequate
preparation for starting-up and growing new frms, and professional,
vocational and continuing education systems provide good and
adequate preparation for starting-up and growing new frms. Figure 19
shows the means and modes of Alberta expert opinion.
FIGURE 19. EDUCATION
7. THE ALBERTA
EXPERTS SURVEY
GEM Al berta Report 2013
34
Education for creativity from the primary level and professional,
vocational and continuing education programs for start-up receive
neutral scores. All other aspects of education clearly need attention. In
particular, attention to secondary and general university and college
programs is important. Here it is important to keep in mind that the
goal is stimulation of productive entrepreneurship with innovation
and growth potential. It is not important whether the activity is as
a start-up frm or one within an established frm or organization.
Consequently the focus for education should be toward entrepreneurial
thinking and entrepreneurial attitudes valuable in all contexts and
available over a wide range of programs.
7.5 R&D TRANSFER
The issues under this theme are knowledge transfer and access
to embodied knowledge in the form of the best technologies. The
propositions evaluated are: new S&T and other knowledge is effciently
transferred from universities and other public research centres to new
and growing frms, new and growing frms have just as much access
to new research and technology as large, establishes frms, new and
growing frms can afford the latest technology, there are adequate
government subsidies for new and growing frs to acquire new
technology, S&T base effciently supports the creation of new world
class technology-based frms, and there is good support available for
engineers and scientists to have their ideas commercialized through
new and growing frms.
FIGURE 20. KNOWLEDGE TRANSFER
7. THE ALBERTA
EXPERTS SURVEY
GEM Al berta Report 2013
35
The expert opinion is that R&D knowledge is not effciently
transferred from universities, nor are new and growing frms on a
level playing feld with large frms. They do not have similar access
to new knowledge and they have insuffcient resources to acquire
the latest technology and government subsidies are insuffcient. Still
experts think Alberta has the capacity to effciently support creation
of a world class new technology based frm in at least one area, and
that Alberta engineers and scientists enjoy reasonable support for
commercialization of their ideas. Presently, there are some initiatives
to improve the situation. The hew NSERC Engage Grant program that
funds establishment of initial relations between university researchers
and (often new or smaller) frms with no frm matching funds
requirement is an example.
7.6 COMMERCIAL AND SERVICE
INFRASTRUCTURE, MARKET OPERATION,
PHYSICAL INFRASTRUCTURE.
In the important area of services and commercial infrastructure in
Alberta, fve needs are addressed:
• Subcontractors, suppliers, consultants:
- There are enough (subcontractors),
- Small and growing frms can afford them (afford subcontract),
- It is easy for small and growing frms to get these (access
subcontract).
• It is easy for small and growing frms to get good professional
legal and accounting (good legal acct).
• It is easy for small and growing frms to get good banking
(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. These probably refect the common lack of resources
facing a start-up.
7. THE ALBERTA
EXPERTS SURVEY
GEM Al berta Report 2013
36
FIGURE 21. COMMERCIAL AND SERVICE INFRASTRUCTURE
Market structures and market access are major framework factors
infuencing new frms that include dynamics, 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
(mkt) 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 ant-trust protection. The
expert evaluations are summarized in Figure 22. Markets are seen as
only moderately volatile and open, with cost of entry and established
frm resistance seen as limiting. This is an interesting disagreement
with data from the EY G20 Entrepreneurship Barometer
16
that fnds
Canadian cost of entry low and reports a recent sharp decline. There
is agreement that anti-trust protection is adequate. Alberta experts
expressed slightly more concern with consumer market volatility and
slightly less confdence in anti-trust legislation than the national panel
did.
Note that there was a split of opinion with 2, partly false, and 4, partly
true, drawing the same level of response, that produced a double mode
for B2B volatility and effectiveness of anti-trust.
7. THE ALBERTA
EXPERTS SURVEY
16
C. McMorrow, C-A St Jean The power of three, EY Entrepreneurship Barometer, Canada, 2013http://www.ey.com/Publication, accessed 14/03/06.
GEM Al berta Report 2013
37
FIGURE 22. MARKET DYNAMICS
Physical infrastructure for new and growing frms is appraised by the
expert view of fve statements;
• Physical infrastructure provides good support
(phis infrastructure).
• It is not too expensive to access good communication incl. phone,
internet, etc. (afford communist).
• A new frm can get access to communication (phone, etc.) in about
a week (1 week).
• New and growing frms can afford basic utilities incl. gas, water,
electricity, Etc.
• New and growing frms can get good access to basic utilities in
about a month (1 month).
All of these were found largely true in the Alberta environment with
means of 3.8 to 4.2 and modes of 4 or 5. This is an area of strength.
But the survey didn’t directly address whether it is easy to access
leading edge communication technology and that may lie behind such
reservations as were expressed.
7. THE ALBERTA
EXPERTS SURVEY
GEM Al berta Report 2013
38
FIGURE 23. PHYSICAL INFRASTRUCTURE
7.7 CULTURAL AND SOCIAL NORMS
The fundamentals of Alberta’s cultural values are regarded as generally
favourable to entrepreneurship. This is quite consistent with Alberta’s
high rate of entrepreneurship. All fve statements command a
reasonable degree of assent, as the side by side bars of the fgure show.
• Canadian culture is highly supportive of individual success
achieved through personal effort,
• Canadian culture emphasizes self-suffciency, autonomy and
personal initiative,
• Canadian culture encourages entrepreneurship and
entrepreneurial risk taking.
• Canadian culture encourages creativity and innovativeness.
• In Canadian culture, responsibility for managing his or her own
affairs lies with the individual (rather than the collective).”
There are some interesting differences from the responses of the
national expert panel. In the Canada report the frst three were parallel
with means from 3.1 to 3.5 However, the national panel mean for
encouragement of creativity and innovativeness was only 2.8, and
clear split of opinion led to equal responses of ‘partly false’ and ‘partly
true’ on the last. This split probably reveals a well-known fault line in
Canadian politics that is not prominent in Alberta.
7. THE ALBERTA
EXPERTS SURVEY
GEM Al berta Report 2013
39
FIGURE 24. CULTURAL AND SOCIAL NORMS
The work-life relationship is a second dimension of the social
environment. Do social, political and cultural conditions in Alberta
allow harmonization of personal and working life? That social
conditions in Alberta are favourable is mildly endorsed. There is
less confdence in the idea that labour regulations support work-life
harmony.
The related dimensions are whether Alberta entrepreneurs’ work and
personal life compares favourably to non-entrepreneurs. The expert
diagnosis is affrmative on both more satisfaction with work life and
more satisfaction with personal life.
7. THE ALBERTA
EXPERTS SURVEY
Social Regulations - Entrepreneurs Entrepreneurs
Conditions - Harmony Satisfed Work Satisfed
Harmony Personal
mean 3.1 3 3.6 3.4
mode 4 2 4 4
GEM Al berta Report 2013
40
7.8 OPPORTUNITIES FOR NEW FIRMS AND
AVAILABILITY OF TALENT
The fve propositions concerning the opportunities for
entrepreneurship are.
• There are plenty of good opportunities for creation of new frms.
• There are more good opportunities than people able to take
advantage of them.
• Good opportunities for new frms have considerably increased in
the past fve years.
• Individuals can easily pursue entrepreneurship opportunities.
• There plenty of good opportunities to create truly high growth
frms.
All of these fve opportunity statements were approved with mode
scores of 4, ’partially true’ (means from 3.5 to 4.1 save for the issue
of ‘easy’ pursuit of opportunity, 3.2). These indicated Canada offers
good opportunities for creation of new frms that exceed the number
of people able to take advantage of them. The opportunities have
increased in the past fve years and they include opportunities to create
truly high growth frms.
Addressing issues of entrepreneurial talent, the concern continues
that not many people in Alberta know how to start and manage a small
business or a high growth business. The issues of the set of enquiries
are: know-how to start and manage a high growth business, similar
know-how for a small business, experience in starting a new business,
ability to react quickly to a good opportunity, and ability to organize
the resources required. Scores are:
7. THE ALBERTA
EXPERTS SURVEY
Know-how Know-how Experience React quickly Organize resources
start high start small to opportunity for new bus
growth bus bus
Mean 2 2.3 2.4 2.4 2.2
Mode 2 2 2 2 2
GEM Al berta Report 2013
41
Experience is lacking and knowledge required of how to launch
and organize the resources required to start a new business is not
widespread. Again, these point to educational needs at various levels
from the more general to the specialized.
However, in agreement with the impressions reported in the Adult
Population Survey (APS), the Alberta experts mainly agree that
creation of a new venture is regarded as an appropriate way to become
rich and most people regard entrepreneurship as a good career choice,
media cover entrepreneurship favourably, and most people regard
entrepreneurs as competent and resourceful people.
The only difference from the APS is that the experts, probably from
more sensitivity to the risks, are less convinced that entrepreneurship
is an unqualifed good career choice.
7.9 INTELLECTUAL PROPERTY RIGHTS
In Alberta, intellectual property rights (IPR) are judged the subject
of adequate legislation (mean 3.7) that is enforced (mean3.3). New
and growing frms can trust that their IP will be respected (mean 3.3)
and it is accepted that inventor’s rights should be protected (3.8).
Nevertheless, it is not hard to identify an example of a highly original
Alberta idea implemented by a start-up frm that was appropriated
by multi-nationals. Defense of IP is expensive. Finally, protection of
copyright material from piracy is seen as problem. Protection is rated
at a mean of 3.1 and mode of 2. Of course, protection of intellectual
property rights is under Federal jurisdiction.
7. THE ALBERTA
EXPERTS SURVEY
Way to Desirable Success Gives Media Competent,
Become Rich Career High Status Cover Well Resourceful
Mean 3.9 3 4 3.9 4
Mode 4 2 4 4 4
GEM Al berta Report 2013
42
7.10 CLIMATE FOR WOMEN ENTREPRENEURS.
The APS identifed a high rate of entrepreneurship by women in three
western provinces with overall high rates (AB, SK and BC). In Canada,
reports from the earlier phase of GEM involvement suggest that the
decline in TEA from 2000 to 2003 could be associated with a decrease
in women’s activity. In the G7 countries in 2013, high TEA overall
is associated with a male to female entrepreneurship ratio no larger
than 3:2. Thus, there is extensive circumstantial evidence that the
conditions for participation by women are a key issue. The experts were
asked to evaluate fve conditions favourable to participation by women.
• Social services are available so that women can continue after
starting a family.
• Starting a business is a socially acceptable option for a woman,
• Women are encouraged to become self-employed or start a new
business’
• Men and women are equally exposed to good opportunities to
start a business.
• Men and women have the same level of knowledge and skills to
start a business.
Expert opinion on the Alberta conditions is summarized as follows:
No mode is reported for ‘knowledge’ responses 2 and 4 received the same number
The experts identify weak points in availability of social services to
facilitate working after starting a family – the ‘day care’ issues, and
in making sure women have exposure to good opportunities for
entrepreneurship. There is concern from a number of respondents
over how much encouragement women receive and there is split
opinion over whether men and women have the same level of
needed knowledge and skills. In Alberta, there is consensus that
entrepreneurship is seen as a socially acceptable option for women.
Services to Acceptable Encouraged Exposed to Knowledge
continue to start to start opportunity same as men
work new bus new bus same as men
mean 2.7 4 3.1 2.7 3.4
mode 4 4 4 2
7. THE ALBERTA
EXPERTS SURVEY
GEM Al berta Report 2013
43
7. 11 HIGH GROWTH
A critical issue for support of productive entrepreneurship is the
conditions for promotion of high growth. Expert evaluation is based on
fve conditons:
• Support initiatives are specially tailored for high growth
entrepreneurship,
• Policy makers are aware of the importance of high growth
activity,
• People working in entrepreneurship support have skills and
competence to support high growth,
• Potential for rapid growth is used as a selection criterion for
support,
• Government programs are highly selective when choosing
recipients of entrepreneurship support.
Evaluations are shown in Figure 25. In each case the largest number
(mode) of experts choose a positive reading of Alberta conditions, but
the means show signifcant concerns. The weakest points concerned
tailoring of initiatives, and skills and competence to be effective in
support of high growth entrepreneurship.
FIGURE 25. CONDITIONS FOR HIGH GROWTH
7. THE ALBERTA
EXPERTS SURVEY
GEM Al berta Report 2013
44
7.12 INNOVATION
Expert opinion of attitudes toward innovation is examined from the
point of view of companies and consumers. The six statements propose
that:
• Companies like to experiment with and new technologies new
ways of doing things,
• Consumers like to try out new products and new services
• Innovation is highly values by companies,
• Innovation is highly valued by consumers,
• Established companies are open to using new, entrepreneurial
companies as suppliers,
• Consumers are open to buying products from new entrepreneurial
companies.
The opinions are summarized is Figure 26.
FIGURE 26. ATTITUDES TOWARD INNOVATION
The frst pair assesses attitudes to novelty, new technologies and
practices for frms vs. new products and services for consumers.
Consumers are rated more open to changes, the second pair deals
with receptiveness to innovation as such. There appears to be little
difference. The third pair deals with receptiveness to becoming
customers to new entrepreneurial frms, and again consumers are rated
more open than established frms. The evaluation identifes a parallel
problem to that seen in government procurement. Neither government
no established frms are suffciently open to new frms.
7. THE ALBERTA
EXPERTS SURVEY
GEM Al berta Report 2013
45
7.13 YOUTH AND YOUNG ADULTS.
The GEM experts’ survey looks at the conditions facing youth and
young adults as entrepreneurs or aspiring entrepreneurs. The age
ranges consider youth in the 14-20 age range and young adults in the
21-34 age range. This choice gives insight into the situation of those 14-
17 who are too young by Canadian standards to be asked to complete
a questionnaire as youth entrepreneurs. The adult population survey
(APS) and includes 18 – 20 age youth in the frst segment of the 18-24
age group. The defnition of young adult includes the 21-24 age range
in the 18 -24 age interviewees along with the 25-34 age group in the
APS. Thus, there is some limit on comparison of these data with the
APS age data presented above.
YOUTH (14 – 20)
Five statements presented to the experts are discussed here:
• Youth have easy access to primary and secondary education.
• Families expect youth to contribute to the family’s fnance.
• Self-employed youth learn to develop their business activity
largely through their own experience and relationships.
• There are many opportunities to develop microbusinesses for
youth.
• Government programs effectively train and support youth
entrepreneurs.
Ratings are on the ‘false’ side for the 2nd, 4th, and 5th, but on the ‘true’
side for the 1st and 3rd.
The agreement that youth entrepreneurs learn informally and on
their own along with the perceived lack of government programs
correlates with the concern that the education system does not provide
7. THE ALBERTA
EXPERTS SURVEY
Primary & Contribute to Own Micro Government
secondary family experience business programs
mean 4.5 2.3 3.9 2.8 2.1
mode 5 2 4 2 2
GEM Al berta Report 2013
46
preparation for entrepreneurship, despite a universally accessible
primary and secondary education system. Perhaps, the perceived lack
of micro business opportunity is also related. That contribution to
family fnance is not prominent is consistent with the relative wealth of
Alberta families.
A particularly interesting model for a program for youth is the Shad
Valley program
17
conducted on university campuses. It provides
four weeks of enrichment for secondary students, with workshops
and lectures that focus on the sciences, engineering, technology
and entrepreneurship. This effectively links entrepreneurship with
sophisticated innovation.
YOUNG ADULTS
In Alberta both the 18 – 24 and the 25 – 34 age groups have
TEA rates above 15% (APS data, Ch. 4). Clearly both of these age
groups contributing to the Young adults group are quite active in
entrepreneurship in the context of any innovation driven economy.
On a comparative basis, stimulation of young adult entrepreneurship
cannot be considered a problem in Alberta. It is in this context that the
following six propositions should be read.
• Young adults are signifcantly involved in entrepreneurship.
• Young adults face greater constraints than the general population.
• There is an adequate system of business incubators that can be
accessed by young adults.
• Most who become entrepreneurs have been helped to start-up by
family or close friends.
• Financiers (banks, informal investors, angels) fund young adults’
business initiatives.
• Young adults consider life/work outside Alberta, Canada more
attractive.
Signifcantly Greater Incubators Helped by Financiers Outside more
involved constraints available family fund attractive
mean 2.4 3.3 2.4 4.3 2.2 2.7
mode 2 4 2 4 2 3
7. THE ALBERTA
EXPERTS SURVEY
17
http://ww.shad.ca. (accessed 13 05 14)
GEM Al berta Report 2013
47
7. THE ALBERTA
EXPERTS SURVEY
Without the complementary APS data, this appraisal would seem
rather grim. Yet it is quite reasonable to assume that the young
adult entrepreneurs do face greater barriers than some older groups,
do share with others the diffculty of fnding fnance, and do lack
incubators. These judgments are not comparative with respect to the
experience of these Alberta observers. On the fnal question of external
attractions, it is diffcult to generalize over the wide range of interests,
directions and aspirations of the age group.
7.14 THEME AVERAGES
An overview of the expert appraisals is provided by averaging the
means within each there, in interpreting these, the average of means
usually implies more positive framework conditions, but it needs
to be remembered that a few items are phrased to give low sores to
favourable framework conditions.
FIGURE 27. THE AVERAGES OF THE MEANS IN EACH THEME
GEM Al berta Report 2013
48
In the fgure themes are in decreasing order of Alberta means from left
to right. The Alberta results (AB) are compared to the Canada results in
the national experts survey (NES). The trends are largely similar. The
frst three high averages for Alberta are similar to the national values.
However, support for women, eight in Alberta, is second nationally.
Also, intellectual property rights, ffth in Alberta, are third nationally.
At the weak end, abilities and knowledge to start-up are lowest. This is
in interesting contrast to the large share of the population responding
in the APS who report having the skills and knowledge. Education and
training are rated weak by both Albert and National experts. Alberta
experts fnd Finance relatively better than it is seen nationally.
7.15 OPEN-ENDED RESPONSES
The fnal section of the Provincial expert survey asked for open-
ended responses in three categories; constraints, fostering factors,
and recommendations. In each category, three ordered responses
were invited. The open ended responses were coded in fourteen
categories that can be used here.
CONSTRAINTS
The largest number of constraints was in the fnancial support
category. The second largest number, taking priority into account,
concerned education and training. A third, widely cited,
constraint was in the area of the economic climate.
FOSTERING FACTORS
The leading categories among fostering factors identifed were
cultural and social norms, commercial and professional
infrastructure, and the economic climate. Government programs
and education and training were also widely mentioned.
RECOMMENDATIONS
The largest numbers of recommendations concerned education/
training and government programs. Recommendations about
commercial/professional infrastructure and fnancial support
followed.
7. THE ALBERTA
EXPERTS SURVEY
GEM Al berta Report 2013
49
That constraint on entrepreneurship arises from efforts to obtain
fnancial support is not a surprise and various recommendations arose
around these problems that inform the analysis leading to conclusions
below.
Education and training appears consistently between constraints
and recommendations and is refected by recommendations in this
report. It is interesting to fnd experts convinced that education and
training for entrepreneurship is a serious gap where a large fraction
of the population reports that they have the skill and knowledge
to start a new business. One interpretation would suggest popular
naiveté, but a subtler view would argue that currently healthy rates
of entrepreneurship refect the positive culture seen in the attitude
survey. Still, success and orientation to productive entrepreneurship
can be signifcantly affected by enhancement of entrepreneurship
education.
Various experts see the economic climate as both a constraint and a
fostering factor which demonstrates the multi-dimensional complexity
of the conditions surrounding entrepreneurship.
7. THE ALBERTA
EXPERTS SURVEY
GEM Al berta Report 2013
50
The Alberta entrepreneur. In 2013, the representative Alberta
entrepreneur is young (18-34), well educated, and from an
economically comfortable background. Still we must not forget the
older colleagues (35-80) who do account for half of the activity.
The project is likely to focus on business oriented services or
manufacturing, although a signifcant minority of start-ups will be
in consumer oriented services. It is likely that a new products or new
markets will be involved.
The Alberta entrepreneurship culture. In 2013, the vital signs
are all positive and competitive with any jurisdiction among the
‘innovation driven’ (developed) economies. The general population
has positive attitudes toward entrepreneurship and a good deal of
confdence in their ability to engage. (Expert opinion is uncertain about
such capacity.) It is unlikely that any signifcant increase in the level
of interest and activity above the current 18% TEA rate is desirable.
Rather attention needs to be directed to improving the quality of
the initiatives and the effectiveness of the support framework. A
cautionary observation is that it is the nascent entrepreneurship rate
that is driving the high TEA, not the new business level. Are there
signifcant barriers to the transition from the frst few months that can
be lowered, or are a number of the nascent project weakly conceived?
(A possibility, of course, is that entrepreneurship rates grew sharply in
2013 and the time has not passed for these initiatives to reach the new
business stage.)
Women’s entrepreneurship. The rate of participation by women
in 2013 has improved signifcantly from the reports in the last GEM
survey in 2003. However, it still is at only two thirds of the male rate.
In Alberta, in contrast to the rest of Canada, the business oriented
services sector, not consumer services, is the leading sector. Also, there
is no evidence of a gender gap in use of technology. Still expert opinion
found that services to support women who have started a family
are inadequate, and that women are not exposed to entrepreneurial
opportunities at the same level as men.
8. IMPLICATIONS AND
CONCLUSIONS.
GEM Al berta Report 2013
51
Goals. In the introduction, public goals were identifed as:
• Economic growth,
• Job creation,
• Sustainability,
• Quality of life.
It is clear that not all entrepreneurship serves these goals to the same
extent. Baumol
8
points out that the goals are served to the degree that
the venture does more than reorganize the fows of value, rather it
adds new value (productive entrepreneurship), that is it is innovative.
Shane’s prize winning work
14
shows that some entrepreneurship may
even be negative for growth and jobs by simply dividing markets
and reducing viability of incumbents. One reasonable indicator of
productive character is for a business to serve clients beyond its own
immediate community
12
. This has led to analysis of potential for
innovation and growth by exploring job intentions, new product goals,
new market efforts, export share, and exploitation of technology. The
literature on the innovation role of knowledge intensive business
services, KIBS13 suggests the promise of the major role in Alberta for
business oriented services. In this context, the expert survey indicates
Alberta policy is fairly well oriented to innovation and rapid growth,
but established frms are not suffciently open to the outputs of these
entrepreneurial frms.
Education and training. Despite the confdence in skills and
knowledge for start-up expressed in the population survey, expert
opinion is that lack of skills and knowledge is a problem and that
the educational system does not contribute much until the level of
professional development and continuing education courses aimed at
potential and active entrepreneurs. In the light of the goals, education
for entrepreneurship must be seen as education for innovative
entrepreneurship and entrepreneurial attitudes. This has benefts
beyond start-up activity for entrepreneurial and innovative activity
in frms and for social entrepreneurship. A good model educational
initiative is the Shad valley program
17
, mentioned above, which offers
summer enrichment for secondary students combining science,
8. IMPLICATIONS AND
CONCLUSIONS.
GEM Al berta Report 2013
52
engineering and entrepreneurs activities. At the post-secondary level,
entrepreneurial thinking should not be limited to business programs
but offered broadly across the institution.
Government policies and programs. Expert opinion values
government policies and programs, both provincial and federal, as
important supports to entrepreneurship. Nevertheless a number of
areas for improvement are identifed. One major one is modeled by the
US Defense Department. It has been a major stimulus to innovation
and frm growth through procurement. This tool of government
procurement plays a much smaller role here. For example, a large
government jurisdiction is the health care system which does not have
a good record of drawing on innovative young frms
18
. The experts
also call for more ‘one stop shopping’ for young and growing frms, a
reduction in time delays for obtaining necessary authorizations, and do
support efforts by government to reduce ‘red tape’. The fnal point is
that programs need to have a clear focus for young and growing frms
with criteria that clearly prioritize those with growth potential.
18
THECIS,The Alberta Health Innovation System, The Centre for Innovation Studies, Calgary,
2008.http://thecis.ca/cms3/userfles/Image/Health Industries Report Final -
Jan%202008.pdf accessed 10 05 14
8. IMPLICATIONS AND
CONCLUSIONS.
GEM Al berta Report 2013
53
GEM CANADA TEAM
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
Gary Gorman Memorial University,
St John’s, Newfoundland
Dennis Hanlon Memorial University,
St John’s, Newfoundland
Blair Winsor Memorial University,
St John’s, Newfoundland
Harvey Johnstone Cape Breton University,
Sydney, Nova Scotia
Étienne St-Jean UQTR, Trois Rivieres, Québec
Diane-Gabrielle Tremblay Téluq-université du Québec
Montreal
Charles Davis Ryerson University, Toronto
Neil Wolff Ryerson University, Toronto
Howard Lin Ryerson University, Toronto
Dave Valliere Ryerson University, Toronto
Nathan Greidanus Asper School of Business
University of Manitoba, Winnipeg.
Cami Ryan University of Saskatoon
Chris Street University of Regina
Cooper Langford University of Calgary
Chad Saunders University of Calgary
Ted Heidrick University of Alberta, Edmonton
Brian Wixted Centre for Policy Research on
Science and Technology (CPROST)
Simon Fraser University, Vancouver
GEM Al berta Report 2013
54
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 2013 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 2013 GEM Canada report is available at www.gemcanada.org
The 2013 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 2013 GEM Canada report, there will be provincial
reports available for BC, Alberta, Saskatchewan, Manitoba, Ontario,
Quebec and Newfoundland. These will all be available at
www.gemcanada.org in due course.
GEM Al berta Report 2013
55
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 2013 GEM Alberta report.
SPONSOR
RECOGNITION
GEM Al berta Report 2013
56
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
GEM Al berta Report 2013
57
NOTES
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.gemcanada.org
www.thecis.ca
doc_387600224.pdf