Driving wealth creation & social development in Saskatchewan

20192019Saskatchewan

Driving wealth creation &

social development in

2019 GEM SASKATCHEWAN

REPORT

GEM Saskatchewan Report 2019

Chris StreetChad Saunders


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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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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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.

SASKATCHEWAN PROVINCIAL EXPERTS

SURVEY


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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.

SASKATCHEWAN PROVINCIAL EXPERTS SURVEY


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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.).


SURVEY


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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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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.


SURVEY


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.



Figure 1.2: The GEM Entrepreneurial Indicators

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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.


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,[email protected]

TheReportonEntrepreneurshipandEconomicDevelopmentinSaskatchewan2019isavailableatwww.gemconsortium.org

AlthoughGEMdatawereusedinthepreparationofthisreport,theirinterpretationandusearethesoleresponsibilityoftheauthorsandtheGEM Canada team.

ABOUT THECIS

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NOTES

Global Entrepreneurship Research AssociationLondonBusinessSchoolRegentsPark,LondonNW14SA,UK.

[email protected]

www.gemconsortium.org

The Centre for Innovation Studies (THECIS)#125,AlastairRossTechnologyCentre355331StreetNWCalgary,Alberta,CanadaT2L2K7

www.thecis.ca

Documents

Driving wealth creation & social development in Saskatchewan