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Working Paper 15 PRESENTATION BY
James Milway TO
FEI Canada Toronto Chapter/ Ontario FEIsters March 22, 2012
Small Business, Entrepreneurship, and Innovation
1 March 2012 1
Ontario Has 12 International Peers
2 March 2012 2
Ontario Ranks Among the Leading International Peers
3 March 2012 3
Ontario Has 15 North American Peers
» California » Florida » Georgia » Illinois » Indiana » Massachusetts » Michigan » New Jersey » New York » North Carolina » Ohio » Pennsylvania » Québec » Texas » Virginia
4 March 2012 4
Ontario Trails Its North American Peers
5 March 2012 5
Ontario’s Prosperity Gap Widened Slightly in 2010
6 March 2012 6
GDP Performance Against Other Provinces Is Lackluster
7 March 2012 7
The Task Force Has Set Out a 2020 Prosperity Agenda
8 March 2012
Small Business, Entrepreneurship, and Innovation
> Small- and medium-sized enterprises and entrepreneurial firms: what are they and why do they matter
> Is special public policy required to support smaller and entrepreneurial firms?
> How can public policy support smaller firms and entrepreneurs?
> What makes entrepreneurs successful?
> What should we do?
9 March 2012
Smaller Firms Differ From Entrepreneurial Firms
10 March 2012
Most Firms Are Smaller Businesses
11 March 2012
Business Owners Report Highest Level Of Well Being
12 March 2012
> Small- and medium-sized enterprises and entrepreneurial firms: what are they and why do they matter
> Is special public policy required to support smaller and entrepreneurial firms?
> How can public policy support smaller firms and entrepreneurs?
> What makes entrepreneurs successful?
> What should we do?
Small Business, Entrepreneurship, and Innovation Small Business, Entrepreneurship, and Innovation
13 March 2012
• Firms have excessive market power
• Public goods are not paid by private actions
Firms and individuals take action without consideration of others – externalities
Participants lack complete information – information
asymmetries
There Are Four Types Of Market Failure
14 March 2012
Smaller Facilities Achieve Lower Productivity
15 March 2012
Larger Firms Pay a Higher Education Premium
16 March 2012
Larger Firms Pay a Higher Education Premium
17 March 2012
Larger Firms Contribute More To GDP
18 March 2012
Larger Firms Contribute More To GDP
19 March 2012
Larger Firms Account For Most R&D Spending
20 March 2012
Larger Firms Account For Most R&D Spending
21 March 2012
Larger Firms Account For Most R&D Spending
22 March 2012
Very Few Small Firms Conduct R&D
23 March 2012
Start-ups Typically Follow Existing Industry Patterns
24 March 2012
Most Start-ups Do Not Survive For More Than A Few Years
25 March 2012
Jobs In Most Start-ups Do Not Last
26 March 2012
Survivors Generate Employment Growth
27 March 2012
10 Year Net Jobs Effect From Start-ups Is Limited
28 March 2012
US Start-up Results Are Similar
29 March 2012
More Medium-Sized Firms Have Growth Intentions
30 March 2012
Larger Manufacturing Facilities Are Better Managed
31 March 2012
Larger Manufacturing Facilities Are Better Managed
32 March 2012
Large Firms Generate Most Export Value
33 March 2012
> Small- and medium-sized enterprises and entrepreneurial firms: what are they and why do they matter
> Is special public policy required to support smaller and entrepreneurial firms?
> How can public policy support smaller firms and entrepreneurs?
> What makes entrepreneurs successful?
> What should we do?
Small Business, Entrepreneurship, and Innovation
34 March 2012
Canada’s Regulatory Environment Is More Favourable
35 March 2012
Canada Ranks High On Entrepreneurial Activity
36 March 2012
Small Business Tax Preference Has Fallen In Canada
37 March 2012
Small Business Tax Preference Has Fallen In Ontario
38 March 2012
Marginal Effective Tax Rates Jump As Firms’ Growth Spurts
39 March 2012
> Small- and medium-sized enterprises and entrepreneurial firms: what are they and why do they matter
> Is special public policy required to support smaller and entrepreneurial firms?
> How can public policy support smaller firms and entrepreneurs?
> What makes entrepreneurs successful?
> What should we do?
Small Business, Entrepreneurship, and Innovation
40 March 2012
Most Leading Firms Have Been in Business for 25+ Years
41 March 2012
Most ICP Global Leaders Started Exporting Within 5 Years
42 March 2012
Most Leading Firm Founders Were Over 30 At Start-up
43 March 2012
Most Leading Firm Founders Had Industry Experience
44 March 2012
Leading Firm Founders Tended Not To Have Entrepreneurial Experience
45 March 2012
Most Founders Were Born In Canada
46 March 2012
Founders Of Leading Firms Were Highly Educated
47 March 2012
Founders Of Leading Firms Were Highly Educated
48 March 2012
Most Founders Had A Science or Engineering Education
49 March 2012
> Small- and medium-sized enterprises and entrepreneurial firms: what are they and why do they matter
> Is special public policy required to support smaller and entrepreneurial firms?
> How can public policy support smaller firms and entrepreneurs?
> What makes entrepreneurs successful?
> What should we do?
Small Business, Entrepreneurship, and Innovation
50 March 2012
> Continue to pursue sound economic policy that promotes innovation and productivity growth in all sectors • Invest in post-secondary education
• Encourage cluster development
Actions For Small Business, Entrepreneurship, and Innovation
51 March 2012
> Further develop approaches that are customized to high growth entrepreneurial businesses
• Focusing on the few
• Experimenting more
Actions For Small Business, Entrepreneurship, and Innovation
52 March 2012
> Expand government procurement to create opportunities for smaller – and all – businesses
• Enhance entrepreneurs’ credibility through reference
customer
• Identify innovative firms through competitive tendering
Actions For Small Business, Entrepreneurship, and Innovation
53 March 2012
> Make the tax system as pro-growth as possible • Treat large businesses the same as smaller
businesses in tax policy
• Explore opportunities to reduce or eliminate taxes on growth
• Expense more, if not all, capital investment
• Reduce capital gains on shares issued at IPO
• Lower impact of capital gains taxes as a barrier to exit
Actions For Small Business, Entrepreneurship, and Innovation
54 March 2012
> Continue to pursue sound economic policy that promotes innovation and productivity growth in all sectors
> Further develop approaches that are customized to high growth entrepreneurial businesses
> Expand government procurement to create opportunities for smaller – and all – businesses
> Make the tax system as pro-growth as possible
Actions For Small Business, Entrepreneurship, and Innovation
Working Paper 15 PRESENTATION BY
James Milway TO
FEI Canada Toronto Chapter March 22, 2012
Small Business, Entrepreneurship, and Innovation
