Business launches cut by more than half
By Adam FreillCommercial Leadership Skills Development
Study conducted by BDC, in collaboration with University of Montreal, say not enough businesses are being started in Canada to replace those closing their doors.
Despite its population growing to 40 million people, Canada has 100,000 fewer entrepreneurs than it did 20 years ago. According to a Business Development Bank of Canada (BDC) study conducted in collaboration with the University of Montreal Innovation Centre and Millenium Quebecor, by 2022, only 1.3 people out of 1,000 had started a business, compared to three out of every 1,000 in the year 2000.
“This is worrying because entrepreneurship is crucial to the economy, fueling innovation and economic growth,” stated Pierre Cléroux, vice-president of research and chief economist at BDC.
The report identifies several factors contributing to this decline, including low unemployment, high wages, an aging population, and a more complex business environment.
The report also highlighted the unfortunate fact that one-third of new businesses close their doors within five years.
“This situation shows the gap between the intention to start a business and entrepreneurial success,” said Cléroux. “To close this gap, it is important for entrepreneurs to acquire essential skills to launch and grow their businesses, especially in an increasingly complex business environment.”
The report identifies four distinct groups of skills needed to succeed in business: the most crucial being grit and relationship skills, which prove essential at all stages of a company’s growth. The other skills making the list included: marketing and finance, leadership and people skills, and operational administration skills.
Daniel Jutras, rector of University of Montreal, said the study shows how important it is to better prepare those who want to start a business.
“With the work that has been done by BDC and Université de Montréal, we now have solid and valuable information with which we can develop training programs that address the concrete challenges faced by entrepreneurs, and that meet the needs expressed by our students,” he explained. “And that’s what all academics do: use reliable data to generate knowledge and pass it on.”