The wild wilderness of Canada’s innovation economy
Start-up companies in Canada are a little bit like animals in the wilderness.
Many die of natural causes soon after birth. Some survive a little longer, but are eaten by predators. Only a few survive long enough to run with the other young gazelles.
The key to creating a successful innovation economy in Canada is to help more of these young start-up animals survive—with their survival, we’ll likely see the development of high-growth companies that create jobs and help build a strong, new knowledge-based economy in this country.
How can we kick-start Canadian job creation and long-term growth? By creating an environment where entrepreneurs build growing companies that need to hire people quickly.
High-growth firms are critical drivers of prosperity. Somewhere between 4 and 10% of all new companies become high-growth firms, but they create the majority of jobs. US data show that in a given year, the top 1% of firms generate roughly 40% of new jobs. The top 5% contribute two-thirds of all new jobs.
Canada has the talent required to build global companies, thanks to our diverse, well-educated and highly-skilled workforce.
It is essential to draw more women into ambitious entrepreneurship. How do we do this? By killing the stereotype of the young, obnoxious male college drop-out as a prime entrepreneurial role model and by encouraging more women to make investment decisions in the risk capital community.
An average of 130,000 new small businesses were created in Canada every year during 2002 and 2006. If we apply the 10% population rule with respect to the US, where 600,000 new companies were started annually in the same period, Canadians are creating new companies at double the per capita rate south of the border.
With a strong entrepreneurial ecosystem, Canada’s high-growth ventures can develop and flourish in the wilderness, across all sectors and all parts of the country. In the process, these ventures will create new jobs, build a foundation for long-term economic growth and promote a stronger culture of made-in-Canada innovation.
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