SMEs show their worth – Again

By Paul Blais

Barber in front of his business

The strong propensity for Canadians to start new SMEs was highlighted in a recent report by the Global Entrepreneurship Monitor, which identified Canada’s rate of entrepreneurship as very high among innovation driven economies, just behind the US and on a par with Australia.

These businesses are a crucial driver of the Canadian economy. In fact, CIBC World Markets recently reported that businesses under 500 employees are keeping the Canadian economy afloat. The number of larger corporations has declined since 2007 and the share of employees working in businesses under 500 people has rebounded to about 55% of the workforce. The report says that these businesses have been boosted by continued growth in consumer spending. However, high dependency on the Canadian consumer could create a negative shockwave asCanadians are just about maxed out on debt-fueled consumption. The authors encourage business owners to look past the country’s borders in order to ensure ongoing growth.

At the local level, a recent list of top cities in Canada to do business from the Canadian Federation of Independent Business provides some useful insight into what makes a successful entrepreneurial city in Canada. It’s worth a look to get an understanding of how important business concentration, local optimism, and local tax and regulatory policies are to driving entrepreneurial growth.

This post first appeared in TINAN 66. Subscribe to TINAN for the latest economic development news and resources.