driving wealth creation & social development in saskatchewan
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20192019Saskatchewan
Driving wealth creation &
social development in
2019 GEM SASKATCHEWAN
REPORT
GEM Saskatchewan Report 2019
Chris StreetChad Saunders
GEM Saskatchewan Report 2019
Executive Summary ................................................................................... 1
2019 BASELINE ENTREPRENEURSHIP IN SASKATCHEWAN ................................................................................ 5 Introduction ............................................................................................... 5 Baseline Entrepreneurship ........................................................................ 5 EntrepreneurshipProfileinSaskatchewan,TEAand Established Businesses .............................................................................. 5 InvestmentProfile......................................................................................7
WHO THEY ARE ......................................................................................... 8 Entrepreneurial Culture ............................................................................ 8 EntrepreneurialAccessibility...................................................................10 Motivations ............................................................................................... 11 Summary .................................................................................................. 18
WHERE THEY ARE HEADED.............................................................20 BusinessExits..........................................................................................20 Sector Participation ................................................................................. 22 Aspirations...............................................................................................24 Summary.................................................................................................30
SASKATCHEWAN PROVINCIAL EXPERTS SURVEY..............31RecommendationFramework–SaskatchewanProvincialExpertsSurvey....31InternationalComparison-NECI....................................................................31SaskatchewanProvincialExpertsSurvey(SK-PES)........................................32CategoryOne:MostImportantIssuesforEntrepreneursinSaskatchewan...36CategoryTwo:ImportantIssuesforEntrepreneursinSaskatchewan............37CategoryThree:SecondaryIssuesforEntrepreneursinSaskatchewan.........37ClosingtheGapforSaskatchewanEntrepreneurs..........................................38
GEM Canada Team 2019........................................................................39
Sponsor Recognition...............................................................................40
Report Authors..........................................................................................41
Appendix 1 Global Entrepreneurship Monitor Description................................................................................42
About THECIS.............................................................................................47
Notes...............................................................................................................48
CONTENTS
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GEM Saskatchewan Report 2019
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COVID 19 DISCLAIMER
Whilethisreportwasbeingwritten,theprovincealongwiththerestoftheglobewasintheprocessofmanagingthespreadandeffectsoftheCOVID19pandemic.Thedataforthisreportwascollectedinmid-2019,priortoanyhintoftheeconomicinstabilityandshocktosmallbusinessesandentrepreneursbothregionallyandglobally.Thisreportnowprovidesaninformativebaselinethatcanbeusedtogaugetherateandtypeofeconomicrecoverycomingoutofthispandemic.Inotherwords,thisreportprovidesadescriptionofwhatentrepreneurshiplookedlikeinSaskatchewanimmediatelybeforethecrisisandcanhelpinformpoliciesaboutrecoveryandgrowth.
Report Structure
WhatfollowsinthisreportisalookatentrepreneurshipinSaskatchewanfor2018baseduponananalysisoftheAPSandPESfortheprovince1.ComparisonsaremadebetweenCanadaandotherprovinceswhereappropriate.AlbertaandManitobahavesimilarresourceeconomiesasSaskatchewansotheywereusedtoofferadditionalcontextforthediscussion.AggregateCanadianresultswerealsoprovidedwhereapplicable.GlobalGEMdatawereusedtocompareSaskatchewantoselectedG7economiesincludingtheUnitedStates.
Data Interpretation Caveats. In interpreting the comparative data presentedthroughoutthereport,considerationshouldbegiventotheunderlyingdata.First,whilecomparisonsbetweenSaskatchewanandotherregionsarestatisticallysound,inthatfindingsweredrawnfromadequatesamplesizesandusethesamedatacollectioninstruments,thecomparisonofcountryleveldatawithprovincialleveldatashouldbedonewithcautionsincetheyrefertocomparisonsbetweennationsandprovinces,whicharedifferentlevelsofanalysis.
Conventions in this Report.Comparisonsweremadeinthisreportusingthe“reasonabledifferences”approach.Thismeansthatincaseswherethepercentagedifferencebetweentwoormorefigureswererelativelyclose,within2%or5%ofoneanother,theywereconsidered
EXECUTIVE SUMMARY
1 Appendix 1 provides an explanation of APS, PES, the Global Entrepreneurship Monitor, and the GEM methodology.
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tobesufficientlycloseenoughastobepracticallyconsideredassimilarfigures.Forexample,ifthedifferenceinentrepreneurialactivityforthreeagegroupswerewithin2%ofeachother,theywereconsideredtobe,inthepracticalsense,essentiallysimilar.Actualfiguresareprovided in this report so that the reader can see these distinctions being made.
The Saskatchewan Context
StatisticsCanada’slatestfiguresfor2018showthattheSaskatchewaneconomyisapproximatelydividedbetweenaresourceeconomyandaserviceeconomy.Agriculture,oil,gas,andminingmakeup36%oftheSaskatchewaneconomywhileservicesmakeup34%.Constructionandmanufacturingcontribute7%and6%respectivelywhilepublicservicesmakeuptheremaining17%.ProvincialGDPpeakedin2014at$80.1B,thendippedfortwoyearsdueinparttofallingoilprices,recoveringby2017to$80.4B.In2018,provincialGDProseto$82.2B,thehighestpointinover20years.Theseindicatorsshowthatbusinessandbusinessopportunitiesintheprovincearegrowingandbalancedbetweenresource,extraction,andagrowingserviceseconomy.
Report Findings Overview
ThisGEMprojectsurveyedslightlyover1,500Saskatchewanresidentswithquestionsabouttheirattitudesandactivitiesassociatedwithentrepreneurshipintheprovince.Respondentswererandomlyselectedtotakepartinthesurvey.AnimportantstartingpointfortheSaskatchewanGEMresultsistoshowthestateofnewbusinessandsmallbusinessoperationintheprovince.Thisfirstsummarypointprovidesausefulbaselineforcomparingpost-COVIDentrepreneurialrecoverytopriorlevels.
Part One: 2019 Baseline Entrepreneurship in Saskatchewan
In2019,percapitatherewasa14%likelihoodthatapersonisanearly-stageentrepreneuran11%likelihoodthattheyareanownerofanexistingsmallbusiness,anda4%likelihoodthattheyarestartinga
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newbusinessunderthecontroloftheirexistingemployer.Theinvestorprofileforstart-upsshowsthatSaskatchewanlagstheregionalandnationalaveragesforangelinvestorparticipationratesbutleadstheregionalandnationalandaverageforinvestmentamounts.
Thefollowingpartshighlightkeyresultsfromthesurvey.
Part Two: Who They Are
Saskatchewan has a strong entrepreneurial culture.Approximately75%ofthosesurveyedindicatedthatentrepreneurshipwasdesirable,respected,andtalkedaboutintheprovince.CanadiansoverallhavepositiveattitudesaboutentrepreneurshipandtheSaskatchewanresults about entrepreneurial culture are in similar ranges as those foundinAlbertaandManitoba.
Only half of Saskatchewan residents think that entrepreneurship is accessible to them.Whenaskediftheypersonallyhavetheabilityandrisktoleranceforentrepreneurshipandiftheyknowotherentrepreneurs,halftherespondentssay‘no’andonly15%saythattheyconsideringtostartanewbusiness.ResultsinAlbertaandManitobashowthatpeopleinthoseprovincesbelievetheyhaveaslightlybetterabilitytobeentrepreneurs.
Ideals are a more important motivator than money.Earningwealthandmakingmoneywereanimportantmotivator,howeveradesiretomakeadifferencewasnoticeablymoreimportantforentrepreneurs.
Demographics like education, age, and region have little effect on entrepreneurial activity, but there is a small gender difference. Differencesinentrepreneurialactivitydonotappreciablydifferdependingonage,levelofeducation,age,orwhetheryouliveinAlberta,Manitoba,orSaskatchewan.Thereishowever,agreatertendencyformalestobeentrepreneursversusfemales.
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Part Three: Where They Are Headed
Businesses are exiting for non-business reasons. Retirement and personalreasonsweretheleadingreasonsforclosinganexistingsmallbusiness.Theseresultsindicatethattheopportunitytotakeoveranexistingbusinessisanattractiveandpotentiallyoverlookedopportunity.
The picture of new businesses in Saskatchewan is not the picture of existing businesses.Theresourceeconomyofmining,construction,agriculture,forestry,andfishingcurrentlyrepresents54%oftheexistingbusinessesthatwereinvolvedinthesurvey.However,serviceeconomybusinessesinhealth,education,socialservices,retail,hotel,andrestaurantsrepresents35%ofthebusinessesthatentrepreneursarecurrentlyworkingon.
Entrepreneurs’ aspirations are not dependent on scale, export, or high tech.Commonattributesofhigh-growthventures(scalability,internationaloperationorexport,andhigh-tech)arenotcommonaspirationsforSaskatchewanentrepreneurs.
Part Four: Saskatchewan Provincial Experts Survey
Saskatchewan’s entrepreneurial index matches that of regional and national comparators.TheNationalEntrepreneurshipContextIndex(NECI)showsthatentrepreneurshipinSaskatchewan,Alberta,andnationallyareessentiallythesame.ThisindexprovidesarecoverybaselineusefulforcomparingSaskatchewanwiththerestofCanada.
From a list of 12 business issues facing entrepreneurs in Saskatchewan, 4 are currently the most important.ApanelofSaskatchewanbusinessexpertswereaskedwhatwouldbestservegrowingalargerbaseofentrepreneursintheprovince.ThemostimportantissuesinincreasingSaskatchewanentrepreneurshipareinaccesstofinancing,educationalprogramingattheprimaryandsecondarylevels,governmentpolicies,priorityandsupport,andtechnology(R&D)transfer.
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Introduction
ThisisthefirstyearofacomprehensivesurveyofentrepreneurshipinSaskatchewansince2012.Thisreportprovidesinformationthatcanguideeffortsaimedatinformingreadersaboutthecapabilitiesand resources needed to launch and run businesses and to create environmentsinwhichtheirventurescanthrive.ThisanalysisisbasedontheSaskatchewan2018surveyofapproximately1,500adultsinSaskatchewan(balancedforgenderandagedistribution)andaProvincialExpertSurveyofapproximately35regionalbusinessprofessionalsusingthemethodologyoftheGlobalEntrepreneurshipMonitoring(GEM)Consortium.Thisapproachhasbeenusedfornearly20yearstocollectdatainover100economies.
Baseline Entrepreneurship
Sinceitsearlyinception,GEMfocusedonthephasethatcombinesthestageinadvanceofthestartofanewfirm(nascententrepreneurship)andthestagedirectlyafterthestartofanewfirm(owning-managinganewfirm).Takentogetherthisphaseisdenotedas“totalearly-stageactivity”(TEA).
Total Early-Stage Activity (TEA) are: • pre-startup entrepreneurs, & • startups less than 42 months
Individualsinvolvedasowner-managersinestablishedfirmsarealsoidentifiedasestablishedbusiness(EB)andthosethatchoosetodiscontinuetheirentrepreneurialactivityareincludedintheanalysis.
Established Business (EB) are: • businesses that have been operating for more than 42 months, & • businesses operating over 42 months that have shut down
Entrepreneurship Profile in Saskatchewan, TEA and Established Businesses
AlbertahistoricallyhasthehighestTEAratesinCanadaandnormallyoutperformsit’swesternCanadianpartners.AsFigure1.1reveals,the
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2019findingsshowthatSaskatchewan’sTEAratewaslowerthanthatofManitoba,Alberta,andnationally.
Thenumberofestablishedbusinessesarehigherthoughincomparisonwitharateof11.3%versus7.8%forManitobaand9.2%forAlberta,and7.4%forCanadaoverall.
Figure 1.1: TEA and Established Businesses Activities by Province and Nationally
Additionally,GEMprovidestheuniqueopportunitytotrackthosewhoareinvolvedinthestart-upofanewventureoractivityunderthecontrolofanemployer,knownas“EmployeeEntrepreneurs”or“Intrapreneurs”.InSaskatchewantheincidencerateofemployeeEntrepreneurswas4%,whichwasessentiallythesameforManitoba(4%),Alberta(5.5%),andCanadaoverall(4.7%).
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Investment Profile
Accesstocapitalisakeysuccessfactorforentrepreneurialventures.Inthissectiontheroleoftheangelinvestorisexplored.Participationratereferstothepercentageofstart-upsthatreceiveangelinvestment.Saskatchewanlagstheregionalandnationalaveragesforangelinvestorparticipationratesbutleadstheregionalandnationalandaverageforinvestmentamounts.Atypicalangelinvestorisaclosefamilymember.SeeTable1.1andFigure1.1foracomparativeprofileofangelinvestorsinSaskatchewan.
Table 1.1: Angel Investor Profile by Region
SK MB AB CA
Participation Rate % 3.9% 4.5% 6.7% 5.2%
Average Investment CAD$ $56,224 $41,099 $46,449 $51,740
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UsingGEMAPSdatathischapterinvestigatesboththeattitudesandactivityofSaskatchewanentrepreneurs.
Entrepreneurial Culture
GEMwasoneofthefirstinitiativestocollectdatarelatedtoattitudes,perceptions,andintentionstowardsentrepreneurship.The2019surveyaskedrespondentsthreequestionsaboutwhethertheythoughtstartingabusinesswasadesirablecareerchoice,ifentrepreneurshadahighlevelofstatusandrespect,andiftheyseestoriesinthemediaaboutsuccessfulnewbusinesses.
WhentakentogetherthesethreequestionscreateacompositeoftheentrepreneurialcultureinSaskatchewan.Theresultsforallthreequestionswerewellabovethe50%markindicatingthatthemajorityofrespondentshadfavorableattitudesaboutentrepreneurshipinprinciple.Resultsforthethreequestionsareasfollows.
Figure 2.1: Attitudes of Saskatchewan Respondents Towards Entrepreneurship: Starting a new business is a desirable career choice
Figure2.1showsthattwo-thirdsofrespondentsbelievethatentrepreneurshipisareasonablecareerchoice.Canadiansoverall,bothregionallyandnationally,generallysharedthisattitude.
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Figure 2.2: Attitudes of Saskatchewan Respondents Towards Entrepreneurship: Successful entrepreneurs have
high level of status and respect
Figure2.2showsthatfouroutoffiverespondentsbelievethatentrepreneursarerespected,anattitudethatisconsistentacrossthecountry.
Figure 2.3: Attitudes of Saskatchewan Respondents Towards Entrepreneurship: You often see stories in the media about successful
new businesses
Figure2.3showsthatthreeoutoffourrespondentsrememberseeingmediastoriesaboutentrepreneurs.Thisresultisagainconsistent
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acrosstheregionandnationally.Thisquestionalsorecognizesthatrespondentsrememberseeingthesestoriesinthemedia,whichsuggeststhatitissomethingthattheypayattentionto.
Summary - Saskatchewan has a strong entrepreneurial culture.
Withanaverageresponseofapproximately75%overall,theseattitudequestionsshowthattherearestrongbeliefsabouthowfavorableitistobeanentrepreneur.ThesebeliefsindicatethatthereisastrongcultureinplaceinCanadaandSaskatchewanforentrepreneurship.
Entrepreneurial Accessibility
Inadditiontobroadattitudedata,GEMprovidesmicrolevelfindingsaboutpersonalnetworks(knowledgeofanentrepreneur),perceivedstrengthsandweaknesses(opportunity,skillsandexperience,fearoffailure),andfutureintentions(desiretostartanewbusinessinthenextthreeyears).Saskatchewan’saresummarizedbelowinanationalandprovincialcontext(Figure2.4).
Figure 2.4: Perceptions of Saskatchewan Respondents Towards Entrepreneurship by Region
Saskatchewanrespondentsreportedsimilarcharacteristicsastheirregionalandnationalcounterpartsaboutwhethertheyknewentrepreneurs,whethertheybelievedtheyhadthecapabilitiestobeanentrepreneur,andtowhatdegreetheywererisk-averseandwereafraidtofail.Responseshoveredinthegeneralrangeof50%,suggestinga50%-50%splitregardingbeliefs.
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Saskatchewanrespondentswere,however,morelikelytosaythattheylackedtheopportunitytobeanentrepreneurrelativetothoseinManitobaandmorebroadlyinCanada.Fewerperceivedopportunitiesmaybetheresultofadepressedoilandgasresourceeconomy,whichwouldexplainwhythoseinSaskatchewanandAlbertaweremorepessimistic about this.
Whenaskedmoredirectlyiftheyhadtheintentionofbecominganentrepreneur,thoseinSaskatchewanwereslightlylesslikelytosayyes.Nevertheless,asFigure2.4shows,therewaslessthan4%separatingSaskatchewanfromthehighestreportingregion.
Summary: Only half of Saskatchewan residents think that entrepreneurship is accessible to them.
Whenaskediftheypersonallyhavetheabilityandrisktoleranceforentrepreneurshipandiftheyknowotherentrepreneurs,halftherespondentssay‘no’andonly15%saythattheyareconsideringtostartanewbusiness.ResultsinAlbertaandManitobashowthatpeopleinthoseprovincesbelievetheyhaveaslightlybetterabilitytobeentrepreneurs.
Theseresultscontrastsomewhatwiththeearlierresultsaboutentrepreneurialculture.Whatwe’veseensofarisastrongpositiveentrepreneurialculturewithmiddlingbeliefsaboutbeinganentrepreneur.OneinterpretationofthesecollectiveresultsisthatSaskatchewanrespondentsthinkentrepreneurshipisgood,butperhapsnotforthem.
Motivations
GEMiskeenlyawareoftheimpactsofmotivationsforstartingabusiness.Respondentswereasked:Wereyouinvolvedwiththisstart-uptotakeadvantageofabusinessopportunityorbecausetherewasnobetterchoiceforwork?Thedistinctionismadebetweenopportunity-basedventuresandthosethatarecreatedoutofnecessity.CountrieslikeCanadaareprimarilyinnovation-driveneconomiesthatareexpectedtohavehighlevelsofopportunity-basedentrepreneurship.
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Thisisbecauseopportunitiesforemploymentaregenerallymoreabundant,offeringindividualsdifferentalternativestomakealiving.ThemotivationsforSaskatchewan’sentrepreneursareshowninFigure2.5.
Figure 2.5: TEA Motivations by Region
Saskatchewanrespondentsshowedthemselvestoberathermoreidealisticthanmightbeexpectedintermsofwhytheywantedtostartanewbusiness.Themostfrequentlyselectedanswertowhytheyareinvolvedwithastart-upwastomakeadifferenceintheworld.Furtherinformationaboutwhatkindofdifferencewasnotcollectedsoitisnotpossibletosaywhetherrespondentswerethinkingaboutcreatingjobs,improvingtheenvironment,contributingtosocialcauses,orotherwaysofmakingadifference.Thesocialgoodmotivationwasnoticeablymorefrequentthanthenexttwoeconomicreasonsofmakingalivingandgettingrich.Oneexplanationforthispatternisthatentrepreneursareinfluencedbymedia,popculture,andbusinessreportingabouttheimportanceofsocialcauses.Thesepeoplearelisteningintentlytothismessage.
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WHO THEY ARE Oflesserimportanceisfamilytiestoabusiness.Carryingonthefamilybusinesswastheleastlikelymotivationreported.Laterinthereportthereisdatathatthemostfrequentreasonforexitingabusinessisretiring.Lowmotivationtocontinuethefamilybusinessandexistingbusinesses closing due to retirement support each other to suggest a macrotrendabouttheexitingofsmallbusinessesinSaskatchewan.
Summary: Ideals are a more important motivator than money.
Earningwealthandmakingmoneywereanimportantmotivator,howeveradesiretomakeadifferencewasnoticeablymoreimportantforentrepreneurs.
Demographics
UsingtheGEMAPSdata,thissectionexaminesthedemographicdimensionsofSaskatchewanentrepreneurshipingreaterdetailthroughconsiderationofage,education,regionlocation,andgender.
BelowarethebreakdownsofSaskatchewanEntrepreneurshipbyfourdemographicfactors: • age • education • regional location • gender
Astheresultsshow,reasonablydifferencesexistonlybythefactorofgender.
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Age
Figure 2.6: TEA % by Age and Region
WhilethereareavarietyofdifferencesinthenumberofentrepreneursinthegivenagegroupswithinAlberta,Manitoba,andCanadaoverall,inSaskatchewanthefrequencyofentrepreneursisabout16%acrosstherangefrom18yearsoldto44.Adropoccursinlateragesfrom45to64.Thisdropoffoccursacrossthecomparisonregionsandlikelyrepresentsagecohortsintheirprimewageearningyears,thosewhomaybemorelikelytodecidethattheywillstaywiththecareerthattheyhave.Thefinalgroup,65+,representsthoseatorapproachingretirementwhohavethelowestfrequencyofentrepreneurs.Figure2.6showsthatageappearstohaveminimaleffectonthenumberofentrepreneurs in the province.
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Figure 2.7: Established Business % by Age and Region
Similarly,agedoesnotseemtohavealargeeffectonthenumberofestablishedbusinessesinSaskatchewan.Establishedbusinesses,thosemorethan3½yearsold,aremorelikelytobeownedbythose35+,butonceinthisbandthepercentageofrespondentswhoareestablishedbusinessownersisreasonablystableatapproximately12%.
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Education
Figure 2.8: TEA % by Education Levels and Region
Figure 2.9: Established Business % by Education Level and Region
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Figures2.8and2.9generallyshowthatthelevelofeducationisconsistentacrossnewentrepreneursandestablishedbusinessowners.WhetheryoulookatthosewhohavesomehighschoolorthosewhohaveaPhD,thefrequencyofthosewiththatlevelofeducationisessentiallythesame.
Gender
Globally,andnationally,agendergapisreportedforfemaleentrepreneurs.Saskatchewanresultsareconsistentwiththistrend.
Figure 2.10: TEA by Gender and Region
Whilethedifferencesaresmall,thereisanoticeablegapbetweenthefrequenciesofmaleentrepreneursversusfemale.Directfollowupquestionsthatmightallowforunderstandingwhythisdifferenceexistswerenotpartofthesurveysoitisnotpossibletosuggestwhythisdifferenceexists.TheonlyinterestingnoteisthatthedifferencedisappearsinAlberta.
“Nascent:referstopre-start-upentrepreneurs.NascentFemaleandNascentMaledataallowustoseethedifferencebetweenthosewiththenascentintentandthosewhohavealreadylaunchedastart-up.Thedatashowsthat7%and9%ofSaskatchewanTEAarepre-start-
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up,meaningthat3%and5%arelaunchedwithinthelast42months.Weseethesamepatternfavouringmalesoverfemales,whichcanbeinterpreted as meaning that there is a small but consistent gender imbalance.
Thisdifferencefallswithinthereasonabledifferencesprinciple,meaningthatifthiswasafactorotherthangenderitwouldlikelybeconsideredasnotbeingpracticallydifferent.Thereaderislefttomaketheirownconclusions.
Summary: Demographics like education, age, and region have little effect on entrepreneurial activity, but there is a small gender difference.
Differencesinentrepreneurialactivitydonotappreciablydifferdependingonage,levelofeducation,age,orwhetheryouliveinAlberta,Manitoba,orSaskatchewan.Thereishowever,agreatertendencyformalestobeentrepreneursversusfemales.
SUMMARY: WHO ARE THE ENTREPRENEURS IN SAKSATCHEWAN
ThefirstobservationthatstandsoutinreviewingtheGEMSaskatchewandataisthattheprofileofentrepreneursinSaskatchewanisnotverydifferentfromtheprofilesfromregionalcomparisonsinAlbertaandManitobaandnationallyinCanada.Differencesdoexistbutarerelativelysmallincomparisontogenerallevelsoffactorssuchasentrepreneurialculture,accessibility,andmotivation.Thelargestbetween-regiondifferencesareintheeducationlevelofentrepreneursandestablishedbusinessownerwhereinSaskatchewanthereisarelativelysimilardistributionofeducationlevelsfornewentrepreneursandestablishedbusinessowners.Thereisaslightspikeinthenumberofestablishedbusinessownerswhoreporthavingsomehighschool;becauseasimilarspikeexistsinAlbertabutlesssoinManitobawespeculate that this number is attributed to resource and agriculture sector businesses.
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Forthe2019GEMSaskatchewansurvey,onegoalwastoexaminegendereffectsandspecificallywhetherthereweredifferencesinwhowasstartingnewbusinesses.Wefoundthat10%offemalesinthegeneralsurveywereengagedinearly-stageentrepreneurshipcomparedto14%ofmales.It’sanopenquestionwhetherthisdifferenceisofpracticalimportance.Amorepracticalquestionmaybewhythenumbersarethatlowtobeginwith,whetheritismoreimportanttoboostfemaleengagement4%tomatchmaleengagementortoboosttheengagementrateoverall.Ifthegapweremoreprevalent,10%forfemalesand20%formales,thedifferencewouldmorelikelybeconsidered to be a practical issue. We leave it to the reader to consider this question.
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InthissectionwelookattheimmediatedirectionthatentrepreneurshipistakinginSaskatchewan.Dataonbusinessexits,andthereasonsforexitsprovidesaviewonbusinesssurvivalratesintheprovince.Comparisonsbetweenthestructureoftheestablishedbusinesscommunityandthenewstart-upcommunityshowshowthebusinessstructureischangingintheprovince.Dataaboutentrepreneurs’plansforexpectedsizeoftheirbusiness,export,anduseoftechnologyprovidesinsightaboutaspirationsforthefuture.
Business Exits
Justastheformationandestablishmentofnewenterprisesisimportant,exitsfromabusinessalsoformsanessentialpartoftheentrepreneurialprocess.Therearetwotypesofexitsthataretracked.Ifthebusinessdidnotcontinueaftertheentrepreneurleftthebusiness,thenthisisdenoteddiscontinued.Ifthebusinesscontinuedaftertheentrepreneurleftthebusiness,thenthisisdenotedexited.ThecomparativefindingsforSaskatchewanarefoundinTable3.1.
Table 3.1: Business Exits
Saskatchewan Alberta Manitoba Canada
Discontinued 3.9% 4.9% 3.9% 3.4%
Exited 1.7% 3.6% 3.1% 4.4%
The‘Discontinued’canbeconsideredlessoptimalfortheprovincialeconomybecauseitrepresentsabusinessthatcloseditsdoorswhile‘Exited’representsthebusinessesthatremainedopen.InSaskatchewanthetrendwastoseerelativelyfewerbusinessesremainopenaftertheentrepreneurleft.The1.7%figureofexitedbusinessescomparespoorlywithAlberta,Manitoba,andCanadaoverall.IdeallywewouldwanttoseethetypeofpatternshownintheCanadianfigureswherethenumberofexitsisgreaterthanthenumberofdiscontinuesbecausethispatternmeansthatthereareproportionatelymorebusinessesstayinginoperationaftertheentrepreneurleavesthantherearebusinessesclosingdownaftertheentrepreneurleaves.Figure3.1showsthereasonswhySaskatchewanbusinessownersleft.
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Figure 3.1: Reasons for Leaving the Business
TheeightreasonsforwhyabusinessclosedareshowninFigure3.1.Thefirsttwomostfrequentreasons,retirementandfamily/personalreasons,representalmost1/3oftheresponses.Thesetworeasons share the context that an entrepreneur made a non-business relateddecisiontodisengagefromthebusinessbutdidnothavetheopportunitytotransitionthatbusinesstoanotherperson.Theremaining reasons are common business-related problems such as low/noprofitabilityorinabilitytogetfinancing.Thenon-businessrelatedreasonsaresignificantbecausetheysuggestthatathirdofthebusinessexitsinSaskatchewanmightpossiblybemitigatedifnewentrepreneursweremotivatedtotakeoverthesebusiness.
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Summary: Businesses are exiting for non-business reasons.
Retirementwastheleadingindicatorforclosinganexistingsmallbusinessandadesiretotakeoverthefamilybusinesswasaminormotivationfornewentrepreneurs.Theseresultsindicatethattheopportunitytotakeoveranexistingbusinessisanattractiveandpotentiallyoverlookedopportunity.
Sector Participation
Figures3.2and3.3showthefrequencydistributionofthetypesofbusinessesthatnewentrepreneursareopeningorplantoopenandthetypesofestablishedbusinessesthatareoperatinginSaskatchewan.
Figure 3.2: TEA % by Sector and Region
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Figure 3.3: Established Business % by Sector and Region
Figures3.2and3.3providetwoimportantobservations.First,theyshowadiversifiedeconomyinthatbothestablishedandnewbusinessesexistinseveraldifferencesectorsincludingresources,services,andmanufacturing.Thesecondobservationisthatthestructureoftheestablishedbusinesseconomyisdifferentfromthenewbusinesseconomy.TheestablishedbusinesseconomyinFigure3.3ispredominantlyresource-basedwithagriculture,forestry,fishing,mining,andconstructionmakingupoverhalf,54%,ofthecurrenteconomy.Figure3.2showsadifferentdirection.Thisfigurerepresentsthesectorswhereentrepreneursareopeningorplanningtoopenanewbusiness.Theresourcesectorissignificantlylessrepresentedwithonly19%ofnewentrepreneurialactivity.Instead,businessesassociatedwithhealth,education,socialservices,retail,hotels,andrestaurantsshowthemostentrepreneurialactivitycomprisingmorethanathird(35%)ofthesectorbreakdown.Whenwerecalltheearlierdatathat‘makingadifference’wasthemostpopularreasonforbeinganentrepreneur,theobservationinFigure3.2furthersupportsthesocialenterpriseorientationofnewentrepreneurs.
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Summary: The picture of new businesses in Saskatchewan is not the picture of existing businesses.
Theresourceeconomyofmining,construction,agriculture,forestry,andfishingcurrentlyrepresents54%oftheexistingbusinessesthatwereinvolvedinthesurvey.However,serviceeconomybusinessesinhealth,education,socialservices,retail,hotel,andrestaurantsrepresents35%ofthebusinessesthatentrepreneursarecurrentlyworkingon.
Aspirations
ThissectionshowsthefutureaspirationsofentrepreneurshipintheeconomyusingtheGEMAPSdatafocusingonfactorslikejobcreation,exportorientation,innovation,andtheuseoftechnology.
Inrecentyears,increasedattentionhasbeenpaidtoparticulartypesofentrepreneurshipthathavetodowithaspirationlevelsoftheindividualsinvolved.Whilethedegreeofinvolvementinentrepreneurialactivityingeneralisessentialinformation,manyacademicsandpolicymakersareinterestedinparticulartypesofentrepreneurialactivity.Thefollowing(ambitious)typesofentrepreneurshipcanbedeterminedusingGEMdata:
• Entrepreneurshipwithhighgrowthexpectations; • Entrepreneurshipwith(self-reported)innovativecharacteristics;and • Entrepreneurshipwith(self-reported)internationalorientation.
Job Creation
JobcreationisoneofthemostdiscussedconsequencesofentrepreneurshipandisofconsiderableimportanceinSaskatchewan.ThebasicGEMsurveyassessmentofjobcreationpotentialisaquestionaboutaspirationfordevelopmentoverthenextfiveyears.Thequestionbeginswithareportofthecurrentlevelofemploymentandisfollowedbyaskingfortheprojectednumberofemployeesinfiveyears.Figure3.4showstheresultsforfouremploymentlevelaspirationsforSaskatchewanentrepreneurs.
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Figure 3.4: TEA and Established Business Job Aspirations Now and in 5 Years for Saskatchewan
Figure3.4showsthatcurrentandfutureaspirationsforjobcreationareessentiallythesame.Newentrepreneursandestablishedbusinessownersbothplantohavesameworkforcesof1-5employeesnowandinthenearfuture.
Internationalization
Figures3.5and3.6showtheinternationalorientationofnewentrepreneursandestablishedbusinessownersinSaskatchewan.ThefiguresshowthatthereisaslightdecreaseintheinternationalperspectiveforSaskatchewanentrepreneursrelativetoAlberta,Manitoba,andCanadaoverall.Exportorientationrepresentstheexpectedshareofrevenue(intensity)comingfromoutsideCanada.Figure3.5provideTEAexportintensity,whileFigure3.6detailsestablishedbusinessexportintensity.
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Figure 3.5: TEA Export Intensity by Region
Figure 3.6: Established Business Export Intensity by Region
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Innovation
Innovationisamajorgoalofentrepreneurshippolicy,evenifonlyafractionofnewinitiativesofferssubstantialinnovations.Insomerespectallnewinitiativesinvolveanentrepreneurundertakingsomethingnew.Initiativesthatprovideproductsorservicesthatarenovelorunfamiliarinamarketandthoseinitiativesthathavenocompetitorsareclearlyinnovativewithintherelevantmarket.ThisviewofinnovationisconsistentwithtwodimensionsofGEMdataabouttheTEApopulation:theshareofcustomerswhoareexpectedtofindthenewproductorservicenovelorunfamiliar(innovativeinthatmarket),andthenumberofotherfirmswhooffersimilar(competitive)productsorservices.FindingsaresuppliedinFigure3.7TEAand3.8EBregardingnovelty.BothfiguresshowthatSaskatchewanentrepreneursareslightlylesslikelytobeworkingwithanewproductorservicerelativetoregionalandnationalcomparisons,althoughthedifferencesarenotverylarge.
Figure 3.7: TEA New Product or Service by Region
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Figure 3.8: Established Business New Product or Service by RegionOwner Manager Products and Services
Technology
Somedefinitionsofinnovationpointtoarelationshipbetweeninnovativenessanduseofup-to-datetechnology.InGEM,themembersoftheTEApopulationareaskedwhethertheirinitiativedrawsonthelatesttechnologyintroducedinthelastyear,technologyintroducedinthepreviousonetofiveyears,oroldertechnology.ResponsestothisindicatorareshowninFigure3.9.
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Figure 3.9: TEA Technology Vintage by Region
Figure 3.10: TEA - Established Business Technology Vintage by Region
ThefiguresshowthatnewtechnologyusebySaskatchewanentrepreneursispracticallynon-existent,althoughthatobservationisconsistentforAlberta,Manitoba,andCanadaaswell.BecausethiseffectisconsistentintheoverallCanadianpercentagesit’slesslikelythatthiseffectisbecauseofthelownumberofmanufacturingbusinessesinwesternCanada.
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WHERE THEY ARE HEADED
Summary: Saskatchewan entrepreneurs’ aspirations are not dependent on scale, export, or high tech.
Commonattributesofhigh-growthventures(scalability,internationaloperationorexport,andhigh-tech)arenotcommonaspirationsforSaskatchewanentrepreneurs.
PART THREE SUMMARY: WHERE THEY ARE HEADED
InthissectionwelookedattheimmediatedirectionthatentrepreneurshipistakinginSaskatchewan.Usingdataonbusinessexitsthestructureofthestart-upandtheestablishedbusinesssector,andplansforexpectedsize,exportintent,anduseofnewtechnologywewereabletogainsomeinsightaboutaspirationsforthefuture.Overallthedatasuggeststhatentrepreneursarebuildingasemi-traditional,locally/regionallyoriented,andsocially-awareentrepreneurialsector.Semi-traditionalmeansthatthetypesofbusinessesaresimilarintypetotheexistingbusinessesinSaskatchewanwithanoticeableshiftawayfromresource-basedbusinessestosocialserviceandhospitalitybusiness.Thisshiftcouldbeduetothecapital-intensivenatureofresourcebusiness.Semi-traditionalalsoreferstothedatashowingthatmanyexistingbusinesses are being discontinued because there is no one interested incarryingonwithit,suggestingthatpassingonabusinesslegacytofamilyorfriendsisnotascommonasitmightbe.
Local/regionalreferstotheexportaspirationofentrepreneurs.TheSaskatchewandatashowsalowtendencyforexportsorinternationalbusinessandanaspirationtocreateasmallnumberofjobs,suggestingthatlocalentrepreneurstendtolooklocallyfortheiropportunitiesandemployees.Finally,socially-awarereferstothemotivationforstartinganewbusiness,anobservationmadeearlierbutthatalsoappliestowhereentrepreneurshipinSaskatchewanisheading.
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Recommendation Framework – Saskatchewan Provincial Experts Survey
Sinceitsinception,GEMhasproposedthatentrepreneurshipdynamicscanbelinkedtoconditionsthatenhance(orhinder)newbusinesscreation.IntheGEMmethodologytheseconditionsareknownasEntrepreneurialFrameworkConditions(EFCs).EFCsareoneofthemostimportantcomponentsofanyentrepreneurshipecosystem.
International Comparison - NECI
ItisexpectedthatdifferenteconomiesandregionshavedifferentstructuresandqualityofEFCs.WhenallGEMdataarecollected,thenationalandregionalfilesarecentrallyharmonized.TheharmonizationprocessincludesaninternalqualitycontrolprocessandthecalculationofsitevariablesthatsummarizeeachblockofquestionsdesignedtomeasureacertainaspectoftheEFCs.Usingthismethodology,eachexpertineachcountryisassignedindividualvalues,allowingforinternationalcomparisonstobemade.Thelistofexpertsinaregionarevariedannuallyandthesearedifferentfromtheexpertsused to assess national conditions.
TheNationalEntrepreneurshipContextIndex(NECI),assessestheenvironmentforentrepreneurshiptoallowforquickcomparisonacrosseconomies.Derivedfromthe12frameworkconditions,theNECIweighsratingsfortheseconditionsbytheimportanceexpertsplace on them.
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Figure4.1providestheNECIaveragescoreforSaskatchewanincomparisonwithG7nations.
Figure 4.1: NECI Average Score Comparison for Saskatchewan, Canada, and Selected G7 Countries
Figure4.1showsthatentrepreneurshipinSaskatchewan,Alberta,andnationallyareessentiallythesame.ThisindexprovidesarecoverybaselineusefulforcomparingSaskatchewanwiththerestofCanada.
Saskatchewan Provincial Experts Survey (SK-PES)
The‘health’ofentrepreneurshipinSaskatchewanisassessedusingtheProvincialExpertsSurvey(PES).Whilesomesecondarydataprovideanalogousinformation,thePESremainsthesolesourceofharmonized,internationallycomparabledatathatspecificallyaddressestheenvironmentalfactorsthatenhance(orhinder)newandgrowingfirms’performance.
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ThePESissimilartoothersurveysthatcaptureexpertjudgementstoevaluatespecificnationalconditions.Forexample,theWorldEconomicForum’s“GlobalCompetitivenessIndex”ortheWorldBank’s“DoingBusiness”usesimilarsurveystobuildtheirindices.WithregardstothePES,itsmainmethodologicaldifferenceisthatitfocusesonlyonEFCs,ratherthanongeneraleconomicfactors.ASaskatchewanexpertisanindividualintheprovincewhowaspersonallyinvitedtocompleteaspecialsurveybytheGEMSaskatchewanprojectteam.Candidateswerechosenbasedontheirexperienceasanestablishedentrepreneurorassomeonewhoworkedprimarilyintheentrepreneurservicessectorinrolessuchasbanking,investing,governmentpolicy,orbusinessconsulting.
ThePESquestionnaireisusedtocollecttheviewsofexpertsonawiderangeofitems,eachofwhichwasdesignedtocaptureadifferentdimension(Figure4.2)ofaspecificEFC:
1. Entrepreneurial Finance.Theavailabilityoffinancialresources— equityanddebt—forsmallandmediumenterprises(SMEs) (includinggrantsandsubsidies).
2. Government Policy.Theextenttowhichpublicpoliciessupport entrepreneurship.ThisEFChastwocomponents:(a) Entrepreneurshipasarelevanteconomicissueand(b)Taxesor regulationsareeithersize-neutralorencouragenewandSMEs.
3.Government Entrepreneurship Programs.Thepresenceand qualityofprogramsdirectlyassistingSMEsatalllevelsof government(national,regional,municipal).
4. Entrepreneurship Education.Theextenttowhichtrainingin creatingormanagingSMEsisincorporatedwithintheeducation andtrainingsystematalllevels.ThisEFChastwocomponents: (a)EntrepreneurshipEducationatbasicschool(primaryand secondary)and(b)EntrepreneurshipEducationatpost-secondary levels(highereducationsuchasvocational,college,business schools,etc.).
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5. R&D Transfer.Theextenttowhichnationalresearchand developmentwillleadtonewcommercialopportunitiesandis available to SMEs.
6. Commercial and Legal Infrastructure.Thepresenceofproperty rights,commercial,accountingandotherlegalandassessment services and institutions that support or promote SMEs.
7. Entry Regulation.ThisEFCcontainstwocomponents:(a)Market Dynamics:thelevelofchangeinmarketsfromyeartoyear,and (b)MarketOpenness:theextenttowhichnewfirmsarefreeto enterexistingmarkets.
8. Physical Infrastructure.Easeofaccesstophysicalresources— communication,utilities,transportation,landorspace—ataprice that does not discriminate against SMEs.
9. Cultural and Social Norms.Theextenttowhichsocialand culturalnormsencourageorallowactionsleadingtonewbusiness methodsoractivitiesthatcanpotentiallyincreasepersonalwealth and income.
ThePESwascarefullydesignedandrefinedtocaptureinformedjudgementsofnational,andinthiscaseregional,keyinformantsregardingthestatusofEFCsintheirowncountry/region’seconomies.Nationalandregionalexpertsareselectedonthebasisofreputationandexperience(throughaconveniencesampleapproach).Eachyearatleast36expertsineachGEMeconomyarepersonallyinterviewedorsurveyedandaskedtofilloutthePESself-administeredquestionnaire.
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Figure 4.2: Entrepreneurial Framework Conditions – Average Importance vs. Average Score from Saskatchewan Business Experts
Experts’ Opinion on…* Where Where it GAP it is should be
Financial environment related with entrepreneurship 4.71 8.33 3.62
Entrepreneurial level of education (primary, secondary) 4.46 7.73 3.27
Government policies, priority and support 4.51 7.64 3.13
R&D transfer 4.09 7.15 3.06
Government policies bureaucracy, taxes 4.77 7.39 2.62
Entrepreneurial education (post-secondary) 5.16 7.69 2.53
Regional economic dynamics 4.9 7.42 2.52
Government programs 4.69 7.09 2.4
Regional economic burdens 5.32 7.06 1.74
Access to professional and commercial services 5.95 7.48 1.53
Cultural, social norms and society support 6.4 7.09 0.69
Physical infrastructure and services access 6.65 6.91 0.26
* All questions were on a 1-10 scale
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SASKATCHEWAN PROVINCIAL EXPERTS SURVEY
Theexpertssurveyaskedquestionsaboutdifferentissuesandrespondentsthenprovidedopinionsabouttheimportanceofanissuesuchastheavailabilityoffinancingforentrepreneurs,andhowadequatelythatissuewasbeingaddressed.Agapscorewascreatedandusedtosorttheissuesfrommostinneedofattentiontoleastinneed.ThetableinFigure4.2showsthatexpertscollectivelythoughtthatthefinancialenvironmentforentrepreneursisveryimportant(8.33/10)andthatcurrentlythefinancialenvironmentwasrateda4.71outof10intermsofmeetingtheneedsofentrepreneursinSaskatchewan.Thegapbetweenthesescores,representingthegapbetweenwhatshouldbeandwhatis,isthelargestinthelist,puttingthisissueatthetopofthelist.
Issuesweregroupedaccordingtothegapscorestocreatecategoriesofmost important to least important.
Category One: Most Important Issues for Entrepreneurs in Saskatchewan
ThemostimportantissuestoaddressforentrepreneursinSaskatchewanarerelatedtofinancing,policy,education,andR&D(technology)transfer.
Entrepreneurial Finance. • Theavailabilityoffinancialresources—equityanddebt—forsmall andmediumenterprises(SMEs)(includinggrantsandsubsidies).
Government Policy. • Theextenttowhichpublicpoliciessupportentrepreneurshipand promote Entrepreneurship as a relevant economic issue
Entrepreneurship Education • TheextenttowhichtrainingincreatingormanagingSMEsis incorporatedwithintheeducationsysteminbasicschool(primary andsecondary)
R&D Transfer. • Theextenttowhichnationalresearchanddevelopmentwilllead tonewcommercialopportunitiesandthenmadeavailableto SMEs.
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Category Two: Important Issues for Entrepreneurs in Saskatchewan
Government Policy.
• Theextenttowhichpublicpoliciessupportentrepreneurship, specificallyrelatingtotaxesorregulationsthatareeithersize- neutralorencouragenewandSMEs.
Entrepreneurship Education. • TheextenttowhichtrainingincreatingormanagingSMEs isincorporatedwithintheeducationandtrainingsystematpost- secondarylevels(highereducationsuchasvocational,college, businessschools,etc.).
Entry Regulation. • Theextenttowhichentrepreneurialmarketdynamics(thelevelof changeinmarketsfromyeartoyear)canbeincreased.
Government Entrepreneurship Programs. • ThepresenceandqualityofprogramsdirectlyassistingSMEsat alllevelsofgovernment(national,regional,municipal).
Category Three: Secondary Issues for Entrepreneurs in Saskatchewan
Entry Regulation. • MarketOpenness:theextenttowhichnewfirmsarefreetoenter existingmarkets.
Commercial and Legal Infrastructure. • Thepresenceofpropertyrights,commercial,accountingandother legal and assessment services and institutions that support or promote SMEs.
Thelastcategory,“Cultural,socialnormsandsocietysupport”and“Physicalinfrastructureandservicesaccess”havesmallgapscoresindicatingthatexpertsconsiderthesetwoissuesasnotbeingaburdenorproblemforSaskatchewanentrepreneurs.
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Closing the Gap for Saskatchewan Entrepreneurs.Thisreportismeanttoprovideinformationformakinginformedplansforhowtopromoteentrepreneurshipintheprovince.Thisreportwaswrittenwiththeperspectivethatdifferentreaderswouldhavedifferentinterests,resources,anddesiredoutcomes.Tofacilitatethisvarietywerecommend that the report serve as a planning document and propose thatfurtherrecommendationsbedevelopedthatarespecifictothegroup involved.
Ifyouareinterestedinfurtherdiscussionoftheinformationinthisreportthenpleasecontactthereportauthorsdirectlytoinquireaboutinformationsessionsandplanningmeetingstargetedtoyourspecificarea.
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GEM CANADA TEAM2019
Peter Josty TheCentreforInnovationStudiesTeam Leader (THECIS),Calgary
Adam Holbrook CentreforPolicyResearchonDeputy Team Leader ScienceandTechnology(CPROST), SimonFraserUniversity,Vancouver
Geoff Gregson TheCentreforInnovationStudies (THECIS),Calgary
Blair Winsor MemorialUniversity, StJohn’s,Newfoundland
Jacqueline S. Walsh MemorialUniversity, Cornerbrook,Newfoundland
Harvey Johnstone CapeBretonUniversity, Sydney,NovaScotia
Kevin McKague CapeBretonUniversity, Sydney,NovaScotia
Yves Bourgeois UniversityofNewBrunswick, Moncton,NewBrunswick
Matthew Pauley UniversityofPrinceEdwardIsland, Charlottetown,PEI
Étienne St-Jean UQTR,TroisRivières,Québec
Marc Duhamel UQTR,TroisRivières,Québec
Sandra Schillo UniversityofOttawa
Charles Davis RyersonUniversity,Toronto
Dave Valliere RyersonUniversity,Toronto
Howard Lin RyersonUniversity,Toronto
Nathan Greidanus AsperSchoolofBusiness UniversityofManitoba,Winnipeg
Chris Street UniversityofRegina
Chad Saunders UniversityofCalgary
Richard Hawkins UniversityofCalgary
Amanda Williams MountRoyalUniversity,Calgary
Karen Hughes UniversityofAlberta,EdmontonMurat Erogul ThompsonRiversUniversity,BC
Brian Wixted CentreforPolicyResearchon ScienceandTechnology(CPROST) SimonFraserUniversity,Vancouver
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FundingforthisreportwasprovidedbytheHillandLeveneSchoolsofBusinessattheUniversityofRegina.
SPONSOR RECOGNITION
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Chris Street, PhD
ChrisStreetisanAssociateProfessorinEntrepreneurshipatthePaulJHillSchoolofBusinessattheUniversityofRegina.ChrisreceivedaBScinComputerSciencefromBrandonUniversityandaPhDinManagementfromQueen’sSchoolofBusiness.Chrishastaughtnationallyandinternationallyincomputerscience,entrepreneurship,andnegotiation.Hisworkispublishedinleadingjournals,includingMISQuarterly,StrategicInformationSystems,andJournalofSmallBusinessManagement.ChrisiscurrentlyworkingonaPhDinComputerScienceonthetopicofdatavisualization.
Chad Saunders,MBA,PhD,ICD.D
ChadSaundersisanAssistantProfessorinEntrepreneurship&InnovationattheHaskayneSchoolofBusiness,UniversityofCalgary.ChadholdsadjunctappointmentswiththeDepartmentofCommunityHealthSciencesandtheDepartmentofMedicineattheCummingSchoolofMedicine,whereheistheeHealthServicesandStrategyLeadwiththehealthcareinnovationincubatorw21c.org.ChadreceivedbothaBSc(AppliedMathematics)andMBAfromMemorialUniversityofNewfoundlandandaPhD(ManagementInformationSystems)fromtheHaskayneSchoolofBusiness.ChadalsoholdstheICD.DdesignationfromtheInstituteofCorporateDirectors.Chadhasdevelopedandtaughtvariouscoursesinentrepreneurship,innovationmanagement,informationsystems,andprojectmanagementatMemorialUniversityofNewfoundland,AthabascaUniversity,theUniversityofSanFranciscoandtheUniversityofCalgary.Hisresearchinterestsincludethesupportthatentrepreneursdrawuponinstartingandscalingtheirventures,theethicaldecision-makingprocessesthatentrepreneursengagein,andtheroleofdisruptivetechnologyinenablingandconstrainingventureswithinahealthcarecontext.Hisworkispublishedinleadingjournals,includingEntrepreneurshipTheory&Practice,JournalofBusinessVenturing,IEEETransactionsonSoftwareEngineering,andResearchPolicy.
REPORT AUTHORS
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TheGlobalEntrepreneurshipMonitor(GEM)Projectiswidelyrecognizedasthemostcomprehensivelongitudinalstudyofentrepreneurshipintheworld.Launchedin1999asajointprojectbetweenLondonBusinessSchool(UK)andBabsonCollege(USA),theinitialaimwastoconsiderwhysomecountriesaremore‘entrepreneurial’thanothers.Themandateexpandedtoincludearangeofannualglobal,regional,nationaland‘specialtopic’reportsontopicslikeyouth,women,andseniorentrepreneurship.
TheprimarypurposeofGEMistounderstandentrepreneurshipinnationalandglobalcontext,focusingontwokeydimensions:(i)theattitudes,activity,andaspirationsofindividualentrepreneurs;and(ii)thenationalcontextandhowitimpactsentrepreneurialactivity.Indoingsoitaimstoidentifypoliciesthatmayfosterthequalityandquantityoftheentrepreneurialactivity.
CanadawasanearlyparticipantinGEM,takingpartseveraltimesinthesurveyintheearlyyears,whileexperiencingahiatusbetween2005-2012.However,since2013theGEMCanadateamhaveactivelyparticipatedinthestudyandintheglobalorganization,producingnational,regional,andprovincialreportsannually,whileprovidingongoingcontributionstotheinternationalorganizingbody.
GEM Conceptual Framework and Methodology
TheGlobalEntrepreneurshipMonitor(GEM)definesentrepreneurshipbroadlyas:
“Any attempt at new business or new venture creation, such as self-employment, a new business organization, or the expansion of an existing business, by an individual, a team of individuals, or an established business.”
AttheheartoftheGEMConceptualFrameworkisafocusonindividualentrepreneurs,andtheirpersonalaspirationsandcapabilities,aswellasthenatureoftheentrepreneurialecosystem.
APPENDIX 1 GLOBAL ENTREPRENEURSHIP MONITOR DESCRIPTION
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TheGEMConceptualFrameworkguidesdatacollectionactivitiesandresearch,bothofwhichcontributetoGEM’skeyaims:
• Touncoverfactorswhichencourageorhinderentrepreneurial activity,especiallyrelatedtosocietalvalues,individualattributes, andentrepreneurialframeworkconditions.
• Toprovideaplatformforassessingtheextenttowhich entrepreneurialactivityinfluencessocio-economicdevelopment (includingeconomicandinclusivegrowth)withinindividual economies.
• Touncoverpolicyimplicationsforthepurposeofenhancing entrepreneurialcapacityandresultingoutcomesinaneconomy.
TheGEMConceptualFrameworkisshowinFigure1.1.
Figure 1.1: The GEM Conceptual Framework
APPENDIX 1 GLOBAL ENTREPRENEURSHIP
MONITOR DESCRIPTION
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Startingontheleft-handsideoftheframework,thesocial,cultural,political and economic context is represented through National FrameworkConditions,whichincludeentrepreneurialfinance,governmentpolicy,governmententrepreneurshipprograms,entrepreneurshipeducation,R&Dtransfer,commercialandlegalinfrastructure,physicalinfrastructure,internalmarketdynamicsandentryregulation,andculturalandsocialnorms.TheseareassessedthroughasurveyofselectedexpertsoneachoftheframeworkconditionsaspartoftheProvincialExpertSurvey(PES).
Societalvaluesincludesocietalbeliefsaboutentrepreneurshipasagoodcareerchoice,whetherentrepreneurshavehighsocietalstatus,theextenttowhichmediarepresentsentrepreneurshippositivelyinaneconomy,andwhetheritiseasytostartabusiness.
Individualattributesincludedemographiccharacteristics(i.e.,gender,age,etc.),self-perceptions(i.e.,perceivedcapabilities,perceivedopportunities,fearoffailure),andmotivesforstartingabusiness(i.e.,necessityversusopportunity).
Entrepreneurialactivityencompassesmultiplephasesofthebusinessprocess(i.e.,nascent,newbusiness,establishedbusiness,discontinuation),potentialimpact(i.e.,jobcreation,innovation,internationalization),andtypeofactivity(suchastotalearly-stageentrepreneurialactivityorTEA,andemployeeentrepreneurialactivityorEEA).
Societalvalues,individualattributes,andentrepreneurialactivityareassessedthroughabroad-basedsurveyofthepopulationcalledtheAdultPopulationSurvey(APS).
Overall,theGEMapproachalsoviewsentrepreneurshipasaprocesswithdistinctphases.AsdepictedinFigure1.2,thisprocessmovesfromtheintentiontostartabusiness,tonascententrepreneurshipinvolvinganewstart-up,toowner-managersofarelativelynewbusiness,toowner-managerofamoreestablishedventure.Followingthisprocessapproach,businessexits(discontinuance)arealsotracked.
APPENDIX 1 GLOBAL ENTREPRENEURSHIP MONITOR DESCRIPTION
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Figure 1.2: The GEM Entrepreneurial Indicators
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APPENDIX 1 GLOBAL ENTREPRENEURSHIP MONITOR DESCRIPTION
AcentralmeasureoftheGEMapproachisTotalEarly-StageActivity(TEA).Thisincludesthoseintheprocessofstartingabusiness(nascententrepreneurs),andthoserunningayoungbusiness(3–42monthsold)butexcludesthoseintheestablishedbusinessphase(firmsolderthan42monthsor3.5years).Byexploringthesevariousphases—andespeciallythedifferencebetweentotalearly-stage(TEA)andestablishedbusinesses(EB)—theGEMapproachoffersinsightsnottypicallyavailablefromstandardbusinessstatisticsorofficialgovernment measures.
Withrespecttodatacollection,GEMusestwomainsources:
The Adult Population Survey (APS)–DatafortheAPSisgatheredthroughatelephonesurveyofrandomlyselectedadults,aged18-99years,conductedbyanindependentpollingfirm.UsingthestandardGEMquestionnaireprotocol,theAPScoversavarietyofquestionsonentrepreneurialattitudes,activities,andaspirations.TheAPSdataprovidesaprofileofrepresentativedata,weightedforageandgenderto standard Canadian or regional demographics.
The National or Provincial Expert Survey (NES/PES) - The NES/ PESisaquestionnairecompletedbyagroupofexpertsinacountry,orprovince(inthiscaseSaskatchewan),usingtheinstrumentdevelopedfortheglobalGEMproject.Thesurveypresentsaseriesofstatementsconcerningsupportforentrepreneurship,andexpertsareaskedtoassessthedegreetowhicheachistrue.Areasprobedarebasedupontheframeworkconditions:entrepreneurialfinance,governmentpolicy,governmententrepreneurshipprograms,entrepreneurshipeducation,R&Dtransfer,commercialandlegalinfrastructure,physicalinfrastructure,internalmarketdynamicsandentryregulation,andcultural and social norms.
GEM Saskatchewan Report 2019
THECIS(TheCentreforInnovationStudies)isanotforprofitorganizationdevotedtostudyandpromotionofinnovation.BasedinCalgary,Alberta,andIncorporatedin2001,itoperatesthroughanetworkof35-40THECISFellows.
THECIS has three core functions–research,networkingandeducation. • Research.Creatingnewknowledgeandbuildinginsightsinto howtheinnovationsystemsfunctionsandpoliciesthatcan improve it. • Networking.Providingopportunitiesforexchangeofideas throughbreakfastmeetings,workshopsandconferences. • Education.DisseminationofinformationthroughNewsletters, eventsandotherinformaleducationactivities,particularlyfor graduate students.
FormoreinformationaboutTHECISgotowww.thecis.ca
The Centre for Innovation Studies (THECIS)#125,AlastairRossTechnologyCentre355331StreetNWCalgary,Alberta,CanadaT2L2K7
More information
FormoreinformationontheGEMglobalreportsandonGEM,pleasecontacttheGEMExecutiveDirector,Aileen Ionescu-Somers,atasomers@gemconsortium.org
TheReportonEntrepreneurshipandEconomicDevelopmentinSaskatchewan2019isavailableatwww.gemconsortium.org
AlthoughGEMdatawereusedinthepreparationofthisreport,theirinterpretationandusearethesoleresponsibilityoftheauthorsandtheGEM Canada team.
ABOUT THECIS
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NOTES
Global Entrepreneurship Research AssociationLondonBusinessSchoolRegentsPark,LondonNW14SA,UK.
+447966908171info@gemconsortium.org
www.gemconsortium.org
The Centre for Innovation Studies (THECIS)#125,AlastairRossTechnologyCentre355331StreetNWCalgary,Alberta,CanadaT2L2K7
www.thecis.ca
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