On Feb. 11, the Government of Canada presented the annual budget. Economic Action Plan 2014 is focused on lowering Canada’s unemployment rate, decreasing the deficit and continuing to fund infrastructure.
Included in this budget are key indicators of the government’s dedication to entrepreneurship. The government has indicated with this budget that it recognizes the significant role entrepreneurs play in the economy through their startups and sees entrepreneurship as a tool to create jobs and ensure that Canada remains competitive in the global economy.
Investing in accelerators and incubators
With the 2014 budget, the government has promised a $40 million increase in funding for the Canada Accelerator and Incubators Program (CAIP). This additional funding will raise the total amount of money allocated to CAIP to $100 million by 2016.
Business accelerators and incubators play an integral role in the supportive ecosystem for entrepreneurs by connecting startups to financing, mentorship, and other mechanisms of support. CAIP provides accelerators and incubators with the resources to better serve entrepreneurs.
The missing piece
The enduring missing piece, however, remains the lack of connectivity and cohesion amongst the ecosystem, which includes, but is not limited to, the incubators and accelerators which are the primary benefactors of the CAIP. The connectivity and network between these nodes in the entrepreneurship infrastructure will directly influence whether these investments make an lasting and meaningful impact.
With more than 100 established incubators and accelerators and new and exciting manifestations of co-working spaces, entrepreneur-led launch academies, maker-spaces and hubs of all sorts popping up across Canada, the CAIP will need to select those that are most established with the highest impact potential in areas with large populations. Where does that leave smaller communities, entrepreneurs in remote regions and entrepreneurs who might benefit from the expertise and services of incubators and accelerators, but who do not wish to relocate their teams and operations to these spaces?
The fact of the matter is that we need entrepreneurs everywhere, especially in small and struggling communities that have in recent years witnessed the exodus of their young people and the closure of major industry and manufacturing centers.
Connecting the nodes in the ecosystem
With a sprawling geography and startup communities and spaces springing up in the most unsuspecting of places, a national network that connects and builds bridges between the major CAIP-funded accelerator and incubator centers and other nodes in the ecosystem will significantly strengthen and streamline Canada’s entrepreneurship infrastructure.
Networks like Startup Canada, which already operate nationally at the grassroots level from coast to coast, can be leveraged as the central connecting, collaboration and communications agent bringing together the disparate components of this ecosystem. Connecting the nodes in the network together and to startup founders will ensure that at the end of the day, the support of entrepreneurs is streamlined, the success of entrepreneurs is advanced by these investments, and that the impact of these investments is multiplied with a demonstrable impact on the Canadian economy.
Youth unemployment fueling a new cohort of entrepreneurs
With the Canadian unemployment rate at seven percent, the economy still shaky, and youth unemployment at an alarming 14 per cent, creating sustainable jobs has been the government’s focus for the past few years.
According to a 2013 study done by TD Economics about youth unemployment, “…the earnings loss due to the rise in youth unemployment is equivalent to C$10.7 billion….” That is the equivalent of roughly 200,000 people receiving a $50k a year job.
Young people are being driven to entrepreneurship out of necessity. We need to ensure that as they take their first entrepreneurial steps there is a community for them to plug into for support, learning, networking, funding, mentorship and space.
At Startup Canada Day on the Hill, a meeting of more than 700 government leaders and entrepreneurs held in Ottawa in November 2013, Startup Canada emphasized a report published Intuit that indicates that Millennials are twice as likely to start a business in the next year. Forty percent of aspiring Millennial entrepreneurs want access to more government grants and tax benefits, and 30 per cent believe financial literacy and management should be a core part of the education curriculum. Are we ready for these Millennial entrepreneurs?
Across the ocean in one of the economies hardest hit by the 2008 financial collapse, the then newly elected Cameron government in the United Kingdom was faced with unprecedented youth unemployment. The government’s response: investing in Startup Britain, startup campuses, student-led activities, startup loans and important investments in Tech City to empower a new generation of British youth to pursue entrepreneurial careers. I had the privilege to be at the center of this this transition and have seen the enormous impact of these bold investments over the last 6 years.
Building an entrepreneur country
Here in Canada, if we can elevate our level of entrepreneurial culture and acumen to match our standing as one of the most educated economies in the world – Canada could be the one to watch. That is if we grasp the opportunity and if we make further and greater investments in both the individual nodes and the overall network of Canada’s entrepreneurship ecosystem.
Government cannot do it alone. According to Startup Canada’s Chairman and serial entrepreneur Adam Chowaniec, Canadian entrepreneurs themselves have a major part to play in stepping up as community builders, mentors, investors and in continuing to build and grow great Canadian companies.
“We need the fuel the flames of Canadian entrepreneurship,” says Dr. Chowaniec. “Better connections between entrepreneurs, improved access to capital, and an atmosphere where cutting-edge companies can thrive at home above and beyond their initial growth. These are the ingredients for the future economic success of Canada.”
The 2014 budget demonstrates that entrepreneurship is on the government’s agenda. Entrepreneurs like myself hope that Canada will continue to invest in and champion entrepreneurs who are taking risks to create wealth and jobs for the economy.
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