On November 6, 2018, the Fondation de l’entrepreneurship released its special edition “10 years of the Entrepreneurial Index Quebec (2009-2018).” CEDEC was on hand at the announcement and shares these key takeaways that are relevant to Quebec’s English-speaking community and our experience working with existing and prospective small business owners.
With a strong economy and low unemployment, businesses have been struggling to find qualified and skilled workers. The Fondation de l’entrepreneurship equally acknowledges that the rate of business ownership in Quebec has also decreased slightly, attributable in part to the strong employment opportunities in Quebec diverting potential entrepreneurs to the workforce.
Likewise, the closure rate (individuals who have closed a business at least once in their lifetime) has doubled since 2009, attributed primarily to the aging population. We would argue that it is also attributed to a lack of succession planning, a tide we are seeking to reverse as we work with partners such as SuccessionMatching to encourage better planning and transfer of established businesses to younger generations and continued offer of service in communities.
And while there is a marked growth in the overall rate of intention among the Generation Y (18-34 year olds) from 11% to 36.9% since 2009, in 2018 more than 1 in 4 businesses closed within a year of startup, accounting for 44% of closures in the past year.
The Indice notes that from 2014, the intention rate among university graduates increased from 20% to 28% while students in pre-university studies had a declining intention rate, from 18% to 15%. This trend is also reflected in the startup rates.
We agree. In 2014 CEDEC recognized the need for direct customized support for this cohort and created its Youth Start-Up team which helps young entrepreneurs take their ideas from intention to action. Working in partnership with adult learning centres, Cégeps, universities, organizations, service providers and entrepreneurs across Quebec, CEDEC’s Youth Start-Up workshops help us reach this clientele, to work with them directly to identify and develop their business ideas and move them through to action, staying with them every step of the way.
When their business is established, the CEDEC Small Business Support team can continue the relationship and provide timely support with on-going business advice and a suite of resources and direct partner referrals to grow the business according to its unique needs.
The statistics outlined in the Indice de l’entrepreneurship reinforce our confidence that the CEDEC Youth Start-Up and Small Business Support teams are essential to ensure there is a continuum of services and resources available to entrepreneurs at all stages of their business development. There is only room to grow.
For the first time, the Index examined the GenX cohort, (born mid 1960s to 1980) and confirmed that more than a third of current active owners are in this age group. Among GenXers, the intention rate has almost tripled from 9% to 26% from 2012-2018, having reached a peak of 34% in 2016. Unlike the younger Generation Y, this group benefits from having more financial resources and professional experience to apply to their business venture. They are also more proactive and tolerant of risk; and they are likely to be leaders and intrapraneurs within the workplace.
They are also likely to be parents, and were likely mentored by a parent. The Fondation de l’entrepreneurship reports that half of business owners reported having at least one entrepreneurial parent. This is an important indicator of the influence of entrepreneurship and business concepts at an early age and reinforces the importance of mentorship.
Additionally, entrepreneurship among women is on the rise. Since 2014, the gap has steadily closed between men and women on a number of fronts starting with their intention rates, from 10.4% to 4.8% and closing out the 2018 study, parity was reached between men and women in business ownership.
As the entrepreneurial culture in Quebec continues to grow and demographics shift, the number of immigrant entrepreneurs seeking to enhance their economic outlook in Quebec is likely to increase. Already the Index reveals that intentions and attempts to startup are globally two times more among immigrants, there is a drop off at the ownership stage, revealing the need for more support for immigrants to successfully launch and grow their business.
Finally, one interesting area of growth to acknowledge is the increase of “multientrepreneurs”. From 2012 to 2018 the number of owners with two or more businesses increased from 8% to 10.4% as they channeled their experience, knowledge and ability to manage risks to move new ideas from intention to startup. For full information about these statistics, visit the Indice entrepreneurial québecois online (in French only).