2015 gem sigal haber 1 2 3 1 research associate, media ... · gem ntario report gem canada report...

2015Ontario

Driving wealth creation &

social development in

GEM Ontario Report 2015GEM Canada Report 2014

Sigal Haber 1

Matthew Lo 2

Charles H. Davis 3

1 Research Associate, Media Innovation Research Lab, Ryerson University

2 BrookfieldInstituteforInnovation+Entrepreneurship,RyersonUniversity

3 MediaInnovationResearchLab,FacultyofCommunication&Design, Ryerson University

2015 GEM ONTARIO REPORT

GEM Ontario Report 2015

EXECUTIVE SUMMARY .......................................................................... 1INTRODUCTION ....................................................................................... 10METHODOLOGY ....................................................................................... 15

FINDINGS - ADULT POPULATION SURVEY ................................ 17 ATTITUDES..............................................................................................17 ACTIVITY ................................................................................................. 18 MOTIVES.................................................................................................21 ENTREPRENEURSINONTARIO’SECONOMYBYSECTOR..............23 INNOVATION..........................................................................................27 ASPIRATIONS.........................................................................................30 INTRAPRENEURSHIP...........................................................................33 ENTREPRENEURSHIPDEMOGRAPHICINONTARIO......................34 EXIT.........................................................................................................44

ENTREPRENEURIAL FRAMEWORK CONDITIONS (Provincial Experts Survey - PES).....................................................46 AVAILABILITYOFFINANCE................................................................46 GOVERNMENTPOLICIES.....................................................................47 GOVERNMENTPROGRAMS.................................................................48 ENTREPRENEURSHIPEDUCATION...................................................49 RESEARCH&DEVELOPMENTTRANSFER........................................50 COMMERCIALANDSERVICEINFRASTRACTURE............................50 MARKETOPENNESS.............................................................................51 PHYSICALINFRASTRUCTURE.............................................................52 CULTURALANDSOCIALNORMS........................................................52 PERSPECTIVESONTHEBUSINESSSECTOR’S ROLEINSOCIETY..................................................................................53

CONCLUSIONS..........................................................................................54RECOMMENDATIONS ........................................................................... 57

ABOUT THECIS.........................................................................................60ABOUT RYERSON UNIVERSITY.......................................................61ABOUT THE BROOKFIELD INSTITUTE FOR INNOVATION + ENTREPRENEURSHIP.......................................62MORE INFORMATION..........................................................................63

SPONSOR RECOGNITION....................................................................64

REPORT AUTHORS.................................................................................65 SigalHaber,Ph.D....................................................................................65 MatthewLo,MA......................................................................................65 CharlesH.Davis,Ph.D.............................................................................66

REFERENCES.............................................................................................67GLOSSARY...................................................................................................68

CONTENTS

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Figure1: TheGEMConceptualFramework..................................................10

Figure2: GEMProcessModel........................................................................14

Figure3: Personalattitudestowardsentrepreneurshipin Ontarioandreferenceeconomies....................................................17

Figure4: EntrepreneurialactivityinOntarioandreferenceeconomies.......19

Figure5: Entrepreneurialactivityandentrepreneurialintentin Ontarioandreferenceeconomies...................................................20

Figure6: Opportunityvs.necessitymotiveinOntarioand referenceeconomies........................................................................21

Figure7: OpportunitymotiveinOntarioandreferenceeconomies (%ofTEAentrepreneurs)...............................................................22

Figure8: EntrepreneurialactivitybysectorinOntarioand referenceeconomies(%ofTEAentrepreneurs).............................24

Figure9: Entrepreneurialactivitybysectortypein Ontario and Canada ........................................................................ 25

Figure10:Ontario’sentrepreneursbysector- Divisionby1DISICCodeSector(2013-2015)................................27

Figure11: UseofadvancedtechnologyinOntarioand referenceeconomies........................................................................28

Figure12:IntroducingnewproductstothemarketinOntarioand referenceeconomies........................................................................29

Figure13:Innovationamongestablishedbusinesses(EB)in Ontario and Canada ........................................................................ 30

Figure14:JobcreationaspirationsinOntarioand referenceeconomies........................................................................31

Figure15:ExportaspirationsinOntarioandreferenceeconomies...............32

Figure16:Aspirationsamongestablishedbusinesses(EBs)in Ontario and Canada ......................................................................... 33

Figure17:RatesofintrapreneurshipinOntarioand referenceeconomies........................................................................34

Figure18:ParticipationinentrepreneurialactivitybyageinOntarioand referenceeconomies........................................................................35

Figure19:Participationinentrepreneurialactivitybyage amongestablishedbusinesses(EBs)inOntarioand referenceeconomies.......................................................................35

Figure20:Entrepreneurialactivitybyeducationlevelin Ontarioandreferenceeconomies...................................................36

Figure21:Entrepreneurialactivityamongestablishedbusinesses(EBs)by educationlevelinOntarioandreferenceeconomies......................37

TABLE OF FIGURES

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Figure22:EntrepreneurialactivitybygenderinOntarioandCanada...........38

Figure23:Generalpublicattitudestowardsentrepreneurshipby genderinOntarioandCanada........................................................39

Figure24:Opportunitymotiveofmalesandfemalesin Ontarioandreferenceeconomies...................................................39

Figure25:Necessitymotiveofmalesandfemalesin Ontarioandreferenceeconomies...................................................40

Figure26:Ontario’smaleentrepreneursbysector–Divisionby 1DISICCodeSector(2013-2015)...................................................41

Figure27:Ontario’sfemaleentrepreneursbysector-Divisionby 1DISICCodeSector(2013-2015)...................................................42

Figure28:Socioeconomicstatus(incometertiles)among early-stageandestablishedbusinesses(EBs)inOntarioand referenceeconomies.......................................................................44

Figure29:Exitreasonsamongearly-stageentrepreneursin Ontarioandreferenceeconomies...................................................45

Figure30:Experts’evaluationofavailabilityoffinanceto entrepreneursinOntario................................................................47

Figure31:Experts’assessmentofadequacyofgovernmentpoliciesin Ontarioinsupportofentrepreneurship.........................................48

Figure32:Experts’assessmentofgovernmentpoliciesfor entrepreneurshipinOntario...........................................................49

Figure33:Experts’assessmentofentrepreneurshipeducationin Ontario.............................................................................................49

Figure34:Experts’assessmentofR&DtransferinOntario...........................50

Figure35:Experts’assessmentofcommercialinfrastructurein Ontario ............................................................................................. 51

Figure36:Experts’assessmentofmarketopennessinOntario......................51

Figure37:Experts’assessmentofadequacyof commercialservicesinOntario.......................................................52

Figure38:Experts’assessmentofentrepreneurialcultureand normsinOntario.............................................................................52

Figure39:Experts’assessmentofthebusinesssector’s role in society ................................................................................... 53

TABLE OF FIGURES

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TheGlobalEntrepreneurshipMonitor(GEM)isaglobal,comparativeandlongitudinalstudy,aimingtoenhancetheunderstandingoftheimpactofentrepreneurshiponeconomicgrowth.GEMfocuseson the entrepreneurasthekeyunitofanalysis,thusenablingthemonitoringoftheactualentrepreneurialprocessfromitsearlieststages.Thelargeststudyofentrepreneurshipintheworld,GEMhasbeenprovidingannualevaluationsandcomparisonsofentrepreneurs’characteristics,motives,growthaspirations,attitudestowardsentrepreneurshipandthe“entrepreneurialclimate”ofscoresofeconomiesindifferentstagesofdevelopment.GEMhasbeenrunningfor17years,since1999,andannuallyreviewstheentrepreneurialactivityineachparticipatingeconomy.62economiesofvariouslevelsofeconomicdevelopmentparticipatedinthe2015GEMsurvey.In2015,approximately198,000adultsfrom62countriesparticipatedinGEM.

StudyingentrepreneurshipinOntariofromtheGEMperspectiveenablesustoidentifypatternsofearly-stageentrepreneurialactivitiesinOntarioandcompareentrepreneurship’sperformancetosimilardevelopedeconomies.The2015GEMOntarioreportcomparesOntario’sentrepreneurialmeasureswiththoseofmajoreconomies:Canada,US,Australiaandgroupsofdevelopedcountries(e.g.G7,EU28,G20andInnovation-DrivenEconomies(IDEs).Inaddition,threeothereconomies,Norway,GermanyandIsrael,consideredleadersinspecificentrepreneurialaspects,havebeenaddedtothereportasreferencepoints.SomemetricsofchangeovertimeinOntarioarealsopresented.

In2015,GEMtrackedratesofentrepreneurialactivityin62economiesbasedontheAdultPopulationSurvey(APS)ineachparticipatingeconomy.Recognizingtheinterdependencybetweenentrepreneurshipandtheeconomicgrowthoffirms,GEMalsoexaminedthetopicofintrapreneurshipinparticipatingeconomies.InCanada,thestratifiedsampleincluded3,561adultsbetweentheagesof18and99,803ofwhomwerelocatedinOntario.However,topermiteasycomparisonwithresultsofGEMsurveysinothercountries,weprovideananalysis

EXECUTIVE SUMMARY


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onlyofadultsbetweentheagesof18and64.ThecomplementaryProvincialExpertSurvey(PES)providesacomprehensiveexaminationoffactorsaffectingentrepreneurshipinOntario.ThePES’sresultsarebasedoninterviewsconductedwith36expertsfromdiversebackgroundsconnectedtoentrepreneurshipinOntarioregardingentrepreneurialframeworkconditionsintheprovince.

The Importance of EntrepreneurshipEntrepreneurshipiswellunderstoodtobeakeyfactorineconomicgrowthandjobcreation,anditisusuallypromotedinpursuitofthesegoals.Entrepreneurshipisalsoanimportantfactorinthesocialandpersonalwell-beingofacountry’spopulation.

GEMdefinesentrepreneurshipas“anyattemptatnewbusinessornewventurecreation,suchasself-employment,anewbusinessorganization,ortheexpansionofanexistingbusiness,byanindividual,ateamofindividuals,oranestablishedbusiness”.AlthoughGEM’sdefinitionofentrepreneurshipisintendedtobeinclusive,itdeliberatelyemphasizesentrepreneurshipthataimsprimarilyateconomicvaluecreation.

ATTITUDESAttitudestowardentrepreneurialactivityarepositiveinOntario.Ontarioenjoysoneofthehighestlevelsofpositiveattitudesreportedtowardentrepreneurshipamongtheinnovation-driveneconomiessurveyed.Comparedtothereferencegroupofcountries,Ontarioshowsthehighestrateofrespondentswhoperceivegoodconditionstostartabusiness(53.2%ofadultrespondents).Further,Ontariansreporthighlevelsofconfidenceinhavingtheneededskillstoseizeopportunities(51.2%),whicharecomparablyhigherthanreferencecountries’reportedratesofconfidence.Atthesametime,nearlyhalfofOntariansexpresstheconcernthatafearoffailurewouldpreventthemfromstartingabusiness(46.6%).

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ACTIVITYForthefirsttime,Ontario,togetherwithCanada,showsthehighestrateoftotalearly-stageentrepreneurialactivity(TEA),comparedtodevelopedcountriesinthereferencegroup.Inpreviousyears,theUSheldfirstplace.In2015,14.4%ofOntarianswereinvolvedinsettingupafirm,comparabletoCanada(14.7%)andhigherthanAustralia(12.8%)andtheUS(11.9%).SimilartoCanada,nearly10%ofOntarianshavebeenengagedforatleastoneyearinanearly-stageventurethathasnotyetpaidwages,while5.2%arerunninganincome-generatingbusinessagedlessthan3.5years.Inaddition,amongthedevelopedcountries,OntarioandCanadashowthehighestlevelofentrepreneursrunningestablishedbusinesses(EBs).EBsaredefinedasthosegeneratingincomeandoperatingformorethan3.5years,andOntarioandCanadahaveratesof9.1%and8.8%respectively,followedbyAustralia(8.7%)andtheUS(7.3%).

MOTIVESThedatarevealsthatOntariansaredrivenbyopportunitymorethannecessitywhenembarkingonentrepreneurialactivity.Ontariansshowsixtimesmoreopportunity-drivenearly-stageentrepreneurshipthannecessity-drivenentrepreneurship,andCanadashowsasimilarpattern.AustraliansfollowtheCanadianpatternwith10.9%indicatingopportunitymotives,exhibitingahigherratioofopportunitytonecessity,thusindicatingahighergapbetweenthesetwoprincipalmotivesofentrepreneurship.

Amongtheopportunity-drivenmotives,independenceisconsideredthemainmotiveforentrepreneurshiporventuringbymorethanhalfofadultearly-stageentrepreneursinOntario,rankingthemthirdafterAustraliaandGermany.Withregardtothemotivetoincreaseincome,Ontariansindicatealowerrate(29.2%)comparedtoCanada(36.4%),theUS(42%),Israel(54%)andtheotherreferencegroupofcountries.Approximately9%ofOntariansaremotivatedtostartabusinessbythedesiretomaintainincome,similartoCanada(10%)butlowerthanAustraliaandGermany(eachat13%).

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ENTREPRENEURSHIP AND SECTORSMostOntarioearly-stagebusinessesareinconsumer-orientedservices,followedbybusiness-orientedservices,thetransforming(manufacturing)sectorand,withthelowestrate,theextractivesector(e.g.mining,agriculture).

Norway(8.7%)hasthehighestrateofstart-upsintheextractivesector,followedbyAustralia(6.4%)andOntario(6.3%).AlthoughOntarioshowsahigherrateofentrepreneurialactivityinthebusiness-orientedservicessector(28%ofearly-stageentrepreneurs)thanCanada(24.7%),itsperformanceinthissectorislowerthanthatofNorway(37%),Israel(35%)andtheUS(32.8%).Ontario’srateofearly-stageentrepreneurialengagementinthetransformingsector(17.8%)andconsumerservice-orientedsector(47.8%)isslightlylowerthanCanada’s(19.9%and51.5%respectively).AmongEBs,theOntariobusiness-orientedservicessectorcommandsarateof45.2%versus39.1%inCanada.AmongEBs,moreOntariansarerunningormanagingbusiness-orientedservices(45.2%)thanconsumer-orientedservices(28.1%).

Datashowarelativelylargedropofparticipationratesamongconsumerservice-orientedinitiatives,fromthestart-upstage(47.4%)comparedtotheestablishedstage(27.4%),apparentlyreflectingthedifficultyofsmallservice-orientedventurestosurviveovertime.EBsinOntario(8.1%)andCanada(8.2%)showsimilarratesintheextractivesectorandahigherratecomparedtoearly-stageOntariostart-upsintheextractivesector.

INNOVATIONOntarioTEAventuresalsousetheverylatesttechnologiesatthehighestrates(12%)andnewtechnologiesavailableinthelastfiveyears(21%),comparedtotheUSandAustralia.Canada(12.5%)isalsocomparabletoOntario.

Ontario’srelativelyextensiveuseofnewtechnologiesdoesnotnecessarilytranslateintocommercializationoftechnologiesanddeliveringuniqueproductsandservicestoconsumers.OntarioshowsalowerlevelofTEAbusinessesofferingrelativelyuniqueandinnovative

EXECUTIVE SUMMARY


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products(40%)thanthereferencegroupofcountriessuchasGermany(49.3%),Australia(46.5%),theUS(43.8%),andCanada(43.2%).Ontarioranksfifthinproductsnewtosomecustomers,followingCanada(39.3%),Germany(35.2%),Australia(35%)andtheUS(32.8%).Ontariorankssecond(15%)inintroducingproductsnewtoallcustomers,afterCanada(18%).

AmongEBs,Ontario’sshareofusingtheverylatesttechnologyismarginallylower(1.6%)thanCanada’s(2.3%).Nearly5%ofOntarioEBsusenewtechnology,lessthanCanadaEBs(7.6%).Only1.6%ofOntarioEBssellproductsthatnootherbusinessoffers,and28.6%sellproductsthatfewbusinessesoffer,comparedto37%inCanada.Approximately30%ofOntarioEBssellproductsthatarecompletelynewornewtosomecustomers,comparedtojustover40%ofCanadianEBs.

ASPIRATIONSOntarioentrepreneursshowrelativelymodestjobcreationaspirationscomparedwithreferencecountries.10.7%ofOntarioentrepreneursexpecttocreateanynumberofjobswithinfiveyears,and2.3%expecttocreatemorethan19jobswithinfiveyears,bothofwhicharecomparabletoCanada,theUSandAustralia.Ontarioentrepreneurshaveslightlyhigherjobcreationexpectations(e.g.creatingmorethan10jobsandgrowthofover50%infiveyears)thanCanadawith21%and19.5%respectively,butlowerthanintheUS(25.3%)andAustralia(24.2%).Ontarioentrepreneursshowasimilarlevelofnewproduct-marketcombinations(29%)tothoseofInnovation-DrivenEconomies(IDEs)whichrestat30.6%.However,Ontarianentrepreneurs’performanceinnewproduct-marketcombinationsislowcomparedtoCanada,theUS(36%)andAustralia(34.1%).

Ontariostart-upsarealsorelativelyexport-oriented.Theyleadthereferencegroupwith32.6%indicatinghavingmorethan25%oftheirexportrevenuesfromoutsidethecountry.

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INTRAPRENEURSHIP Nearly11%ofOntarianswereinvolvedinentrepreneurshipwithinorganizations(intrapreneurship)asleadersinthepastthreeyears,slightlymorethanintrapreneurshipratesinCanada,theUSandIsraelandmorethaninIDEs(8%).Yetonly7%ofOntariansindicateacurrentinvolvementinintrapreneurship,alowerratecomparedtoCanada(7.4%),theUS(8%),Australia(9%)andNorway(9.7%).

DEMOGRAPHICSAGE:OntarioandCanadaexhibitthehighestrateamongthereferenceeconomiesofearly-stageentrepreneurialactivityinallagecohorts.Nearly17%ofOntariansintheagecohortsof35-44and45-55areinvolvedinentrepreneurship,exhibitingthehighestparticipationrateinearly-stageentrepreneurship,comparedtothereferencegroupofeconomies.

Amongtheagecohortof18-24,Canada(18.2%)andOntario(15.9%)leadwiththehighestentrepreneurialrates.7.5%ofOntariansintheagegroupof55-65areinvolvedinentrepreneurialactivity,placingOntariosecondafterCanada(9.5%)andcomparabletotheUS(7.4%).Ontarioisalsoratedsecondwith15.2%involvedinentrepreneurshipintheagecohort25-34,followingCanada(16.6%).AmongEBs,16.4%ofOntariansinthe45-54agecohortareinvolvedinleadingormanagingabusiness,thehighestamongreferencegroupcountriesincludingCanada(15.4%),Australia(13.2%),andtheUS(12%).Similarly,OntarioshowedthehighestEBparticipationrateintheagegroupof25-34(6.3%).

Intheagegroupsof35-44and55-64,Ontarians’participationinEBsranksthird,withslightlylowerparticipation(7.1%and10.1%respectively)thanCanada(7.4%and11.4%respectively).Over6%ofOntariansintheagegroupof25-34areinvolvedinleadingormanaginganEB,showingthehighestrateofparticipationinthisagecategorycomparedtoothereconomies.Nearly1%ofOntariansareinvolvedinleadingormanagingEBsintheagegroupof18-24,comparabletoCanada(0.9%)andtheUS(1.1%).

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EDUCATION:Datashowthatthehighertheeducationlevel,thehighertherateofinvolvementofOntariansinearly-stageentrepreneurialactivities.Therateofearly-stageentrepreneurshipinOntarioisthehighestamongthosewithpost-graduateexperience(17.6%);however,itislessthaninCanada(19.6%).

GENDER:InOntario,15%ofmalesand13.8%offemalesbetweenages18and64areengagedinearly-stageentrepreneurialactivities,meaningthatforevery100maleentrepreneursinOntario,thereare92femaleentrepreneurs.

Ontarianfemaleandmaleentrepreneursvaryintheirperceivedskillsandattitudestowardsrunningabusiness.Ontarianfemalesarelesslikelytohaveanacquaintancewithentrepreneurs(30.5%),andreportlowerconfidenceintheircapabilitiestorunabusiness(41.8%)thanOntarianmales(32%and61%respectively).OntarianmalesalsoindicateahigherrateofconfidenceintheirentrepreneurialcapabilitiesthanCanadianmales(57.4%),butslightlylowerthanUSmales(62.2%).

Inaddition,Ontarianfemalesperceivearelativelyhighrateofentrepreneurialcapabilities(41.3%)butlowerthanfemalesinCanada(43.2%)andtheratesreportedbyUSfemales(49.5%).However,femalesinOntarioseemoreentrepreneurialopportunities(54%)thanthosereportedbyOntarianmales(52%)andthoseofCanadianfemales(51.7%)orUSfemales(43.5%).Ontarianfemalesshowedthehighestrateoffearoffailurethatwouldpreventthemfromstartingabusiness(52.4%)comparedtoOntarianmales(40.7%),Canadianfemales(47%)andUSfemales(34.5%).Thisreportedfearoffailureisasignificantfinding,givenOntarianfemales’abilitytoseeopportunityandtheirhighlevelofconfidenceintheircapabilities.

Furtheranalysisofgenderrepresentationineconomicsectorsrevealedthatoverall,femaleentrepreneursshowedhigherratesofinvolvementinservice-orientedventures,includingsocialandprofessionalservices,andwholesaleandhospitalityventures,whileOntarianmalesshowhigherratesofinvolvementinthemanufacturing,informationandcommunicationandextractivesectors.

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SOCIAL CLASS:Ontarioearly-stageentrepreneurshipreachesits highest levels in the lowest as well as the highest social classes (16%).Inbothcases,ratesofearly-stageentrepreneurialactivityarehigherthaninCanadaandotherreferencegroups.AmongEBs,Ontario’shighestsocialclasshasthehighestrateofparticipation(14%).Thismightindicatetheabilityofentrepreneursinhighersocialclassestoovercometheearly-stagechallengesmoreeffectivelythanentrepreneursinlower-incomegroups.

EXIT Nearly3%ofOntarianentrepreneurshaveexitedandclosedabusinessinthepastyear,while2.7%haveexitedabusinessthatisstillinoperation.AmongthemainreasonsforexitingabusinessinOntarioare:lackofprofitability(20.6%ofallexits),familyorpersonalreasons(17.6%),opportunitytosell(14.7%)andanotherjoborbusinessopportunity(11.8%).

THE FRAMEWORK CONDITIONS OF ENTREPRENEURSHIP IN ONTARIOTheProvincialExpertSurveyincluded36experts’evaluationsofnineframeworkconditions’impactsonentrepreneurialactivityinOntario.Expertsassessedvariousfactorswithineachofthenineframeworkconditions,providingasenseofthestrengthsandweaknessesofOntario’sentrepreneurshipecosystem.

Financing–VentureCapitalists(VCs)andbusinessangelsarefoundtobethemostsufficientsourcesoffinancing,followedbyinformalindividualsandInitialPublicOfferings(IPOs).Privatelenders’fundingandgovernmentalsubsidiesappeartobeinadequatecomparedtotheothersourcesavailableforOntarioentrepreneurs.

Governmental policies–Ontario’staxratesandregulationsareconsideredquitepredictable,thusreducingbusinessuncertainty.Ontheotherhand,governmentalassistanceandpublicprocurementfornewandgrowingfirmsatthelocalandnationallevelsareconsideredinsufficient.

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Governmental programs–Expertsindicatehighprofessionalismofgovernmentalassistanceprograms’personnelthatsupportnewandgrowingfirms.Ontario’sscienceparksandbusinessincubatorsarealsoratedashighlyeffective.Ontheotherhand,assistanceprogramsarenotavailabletoeveryonewhoneedsthemandtheyarenotavailableasa“one-stop”service.

Educations and training–EntrepreneurshipeducationinOntarioisconsideredfavourableatthepost-secondaryeducationlevel,butthereisinsufficientencouragementofentrepreneurialbehaviorattheprimaryandsecondaryeducationlevels.

Research and development (R&D) and technology commercialization–ExpertsindicatefavorableconditionsforR&DtransferforscientistsandengineersinOntario.Atthesametime,expertspointtothebarrierstocommercialization,especiallyinefficienttransferoftechnologiesfromuniversitiestothemarket.Expertsalsoindicatethatfirmslacksufficientgovernmentalsupportforacquiringnew technologies.

Commercial infrastructure–Expertsindicateafavourableandaffordablecommercialinfrastructureforsupportingnewfirms’growthinOntario.Thisincludesfinancialandlegalservicesaswellassub-contractorsandconsultancyservices.

Internal market openness–Althoughgrowingfirmscaneasilypenetratenewmarketsandaffordthecostsinvolvedwithit,substantialchallengesarebelievedtoexistduetounfaircompetitiveblockingmovesbyestablishedfirms.

Physical infrastructure–Ontario’sphysicalinfrastructureisconsideredfavorableandaffordabletonewandgrowingfirms.

Cultural and social norms–Ontariohasanentrepreneurship-orientedculturethatsupportsnewandgrowingfirms’development.Ontarians’favourableattitudetowardself-responsibility,creativity,innovativenessandentrepreneurialrisk-takingareatthecoreofentrepreneurialculture.

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GEM AND ONTARIOTheGlobalEntrepreneurshipMonitor(GEM)istheworld’slargestlongitudinalstudyofentrepreneurialactivityandeconomicgrowth.TheuniquenessofGEM,comparedtoothermajorcross-nationalstudies,isinitsfocusontheentrepreneurasthekeyunitofanalysis,whichenablesmonitoringtheactualentrepreneurialprocessfromitsearlieststages.TheGEMresearchframework,asillustratedinFigure1,describesentrepreneurshipwithinitsecosystemandrecognizestheinteractionoftheentrepreneur’sbehaviorandcharacteristicswiththeenvironment.

GEMusesdatafromanAdultPopulationSurvey(APS)toexamineentrepreneurs’characteristicsandbehavior,anddatafromaNationalExpertSurvey(NES)toexaminesocial-cultural,politicalandeconomicframeworkconditionsineachparticipatingcountry.Thus,GEMpermitscomparisonofentrepreneurs’characteristics,motivesandgrowthaspirationsalongwiththeirsocieties’“entrepreneurialclimate,”aswellastheirattitudestowardsentrepreneurship.In2015,approximately198,000adultsfrom62countriesparticipatedinGEM.

Figure 1: The GEM Conceptual Framework

(Source: GEM 2015/16 Global Report)

INTRODUCTION

Social, cultural, political, economic context

National framework conditions

Outcome (socio-economic development)

Entrepreneurial output(new jobs, new value added)

Social values about entrepreneurship

Individual attributes (psychological,

demographic, motivation)

Entrepreneurial activity

► By phasesNascent, new, established,discontinuation

► By impactHigh growth,innovative,Internationalization

► By TypeTEA, SEA, EEA

Entrepreneurial framework conditions

Basic requirementsEfficiency enhancers

Innovation and business sophistication

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The62participatingcountriesrepresentthreestagesofeconomicdevelopment,asmeasuredbyWorldEconomicForum(WEF)usingGDPpercapitaandshareofprimarygoodsintheexportmix:

• Factor-driveneconomieshavelowGDPpercapitaandexport mainlynaturalresources.

• Efficiency-driveneconomiesareinthemiddlerangeofGDPper capitaandtheirexportmixincludesmorevalue-addedproducts.

• Innovation-DrivenEconomies(IDEs)haveapredominantservice sectorandbusinessesthatarerelativelyknowledge-intensive. CanadaandOntarioareclassifiedunderthiscategory.

AnotherwayGEMdistinguishesbetweenentrepreneurialactivitiesamongdifferenteconomiesisconveyedinakeydifferencebetweentwomotivesforventuring: • Opportunity-Driven Entrepreneurship–commonin developedandhealthyeconomiesandhasmajorimpacton prospectsofeconomicgrowthandjobcreation.

• Necessity-Driven Entrepreneurship–predominantinless developedeconomiesandintimesofeconomiccrisisorrecession, whereindividualslackemploymentalternatives.

The2015GEMCanadareportwasreleasedonJune27,2016,andoutlinesCanada’sperformanceinvariousaspectsofentrepreneurship.The2015GEMOntarioreportexaminestheprovincialearly-stagesentrepreneurialactivitiesofstart-upsandgrowingventures.

Thus, the main objectives of this report are to: a)Describetheprincipalfeaturesandtrendsofentrepreneurshipin Ontario.

b)CompareentrepreneurshippatternsbetweenOntarioandCanada andothercomparableeconomies.

c) Assessthecontributionandimpactofentrepreneurialactivityin Ontariotoeconomicgrowth.

d)Makepracticalrecommendationstopublicpolicymakersand otherstakeholdersaimingtopromoteandcultivate entrepreneurialactivityinOntario.

INTRODUCTION


ForabroaderandcomplementaryperspectiveonentrepreneurshipinCanada,itissuggestedtoreadtheOntarioreportinconjunctionwiththe2015/16GEMGlobalandGEMCanadareports.

ENTREPRENEURSHIP AND ECONOMIC GROWTH – THE GEM MODEL Inthebasicentrepreneurialprocessmodel,newfirmcreationtakesplaceinthreestages: • Opportunityrecognitionstage • Businessconceptstage • Organizationcreationstage

Inreality,theventurecreationprocessisinternallyandexternallystimulated.Itisaniterative,nonlinear,feedback-drivenprocessthatinteractswithinthelargerbusinessandsocialecosystem.GEM’sconceptualframeworkrecognizesthiscomplexityandthemultifacetednatureofentrepreneurshipwhichdefinestheneedforproactivity,riskresponsiblebehavior,andaninnovativeattitudeonthepartoftheentrepreneur.Entrepreneursintroducedifferingamountsofnoveltyduringventurecreation,andthevaryingamountsofnoveltyqualitativelydistinguishonekindofentrepreneurshipfromanother(Bhave,1994).

Entrepreneurshipandinnovativenessplayamajorroleinestablishedfirms’growthanddevelopment.Throughemployees’innovationsofproductsandprocesses,firmscangrowwithinexistingandnewmarkets.The“intrapreneur,”asfirstdefinedbyPinchot(1984),alsoknownasan“ideachampion,”takesdirectresponsibilityforturninganideaintoacommercializedproduct.Intrapreneurs’abilitytoinnovateandbringnewproductsandservicestothemarketthroughatangledinternalorganizationalenvironment,mayturnthemintomarkets’agentsofchangeintheSchumpeteriansense,thatis,engagedinaprocessof“creativedestruction”oronethat“revolutionizestheeconomicstructurefromwithin”bytransformingtheoldandcreatingthenew.Thesecharacteristicsmightdifferentiatethemfromotherentrepreneurs(Schumpeter,1934).

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INTRODUCTION


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Accordingly,theGEMmodelemphasizestheinterdependencybetweenentrepreneurshipandeconomicdevelopment,aimingtorevealenablingorhinderingconditionsforentrepreneurialactivity(includingsocialvalues,personalattributesandentrepreneurialecosystem),andoffersaplatformforassessingentrepreneurialactivity’scontributionstoeconomicgrowth(Source:GEM2015/16GlobalReport).

Toachievecomprehensiveinformationonentrepreneurshipinanyeconomy,GEMusestheAdultPopulationSurvey(APS),whichfocusesontheindividualentrepreneur’secosystem,basedonthefollowingvariables: • Individual attributes–perceptionsaboutopportunities, capabilitiestoactentrepreneurially,entrepreneurialintentions andfearoffailure

• Social values–reflectionsonhowthesocietyvalues entrepreneurialbehavior

• Entrepreneurial indicators–differentformsof entrepreneurialactivityalongthelifecycleofaventure.In2015, GEMbringstheintrapreneurintofocusandexamineshisorher roleinpursuinginitiativeswithinorganizations.

Interviewingtheindividualentrepreneurenablescomprehensionoftheentrepreneurialprocessfromitsearlyinception,whenthecommitmenttonewventurecreationoriginates,torunningthenewandestablishedventure.TheGEMProcessModelalsotakesintoaccountthecircumstancesleadingtoexitanddiscontinuanceofenterprise.Figure2illustratestheentrepreneurialphases.

INTRODUCTION


14

Figure 2: GEM Process Model


Total Early-Stage Entrepreneurial Activity (TEA)

Individual attributes

► Gender

► Age

► Motivation

Industry

► Sector

Impact

► Business growth

► Innovation

► Internationalization

Nascent entrepreneur:involved in setting up a business

Owner-manager of a new business(more than 3.5 years old)

Discontinuation of business

Owner-manager of an established business(more than 3.5 years old)

Firm Birth

Early-stage Entrepreneurship Profile

Potential entrepreneur:opportunities, knowledge and skills

Conception Persistence


15

RESEARCH METHODOLOGY AND SCOPE GEMwasfounded17yearsagoin1999toannuallyreviewtheentrepreneurialactivityinparticipatingeconomies.62economiesofvariouslevelsofeconomicdevelopmentparticipatedinthe2015GEMsurvey.Basedontheunderlyingassumptionofinterdependencybetweenentrepreneurshipandeconomicdevelopment,threesourcesofdataareincluded:

• Adult Population Survey (APS) Theglobalreportisbasedonresultsfrom62economies andnearly200,000adultsacrosstheworld.ThecoreoftheAPS questionnaireisidenticalineachcountry.Itasksrespondents abouttheirattitudestowardsentrepreneurship,whetherornot theyareinvolvedinsomeformofentrepreneurialactivityand, ifso,whattheiraspirationsfortheventureare.Inaccordancewith GEM’sapproach,participantsfortheAPSwererandomlyselected andsurveyedbetweenJuneandSeptember2015.Thestratified sampleincludedadultsbetweentheagesof18and99.The sampleddatawasweightedtoensureaccuracybyagerange, genderandprovince.3,561adultsweresurveyedinCanada,of which 803 were located in Ontario.

AlthoughtheCanadaandOntariosurveysincludedadultrespondents inthe65-99agecohort,weprovideananalysisonlyofadults betweentheagesof18-64forthepurposeofcomparisonwithresults ofGEMsurveysinothercountries.

Ontarioisconsideredoneofthemosthighly-developedprovinces inCanadaandmakesamajorcontributiontoCanada’seconomic developmentwitha36,854USDGDPpercapita.Giventhelackof GEMsurveysinothercomparablesubnationaleconomiesinother countries,wecompareOntariotoCanadaasawholeandtoother developedeconomiesincludingtheUnitedStatesandAustralia aswellastogroupsofdevelopedeconomiesofG7,EU28,G20and Innovation-DrivenEconomies(IDEs)asdefinedbyGEM.

METHODOLOGY


16

Occasionally,weincludecomparisonofthefollowingcountriesthat areconsideredleadersinspecificaspectsofentrepreneurship:

• Norway–knownforitshighentrepreneurialratesandits economybasedonnaturalresourceswithapercapitaGDPof 97,299.6USD

• Germany–consideredthelargesteconomyinEUwitha GDPpercapitaof47,773.9USD

• Israel–knownasaknowledge-basedandadvanceddeveloped marketeconomywithaGDPpercapitaof37,206.2USD

(Sources: http://www.fin.gov.on.ca/en/economy/ecupdates/factsheet.html http://data.worldbank.org/indicator/NY.GDP.PCAP.CD?page=5)

• National Expert Survey (NES) and/or Provincial Expert Survey (PES) Aquestionnairesurveythatwasdevelopedandusedinthe globalGEMprojecttoquerynationalexperts,wasalsousedin Canadaatthenationalandprovinciallevels.36expertsfrom Ontariowereinterviewedandcarefullyselectedtocreateagroup ofindividualswithdiversebackgrounds.Allareconnectedto entrepreneurshipinOntarioaccordingtooneormoreofthenine FrameworkConditionsindicatedintheGEMconceptualmodel. Expertscompletedanonlinesurveyinwhichrespondentswere askedtoindicatetheirdegreeofagreementwithstatements regardingentrepreneurialconditionsinOntario.

• Other Statistics Sources–Inthisreport,weoccasionally includestatisticsonnationalandinternationaleconomic measurestoprovidefurtherinsightintotheresultsofthe GEMOntarioadultpopulationandexpertsurveys.

METHODOLOGY


17

ATTITUDESAttitudestowardsentrepreneurshipsuggesthowtheadultpopulationregardsentrepreneurshipasacareerchoice.

FourquestionsassesstheOntarioadultpopulation’sperceptionofcapacityforentrepreneurship: • Doyouknowsomeonewhostartedabusinessinthepasttwo years? • Doyouthinkthereisagoodopportunitytostartabusinessin thenextsixmonths? • Doyouhavetherequiredknowledge/skillstostartabusiness? • Wouldfearoffailureinhibityoufromstartingabusiness?

Figure 3: Personal attitudes towards entrepreneurship in Ontario and reference economies

FINDINGS - ADULT POPULATION SURVEY

Capacity

0.0%

17.5%

35.0%

52.5%

70.0%

ON CA US AU Germany Norway Israel G7 G20 EU28 IDE

% 18-64: Knows someone who started a

business in the past 2 yrs

% 18-64: Good conditions to start a business in next

6 mos in area I live

% 18-64: Has required knowledge/skills to

start a business

% 18-64: Fear of failure would prevent starting a

business

Capacity

0.0%

17.5%

35.0%

52.5%

70.0%

ON CA US AU Germany Norway Israel G7 G20 EU28 IDE

% 18-64: Knows someone who started a

business in the past 2 yrs

% 18-64: Good conditions to start a business in next

6 mos in area I live

% 18-64: Has required knowledge/skills to

start a business

% 18-64: Fear of failure would prevent starting a

business


18

AsillustratedinFigure3,attitudestowardentrepreneurshipamongOntariansarepositiveandamongthehighestratedwhencomparedtodevelopedcountries.Ontario’sscoresaresimilartoCanada’sscores.Ontarianshaveoneofthehighestratesofconfidenceaboutpossessingtherequiredknowledgeandskillstostartabusiness(51.2%ofadults)andofhavinggoodconditionstostartabusiness(53.2%)amongdevelopedcountriesingeneral,andIDEcountriesinparticular.31.2%ofOntariansknowsomeonewhostartedabusinessinthepasttwoyears.Butatthesametime,almosthalfofOntarioadults(46.6%)believethatfearoffailurewouldpreventthemfromstartingabusiness,ahigherratethantheaverageininnovation-drivencountries(33.1%).

TheresultspointtoaninterestingcombinationofattitudestowardsentrepreneurshipinOntario.Ontariansdisplayahealthysenseofconfidenceintheirentrepreneurialcapabilities,generallyexceedingtheirpeersincomparativecountries.UnliketheUS,however,whichdisplaysasimilarhighlevelofconfidence,Ontarianspossessarelativelyhighdegreeoffearoffailure,whichmayindicatealowlevelofrisktolerance.Ontarianentrepreneursappeartopossessahigher-than-averagelevelofriskaversion,whichmayrepresentasignificantbarriertofurthergrowthinentrepreneurialactivitiesintheprovince.

ACTIVITYTheanalysisfocusesontwomeasureswhichtogetherrepresentthetotalearly-stageentrepreneurialactivity(TEA)inOntario:

1) The nascent entrepreneurship rate–thepercentageofthe adultpopulationwhoarecurrentlyengagedinsettingupa businessthathasnotpaidsalary,wagesorotherpaymentsto ownersformorethanthreemonths. 2)The new business ownership rate–percentageoftheadult populationwhoarecurrentlyowners/managersofnewbusinesses thathavepaidwages,salariesoranyotherpaymentstoownersfor morethanthreemonthsbutnotmorethan3.5years.

Asmentioned,thesetwomeasurescombined(countingeachindividualonlyonce)yieldanoveralltotalearly-stageentrepreneurialactivity(TEA),ortheentrepreneurialactivityrate.



19

Ontarianswereaskedabouttheirinvolvementinvariousstagesofentrepreneurship.Answerswerecategorizedasfollows:

• TEA–totalearly-stageentrepreneurialactivity,involvedin settingupafirmorowner/managerofayoungfirm.

• Nascent Entrepreneur-anowner/managerorpartlyowner/ managerofaone-year-oldbusinessthatdoesn’tpaywagesyet.

• Baby Business-anowner/managerofabusinessagedless than3.5yearsthatgeneratesincome.

• Established Business (EB)-owner/managerofabusiness withincomethatisactiveformorethan3.5years.

Figure 4: Entrepreneurial activity in Ontario and reference economies

Figure4illustratesthatentrepreneurialactivityinOntarioislargelycomparabletothatofCanadaandbothshowthehighestratesofactivityinthevariousentrepreneurialstages,comparedtootherdevelopedcountries.14.4%ofOntariansareinvolvedinsettingupanearly-stagefirm,comparabletoCanada(14.7%)andhigherthanAustralia(12.8%)andtheUS(11.9%).SimilartoCanada,nearly10%ofOntarianshavebeenactiveforatleastoneyearinaventurethathasnotyetpaidwagesorgeneratedincome,while5.2%wererunninganincome-generatingbusinessagedlessthan3.5years.Thisdifferencemaybeattributedtotheliabilityofnewnessofearly-stagestart-upswhichfaceasetofdifficultiesassociatedwiththeirnewlyfoundedstatus,thereforeincreasingtheirvulnerabilityandabilitytocreatelong-termsustainability(Stinchcombe,1965).


Activity

0.0%

4.0%

8.0%

12.0%

16.0%

ON CA US AU DE NO IL G7 G20 EU28 IDE

Setting up firm or owner of young firm (TEA)

Active past year (part) owner, no wages yet

Owns-manages business with

income <3.5 years

Owns-manages business with

income >3.5 years


20

Inaddition,Ontariansshowthehighestlevelofinvolvementin(EBs)asownersormanagers(9.1%)amongthereferencegroupofcountriesincludingCanada(8.8%),Australia(8.7%)andtheUS(7.3%).

Itshouldbenotedthat,forthefirsttime,OntarioandCanadahavedisplayedthehighestTEAratesamongsttheirpeersindevelopedandinnovation-drivencountries.Inpreviousyears,theUSheldthefirstplaceinthisregard.ThismayrepresentasignificantperformanceimprovementinentrepreneurshipparticipationinOntarioandCanada.ThereareseveralfactorsthatmaycontributetoOntario’shighperformance,whichwillbeexaminedfurtherinthefollowingsections.

ACTUAL ENTREPRENEURIAL ACTIVITY VERSUS INTENTIONS TO VENTUREFigure5comparesactivityofearly-stageentrepreneurs(nascentandyoungbusinesses)withintentionstoventurewithinthreeyears.TheOntariorateof17%iscomparabletotherateofintentiontostartabusinessinCanada,theUSandAustralia.AdultOntariansreporthavinggreaterintentionstostartabusinessinthenextthreeyears(17%)thanin2014(15.5%),butfewerthanin2013(17.6%).

Figure 5: Entrepreneurial activity and entrepreneurial intent in Ontario and reference economies


Chart 19

0.0%

4.5%

9.0%

13.5%

18.0%

ON CA US AU G7 G20 EU28 IDE

Expects to start a new business in 3 yearsSetting up firm (nascent) or owner of young firm


21

MOTIVESGEMdistinguishesbetweentwomainmotivesforventuring:

• Thenecessitymotive,whichindicatesbecominganentrepreneur duetolackofotheralternativestogenerateincome,and

• Theopportunitymotive,whichindicatesthatoneisbeing“pulled” intobusinessfollowinginternalmotivesofself-managementand autonomy.

GEMresearchhasshownthatmostentrepreneursintheworldareopportunity-driven,regardlessoftheircountry’seconomicdevelopment.However,thehigherthelevelofacountry’seconomicdevelopment,thehighertherateofopportunity-drivenentrepreneurs.(Source:GEM2015/16GlobalReport)

Figure 6: Opportunity vs. necessity motive in Ontario and reference economies

In2015,almost12%ofOntarioadultswereinvolvedinopportunity-driven,early-stageentrepreneurialactivity.Only2%indicatedanecessity-drivenmotiveintheirearlystageofentrepreneurialactivity.TherestofCanadashowsasimilarpattern.AustraliansarefollowingtheCanadianswith10.9%indicatingopportunitymotives(Figure6).

Comparedwithitspeers,includingtheUSandAustralia,Ontarioshowsahigherpropensitytoengageinopportunity-drivenentrepreneurship.Thisisanotabletrend,asitshowsthatnotonlyis


Motives

0.0%

3.0%

6.0%

9.0%

12.0%

TEA: Opportunity motive TEA: Necessity motive

ONCAUSAUDE NOILG7G20EU28IDE

Motives

0.0%

3.0%

6.0%

9.0%

12.0%

TEA: Opportunity motive TEA: Necessity motive



22

Ontarioaplaceofrelativelyhighentrepreneurialactivity,butalsowithbusiness-mindedentrepreneurswhoarewillingandabletoidentifyandleveragebusinessopportunities.

Table 1: TEA opportunity vs. necessity motives ratio 2015 and 2014 Ontario and reference group

Ontario Canada US Australia G7 G20 EU28 IDE

2015 5.9 6.0 5.7 6.7 4.9 3.2 3.5 4.5

Table1indicatestheratiobetweenopportunityandnecessitymotives.In2015,therateofopportunity-drivenentrepreneurshipwassix-timesgreaterthannecessity-drivenentrepreneurshipinbothOntarioandCanada.

ThefollowingTEAopportunitymotiveswereexamined:

• Independence • Increaseofincome • Maintainincome • Other,includingfamilybusiness

Figure 7: Opportunity motive in Ontario and reference economies (% of TEA entrepreneurs)


Figure 7: Opportunity motive in Ontario and reference economies (% of TEA entrepreneurs)DriversOpport

0.0%

15.0%

30.0%

45.0%

60.0%


Opportunity Type: Independence

Opportunity Type: Increase Income

Opportunity Type: Maintain Income

Opportunity Type: Other (including family

business)


23

Morethanhalfofadultearly-stageentrepreneursinOntario(51.9%)indicatethatindependencewastheirmotivetostartingabusiness,thirdafterAustralia(52.6%)andGermany(56%).Withregardtothemotivetoincreaseincome,Ontariansindicatealowerrate(29.2%)comparedtoCanada(36.4%),theUS(42%),Israel(54%)andtheotherreferencegroupsofcountries.ThemotiveofincreasingincomeisthehighestinIsrael(54%).Approximately9%ofOntariansweremotivatedtostartabusinessbythedesiretomaintainincome,similartoCanadawith10%,butlowerthanAustraliaandGermanywith13%each(Figure7).

Ontario’srelativelylowerrateinthemotiveofincreasingincomemightindicatethatwhilethereareasubstantialnumberofopportunity-drivenentrepreneursinOntario,theydonotviewtheirbusinessesprimarilyasasourceoffinancialwealth.Thismayimplya“lifestyle”orientationamongOntarianentrepreneurswhoaimtomaintainalevelofincomesufficienttomaintaintheirchosenwayoflifeandnotnecessarilytomaximizethegrowthofaventure.

Atthesametime,thismayindicateacertaininabilityoftheOntarioeconomytosuitablyrewardentrepreneursfinanciallyfortheirefforts.ThismaybeapotentialbarriertothefurtherimprovementoftheentrepreneurialecosysteminOntario.

ENTREPRENEURS IN ONTARIO’S ECONOMY BY SECTORAnalysisofGEMdataofentrepreneurialactivityamongsectorsaimstorefinetheunderstandingofeconomicdevelopmentthroughsuchactivity.Responseswereclassifiedintofourmainsectors:

• Extractive(e.g.mining,agriculture) • Transforming(e.g.manufacturing) • Business-orientedservices • Consumer-orientedservices



24

Figure 8: Entrepreneurial activity by sector in Ontario and reference economies (% of TEA entrepreneurs)

Figure8illustratesasimilarsectoraldistributionpatternamongOntarioandthereferencegroup.Mostearly-stagebusinessesareconsumer-orientedservices,followedbybusiness-orientedservices,transforming-sectorbusinessesand,withthelowestrateofstart-ups,theextractivesector.

Ontario(6.3%)andAustralia(6.4%)showthehighestrateofstart-upsinextractiveindustriesafterNorway(8.7%).Canadawith3.9%andtheUSwith3%indicatearelativelylowerrateofTEAinextractiveindustries.Ontarioshowsahigherrateofentrepreneurialactivityinthebusiness-orientedservicessectorwith28%,comparedtoCanada(24.7%),butlowerthanNorway(37%),Israel(35%)andtheUS(32.8%).However,intransforming(17.8%)andconsumer-orientedservicebusinesses(47.8%),OntarioisratedslightlylowerthanCanada(19.9%and51.5%respectively).

TEAdistributionamongsectorsforOntarioandCanadaiscomparedtothesectoraldistributionofEBsinFigure9.TheEBsectoraldistributionofferssomeinsightintoprospectsofnewinitiatives,althoughEBsmayrepresentarangeofeconomiccircumstancesatfounding.

FINDINGS - ADULT POPULATION SURVEYSectroTEA

0.0%

15.0%

30.0%

45.0%

60.0%


TEA: Extractive Sector TEA: Transforming Sector

TEA: Business-Oriented Services

TEA: Consumer-Oriented Services

SectroTEA

0.0%

15.0%

30.0%

45.0%

60.0%


TEA: Extractive Sector TEA: Transforming Sector

TEA: Business-Oriented Services

TEA: Consumer-Oriented Services


InnovTEAxEB

0.0% 15.0% 30.0% 45.0% 60.0%

TEA: Extractive Sector

TEA: Transforming Sector

TEA: Business-oriented services

EB: Extractive Sector

EB: Transforming Sector

EB: Business-oriented services

EB: Consumer oriented Services

TEA: Consumer-oriented Services

25

Figure 9: Entrepreneurial activity by sector type in Ontario and Canada

Business-orientedservicesEBscommand45.2%ofOntarioventuresversus39.1%inCanada.However,business-orientedserviceEBsinOntarioshowahigherrate(45.2%)comparedtobusiness-orientedservicestart-ups(28.1%).

Ontheotherhand,consumer-orientedserviceEBsinOntariocommand27.4%-alowerratecomparedto47.4%ofearly-stage,consumer-orientedservicestart-ups.Thisrelativelylargedropintherateofentrepreneurshipamongconsumer-orientedserviceinitiatives,fromthestart-upstagecomparedtotheestablishedstage,mayreflectthedifficultyofsmallservice-orientedventurestosurviveovertime.Inotherwords,theincreaseinthebusiness-orientedservicesshareanddecreaseintheconsumer-orientedservicesshareintheEBpopulationcomparedtotheTEApopulationsuggestshighersurvivalratesinbusiness-orientedservices.



26

TheshareofOntarioEBsintheextractivesector(8.1%)indicatesanincreasecomparedtotheearly-stage(TEA)shareof6.3%.AmongEBs,OntarioandCanadashowsimilarratesintheextractivesector.RespondentsarecodedaccordingtotheInternationalStandardIndustrialCodes(ISIC)andthenassignedtotheabovediscussedfoursectors.Inordertorefinethesectordescriptionandanalysis,weusedtheonedigitISICcodes.Thiscreated11sectorsfortheOntariodata.Toachieveasufficientnumberofrespondentsineachsector,datafromthreeconsecutiveyears(2013,2014and2015)wasaggregated,creatingasampleof254entrepreneurs’responses.

Figure10illustratestheshareofeachofthe11sectors.Theextractivesectorsofagriculture,forestryandfishing(6%)togetherwithminingandconstruction(9%)indicateatotalshareof15%fortheextractivesector.Manufacturinghasashareof6%andtransportation,storageandwholesaleformasmallcategorywithashareof1%.However,retail,hotelsandrestaurantsaccountforthelargestsector,contributingtoconsumerserviceswithashareofmorethanaquarter(26%)ofthetotalsampleofenterprises.Otherpersonalandconsumerservicesformashareof7%.Financialintermediationandrealestate(9%)withprofessionalservices(14%)andadministrativebusinesses(5%)formasignificantpartofbusinessservices.Informationandcommunicationform8%oftheenterprisesandcombinebothconsumerandbusinessservices.AcategorythatprobablyneedstobebetterdefinedinthefouraggregatedGEMsectorsisrelatedtoenterprisesworkingforgovernment,health,educationandsocialservices(9%)whicharegenerallyknownassocialorthirdsectorenterprises.



27

Figure 10: Ontario’s entrepreneurs by sector - Division by 1D ISIC Code Sector (2013-2015)

INNOVATIONInnovationinvolvesthedeliveryofvalue-addednewnesstothemarket.GEMassessesinnovationonthreedimensions:

• Theuseofnewtechnologies.

• Theextenttowhichproductsorservicesareofferedby competitors.

• Thedegreetowhichtheproductsorservicesofferedarenewto markets.

Figures11and12illustratetheuseofnewtechnology,levelofcompetitionandnewnessoftheproductorservicetocustomersinOntarioandinthereferencegroups.


2015+2014+2013 TEA x Sector

Personal and Consumer Services 7%

Government, Health, Education, Social Services 9%

Administrative Services 5%

Professional Services 14%

Financial Institutions, Real Estate 9%

Information, Communications 8%

Wholesale, Retail, Hotel, etc. 26%

Utilities, Transportation, Storage 1%

Manufacturing 6%

Mining, Construction 9%

Agriculture, Forestry, Fishing 6%

Agriculture, Forestry, Fishing Mining, ConstructionManufacturing Utilities, Transportation, StorageWholesale, Retail, Hotel, etc. Information, CommunicationsFinancial Institutions, Real Estate Professional ServicesAdministrative Services Government, Health, Education, Social ServicesPersonal and Consumer Services

2015+2014+2013 TEA x Sector


Government, Health, Education, Social Services 9%



Financial Institutions, Real Estate 9%

Information, Communications 8%

Wholesale, Retail, Hotel, etc. 26%


Manufacturing 6%



Agriculture, Forestry, Fishing Mining, ConstructionManufacturing Utilities, Transportation, StorageWholesale, Retail, Hotel, etc. Information, CommunicationsFinancial Institutions, Real Estate Professional ServicesAdministrative Services Government, Health, Education, Social ServicesPersonal and Consumer Services


28

Figure11indicatesthatOntarioTEAventuresshowthehighestscoreswithregardtotheuseoftheverylatesttechnologies(12%)andnewtechnologiesavailableinthelastfiveyears(21%)comparedtotheUSandAustralia.Canada(12.5%)iscomparabletoOntario.

Figure 11: Use of advanced technology in Ontario and reference economies

Ontheotherhand,Figure12indicatesthatGermany(49.3%),Australia(46.5%),theUS(43.8%),andCanada(43.2%)showhigherTEAperformancethanOntario(40%)intermsofbusinessesofferingrelativelyuniqueandinnovativeproducts.Ontario(15%)isrankedsecondinintroducingproductsnewtoallcustomersafterCanada(18%)andfifthinintroducingproductnewtosomecustomers,followingCanada(39.3%),Germany(35.2%),Australia(35%)andtheUS(32.8%).

Inotherwords,therelativelyextensiveuseofnewtechnologiesinOntariodoesnotnecessarilytranslateintodeliveryofuniqueproductsandservicestoconsumers.

Insummary,thehighrateofnewtechnologyutilizationinOntarioislikelyareflectionoftheprovince’sdevelopedhigh-techindustryanditssubstantialknowledgegenerationcapabilities.


InnovTEA

0.00

0.23

0.45

0.68

0.90


TEA: Uses new tech

(1 to 5 yrs)

TEA: Uses no new tech

TEA: Uses very latest tech

(only available since last year)

InnovTEA

0.00

0.23

0.45

0.68

0.90


TEA: Uses new tech

(1 to 5 yrs)

TEA: Uses no new tech

TEA: Uses very latest tech

(only available since last year)


29

Theprovince’slowerperformanceinproductinnovationsuggestsaweaknessinbusinessinnovationandcommercializationofnewtechnologies.

Figure 12: Introducing new products to the market in Ontario and reference economies

InOntario’sestablishedbusinesses(EBs),ratesofuseofadvancedtechnologyandoffersofnewproductsarecomparabletoCanada’s.Figure13indicatesthatOntario’srateofEBsthatusetheverylatesttechnologyismarginallylower(1.6%)comparedtoCanada’s(2.3%).Approximately5%ofOntarioEBsusenewtechnology,lessthanCanadaEBs(7.6%).

Only1.6%ofOntarioEBssellproductsthatnootherbusinessoffersand28.6%sellproductsthatfewbusinessesoffercomparedto37%inCanada.Approximately31%ofEBssellproductsthatarecompletelynewornewtosomecustomersinOntarioandinCanada.Conversely,nearly70%ofEBssellproductsthatarenewtonocustomers.


InnovTEA

0.0%

22.5%

45.0%

67.5%

90.0%


TEA: Many businesses offer same

product

TEA: Few businesses

offer the same product

TEA: No businesses


TEA: Product new to some

customers

TEA: Product new to all customers

TEA: Product new to no customers

InnovTEA

0.0%

22.5%

45.0%

67.5%

90.0%


TEA: Many businesses offer same

product

TEA: Few businesses


TEA: No businesses


TEA: Product new to some

customers

TEA: Product new to all customers

TEA: Product new to no customers


30

Figure 13: Innovation among established businesses (EBs) in Ontario and Canada

ASPIRATIONSEconomicgrowthisaffectedbytheextentandnatureofentrepreneurialactivity.Thetypeofbusinessesgeneratedwillimpacttheeconomy’sstructureanddevelopment.Whetheranindividualexpectstocreateasmallorlargenumberofjobs,whethertheproductormarketdevelopedisnew,orwhetherthesourceofrevenuesisfromexportorfromalocalmarketwillaffecttheeconomy’sgrowth.Figures14and15andTable2illustratethethreetypesofmeasurescreatedby

FINDINGS - ADULT POPULATION SURVEYInnovTEAxEB

0.0% 25.0% 50.0% 75.0% 100.0%

ON CA

EB: Uses very latest tech (only available since last year)

EB: Uses new technology (1 to 5 yrs)

EB: Few businesses offer the same product

EB: Many businesses offer same product

EB: Uses no new tech

EB: No businesses offer the same product

EB: Product new to all customers

EB: Product new to some customers

EB: Product new to no customers


31

GEMtodistinguishbetweenentrepreneursaccordingtotheirgrowthexpectations:

• Jobcreation • Innovativeness–asreflectedincreatingnewproductandmarket combinations • Export

Theresultsareforearly-stageentrepreneurs:nascentandnewbusinessowners.

Figure 14: Job creation aspirations in Ontario and reference economies

Figure14showsthatearly-stageentrepreneurs’jobexpectationsinOntariovaryacrosstheexaminedaspirationsmetrics.Figure14indicatesthatOntario(10.7%)iscomparabletoCanada,theUSandAustraliainexpectingtocreateanyjobswithinfiveyearsaswellasinexpectationstocreatemorethan19jobsin5years(2.3%).Amongearly-stageentrepreneurs,ratesofhighjobcreationexpectations(creatingmorethan10jobsandover50%growthin5years)inOntarioareslightlyhigher(21%)thaninCanada(19.5%)butlowerthanintheUS(25.3%)andAustralia(24.2%).

ThisimpliesrelativelymodestjobcreationaspirationsinOntario,comparedwithsimilareconomiessuchastheUSandAustralia.Ontarianentrepreneursarerelativelyhesitanttopursuehigh-growth


AspirTEA

0.0%

7.5%

15.0%

22.5%

30.0%


% 18-64: TEA and reports any

jobs now or in 5 yrs

% 18-64: TEA and expects more than

19 jobs in 5 yrs

TEA: High job expectation (10+

jobs and over 50% in 5 yrs)

AspirTEA

0.0%

7.5%

15.0%

22.5%

30.0%


% 18-64: TEA and reports any

jobs now or in 5 yrs

% 18-64: TEA and expects more than

19 jobs in 5 yrs

TEA: High job expectation (10+

jobs and over 50% in 5 yrs)


32

orscale-upactivitiestofurtherexpandtheirbusinessesandmaypreferatypeofbusinesssuitableforlifestyleaspirations.

Table 2: New product-market combination in Ontario and reference economies (TEA %)

Ontario Canada US Australia Germany Norway Israel G7 EU28 IDE

29.0 36.1 36.0 31.7 34.2 14.0 30.8 34.1 28.5 30.6

Table2revealsthatonly29%ofOntariansindicateaspirationsofinnovationinproduct-marketcombinationsimilartoIDEs(30.6%)butsubstantiallyfewerthaninCanada(2.9%),theUS(36%)andAustralia(34.1%).

Figure15illustratesthatOntariostart-upsleadthereferencegroupwith32.6%indicatinghavingmorethan25%oftheirexportrevenuesfromoutsidethecountry,despitelaggingbehindinthe“lessthan25%”category.Thisgivessomeindicationtothecomparativelystrongerexport-orientednatureofOntarianentrepreneurs,andtheircapabilityinreachingforeignmarkets.

ExportactivityamongOntariostart-upsmayindicatebusinessstrengthbasedonhighcompetitivenessintermsofattractivepricesaswellqualityandvalue-addedproductsandservicesintheglobalmarket.Exportactivityplaysanimportantroleineconomicdevelopmentandgrowth,jobcreationandimprovementofthebalanceofpayments.Thus,improvingconditionshinderingstart-ups’abilitytoinnovateandimprovingsupportforthemtobringnewproductstomarketwouldfurthercontributetoOntario’seconomy.

Figure 15: Export aspirations in Ontario and reference economies


AspirTEA

0.0%

22.5%

45.0%

67.5%

90.0%


TEA: No revenue from outside country

TEA: 1-25% of revenue from outside

country


country


country


33

Figure 16: Aspirations among established businesses (EBs) in Ontario and Canada

Acomparisonofentrepreneurs’aspirationamongEBsinOntarioandCanada(Figure16)suggeststhatbroadly,theexpectationofjobcreationinfiveyearsissimilar.Onlyabout7%ofentrepreneursrunningEBsexpecttocreate10ormorejobsandgrowover50%inthenextfiveyears.

Greaterdifferencesexistinotheraspirationmetrics.Only11.1%ofOntarioEBsindicatesinnovationofnewproduct-marketcombination,comparedto13.5%ofEBsinCanada.InOntario,62.9%ofEBsgeneratesubstantiallylessrevenuesfromoutsidethecountrycomparedtoapproximately70%inCanada.

INTRAPRENEURSHIP In2015,GEMexaminedentrepreneurialactivitywithinexistingorganizationsbyemployees,whichisrepresentedbytheEntrepreneurialEmployeeActivity(EEA)index.

Nearly11%ofOntarianswereinvolvedinentrepreneurshipwithinorganizations(intrapreneurship)asleadersinthepastthreeyears,slightlymorethanintrapreneurshipratesinCanada(10.1%),theUS


Figure 16: Aspirations among established businesses (EB) in Ontario and CanadaAspirTEAxEB

% 18-64: EB and reports any jobs now or in 5 yrs

% 18-64: EB and expects more than 19 jobs in 5 yrs

EB: High job expectation (10+ jobs and over 50% in 5 yrs)

EB: New product market combination (customer competition)

EB: No revenue from outside country

EB: 1-25% of revenue from outside country



0.0% 17.5% 35.0% 52.5% 70.0%

ON CA


34

(10.2%)andIsrael(10%)andmorethaninIDEs(8%).AustraliaandNorwayindicatethehighestratesofintrapreneurialactivityamongthereferencegroup(12.4%and12.1%respectively).

Atthesametime,asillustratedinFigure17,only7%ofOntariansindicateacurrentinvolvementinintrapreneurship,alowerratecomparedtothereferencegroupofcountriesCanada(7.4%),theUS(8%)Australia(9%)andNorway(9.7%).

Figure 17: Rates of intrapreneurship in Ontario and reference economies

ENTREPRENEURSHIP DEMOGRAPHIC IN ONTARIOAGEGEMstudiesagebydividingadultsintheworkingagesintofiveagegroupranges:

18-24;25-34;34-44;45-54;55-64years.


Intrapreneurship

0.00

3.25

6.50

9.75

13.00

ONCAUSAUG7G20EU28IDEGermanyIsraelNorway

% 18-64 employed: involved in intrapreneurship - leading role -

active in past 3 years


active now

Intrapreneurship

0.00

3.25

6.50

9.75

13.00

ONCAUSAUG7G20EU28IDEGermanyIsraelNorway


active in past 3 years


active now


35

Figure 18: Participation in entrepreneurial activity by age in Ontario and reference economies

Figure18indicatesthatOntarioandCanadaexhibitthehighestratesofentrepreneurialactivityinallagecohorts.Ontariansshowthehighestparticipationrateinentrepreneurshipwithinthe35-44(16.9%)and45-55(16.5%)agecohorts,comparedtothereferencegroup.Amongtheagecohortof18-24,Canada(18.2%)andOntario(15.9%)leadwiththehighestentrepreneurialrates.7.5%ofOntariansintheagegroupof55-65arealsoinvolvedinentrepreneurialactivity,rankingOntariosecondafterCanada(9.5%)andcomparabletotheUS(7.4%)inthisagegroup.Ontarioisalsorankedsecond(15.2%)afterCanada(16.6%)inentrepreneurialactivityintheagecohortof25-34.

Figure 19: Participation in entrepreneurial activity by age among established businesses (EBs) in Ontario and reference economies

FINDINGS - ADULT POPULATION SURVEY New Age TEAxEB

0.00%

5.00%

10.00%

15.00%

20.00%

TEA: Age 18-24 TEA: Age 25-34 TEA: Age 35-44 TEA: Age 45-54 TEA: Age 55-64


New Age TEAxEB

0.00%

4.50%

9.00%

13.50%

18.00%

EB: Age 18-24 EB: Age 25-34 EB: Age 35-44 EB: Age 45-54 EB: Age 55-64



36

Figure19showsthatinthe45-54agegroup,Ontario’sparticipationrateinentrepreneurshipamongEBs(16.4%)isthehighestamongreferencegroupsincludingCanada(15.4%),Australia(13.2%)andtheUS(12%).OntariansalsoshowthehighestrateofleadingormanaginganEB(6.3%)intheagegroupof25-34,comparedtoothereconomies.Ontheotherhand,attheagecohortsof35-44and55-64,Australiahasthehighestparticipationlevel(9.6%and16.1%respectively).Intheseagegroups,Ontario’sparticipationinEBentrepreneurshipisrankedthird,withslightlylowerparticipationrates(7.1%and10.1%respectively)thanCanada(7.4%and11.4%respectively).Nearly1%ofOntarianswereinvolvedinEBentrepreneurialactivityintheagegroupof18-24,whichiscomparabletoCanadaandtheUS(1.1%).

EDUCATIONFigure20indicatesthatthehighertheeducationlevel,thehighertheinvolvementofOntariansinearly-stageentrepreneurialactivities.TEAinOntarioisthehighestamongthosewithgraduateexperience(17.6%);however,itislessthanCanada(19.6%).TheOntarioTEArateamongentrepreneurswithsomesecondaryeducationislower(10.4%)thaninCanada(13.6%).

Figure 20: Entrepreneurial activity by education level in Ontario and reference economies


EduTEAxEB

0.0% 5.0% 10.0% 15.0% 20.0%


% 18-64 pop: Some secondary education: % involved in TEA

% 18-64 pop: Secondary degree: % involved in TEA

% 18-64 pop: Post-secondary degree: % involved in TEA

% 18-64 pop: Graduate experience: % involved in TEA

EduTEAxEB

0.0% 5.0% 10.0% 15.0% 20.0%


% 18-64 pop: Some secondary education: % involved in TEA

% 18-64 pop: Secondary degree: % involved in TEA

% 18-64 pop: Post-secondary degree: % involved in TEA

% 18-64 pop: Graduate experience: % involved in TEA


37

ThesamepatternisshownamongEBsasshowninFigure21,demonstratingthattheOntariorateisloweramongindividualswithsomesecondaryeducation(4.5%)andgraduateexperience(12.8%)thaninCanada(6%and13.8%respectively).

Figure 21: Entrepreneurial activity among established businesses (EBs) by education level in Ontario and reference economies

GENDER AND ENTREPRENEURSHIPInOntario,15%ofmalesand13.8%offemalesbetween18and64areengagedinearly-stageentrepreneurialactivities,indicatingaratioof1:0.92,comparedto1:0.84inCanada.Thismeansthatin2015inOntario,forevery100maleentrepreneurs,therewere92womenentrepreneurs.TherateoffemaleentrepreneursinOntario(13.8%)isslightlyhigherthanthatofCanada(13.5%).TherateofmaleentrepreneursinOntario(15%)isslightlylowerthanthatofCanada(16%),asshowninFigure22.


EduTEAxEB

% 18-64 pop: Some secondary education: % involved in EB

% 18-64 pop: Secondary degree: % involved in EB

% 18-64 pop: Post-secondary degree: % involved in EB

% 18-64 pop: Graduate experience: % involved in EB

0.0% 3.5% 7.0% 10.5% 14.0%

ON CA US AUG7 G20 EU28 IDE


Figure 22: Entrepreneurial activity by gender in Ontario and Canada

GENDER AND ATTITUDESFigure23illustratesattitudestowardsentrepreneurshipamongmalesandfemalesinOntario,CanadaandtheUS.InOntario,asinCanadaandtheUS,femalesaresomewhatlesslikelytohaveanacquaintancewhoisanentrepreneur(30.5%)thanmales(32%).Ontariofemalesare,however,morelikelytoseeentrepreneurialopportunities(54%)thanmalesinOntario(52%)aswellasinCanada(51.7%)andtheUS(43.5%).

Females(41.3%)aremuchmorelikelytoreportalowerlevelofskillsandknowledgetorunabusinessthanmales(61%)inOntario.OntarianmalesindicateahigherrateofcapabilitiesthanmalesinCanada(57.4%),butslightlylowerthanUSmales(62.2%).Ontarianfemales’perceptionsoftheirentrepreneurialcapabilities(41.3%)islowerthanamongfemalesinCanada(43.2%)andtheUS(49.5%).

Significantly,morethanhalf(52.4%)ofOntarianfemalesstatedthatfearoffailurewouldpreventthemfromstartingabusiness.ThisisthehighestrateamongOntarianmales(40.7%),Canadianfemales(47%)andUSfemales(34.5%).Thisfindingisworthnoting,givenOntarianfemales’highratesofopportunityrecognitionandconfidenceintheirentrepreneurialcapabilities.


38

Gender Activity TEA

12.0%

13.3%

14.5%

15.8%

17.0%

ONCA

TEA15 : % 18:64: Setting up firm or

owner of young firm (SU or BB)

TEA15mal : % 18:64 male: Setting up firm or owner of young firm (SU or BB)

TEA15fem : % 18:64 female: Setting up firm or owner of

young firm (SU or BB)

Gender Activity TEA

12.0%

13.3%

14.5%

15.8%

17.0%

ONCA

TEA15 : % 18:64: Setting up firm or

owner of young firm (SU or BB)

TEA15mal : % 18:64 male: Setting up firm or owner of young firm (SU or BB)

TEA15fem : % 18:64 female: Setting up firm or owner of

young firm (SU or BB)


39

Figure 23: General public attitudes towards entrepreneurship by gender in Ontario and Canada

GENDER AND MOTIVEFigures24and25exhibitmales’andfemales’opportunityandnecessitymotivesinOntarioandreferenceeconomies.

Figure 24: Opportunity motive of males and females in Ontario and reference economies

FINDINGS - ADULT POPULATION SURVEY Gender Attitudes

Male: knows someone who started a business in the past 2 yrs

Female: Knows someone who started a business in the past 2 yrs

Male: Has required knowledge/skills to start a business

Female: Has required knowledge/skills to start a business

Male: Fear of failure would prevent starting a business

Female: Fear of failure would prevent starting a business

0.0% 17.5% 35.0% 52.5% 70.0%

ON CA US

Female: Good conditions to start a business in the next 6 months in the area where I live

Male: Good conditions to start a business in the next six months in the area where I live

Gender Motive TEAxEB

0.0%

3.5%

7.0%

10.5%

14.0%

ON CAUS AUDE NOIL G7G20 EU28IDE

% 18-64 pop: TEA and opportunity

motive

Male: TEA and opportunity motive

Female: TEA and opportunity motive


0.0%

3.5%

7.0%

10.5%

14.0%


% 18-64 pop: TEA and opportunity

motive

Male: TEA and opportunity motive

Female: TEA and opportunity motive


40

Figure 25: Necessity motive of males and females in Ontario and reference economies

In2015,theopportunitymotiveamongfemaleearly-stageentrepreneursinOntario(12.1%)washigherthanintheUS(7.1%),Australia(8.3%)andslightlyhigherthantheopportunitymotiverateamongCanadianfemales(11.4%)andOntarianmaleentrepreneurs(11.5%).

MaleentrepreneursinOntarioweresomewhatlesslikelythanCanadianentrepreneurstobemotivatedbyopportunities(Figure24).Ontheotherhand,therateofnecessity-motivatedentrepreneurshipamongmalesandfemalesinOntariowascomparabletotheCanadianrateofnecessity-motivatedmaleandfemaleentrepreneurship(Figure25).

GENDER AND SECTORSGiventherelativelyhighlevelofwomenentrepreneurs’participationinOntario’seconomy,anexaminationofgenderrepresentationinsectorswasconductedusingtheISICcodes.Sectoraldistributionofearly-stageventuresformalesandfemaleswascalculated,basedonanaggregationofanswersover2013through2015.Thisprovidesalargersampleof254entrepreneurrespondentsofwhich150weremalesand104females,permittingamoredetaileddescriptionofentrepreneurialactivity at the sectoral level.

FINDINGS - ADULT POPULATION SURVEYGender Motive TEAxEB

0.0%

0.8%

1.5%

2.3%

3.0%


% 18-64 pop: TEA and necessity motive

Male: TEA and necessity motive

Female: TEA and necessity motive


0.0%

0.8%

1.5%

2.3%

3.0%


% 18-64 pop: TEA and necessity motive

Male: TEA and necessity motive

Female: TEA and necessity motive


41

Figures26and27illustratethesectoraldistributionofearly-stageventuresforOntarianmalesandfemalesamongthe11sectors.

Figure 26: Ontario’s male entrepreneurs by sector – Division by 1D ISIC Code Sector (2013-2015)


Ontario's Men Entrepreneurs by Sector


Government, Health, Education, Social 7%



Financial Intermediaries. Real Estate 10%

Information and Communication 10%

Wholesale, Retail, Hotel etc. 23%

Manufacturing 7%



Agriculture, Forestry, Fishing Mining, ConstructionManufacturing Utilities, Transportation, StorageWholesale, Retail, Hotel etc. Information and CommunicationFinancial Intermediaries. Real Estate Professional ServicesAdministrative Services Government, Health, Education, Social Personal and Consumer Services

Utilities, Transporation,Storage

1%


42

Figure 27: Ontario’s female entrepreneurs by sector- Division by 1D ISIC Code Sector (2013-2015)

Overall,Ontarianmales’shareintheextractivesectorsofagriculture,forestryandfishing(5%),togetherwithminingandconstruction(13%),ishigherthanthefemales’share(8%and3%respectively).Ontarianmales’shareinmanufacturing(7%)isalsohigherthanOntarianfemales’(5%).Bothmalesandfemalesformasmallshareintransportation,storageandutilitiescategoryof1%.Malesinfinancialintermediationandrealestate(10%),administrativebusinesses(8%)andinformationandcommunication(10%)formasignificantpartofbusinessservicesandanoveralllargershareofenterprisescomparedtofemalesinthesesectors.However,wholesale,retailandaccommodationsformthelargestsectoramongbothgenders,


Ontario's Women Entrepreneurs by Sector


Government, Health, Education, Social 11%



Financial Intermediaries. Real Estate 8%

Information and Communication 5%

Wholesale, Retail, Hotel etc. 31%


Manufacturing 5%



Agriculture, Forestry, Fishing Mining, ConstructionManufacturing Utilities, Transportation, StorageWholesale, Retail, Hotel etc. Information and CommunicationFinancial Intermediaries. Real Estate Professional ServicesAdministrative Services Government, Health, Education, Social Personal and Consumer Services


43

accountingforalmostonethird(31%)ofthefemaleenterprises,comparedtolessthanaquarter(23%)ofOntarianmaleenterprises.Otherpersonalandconsumerservicesformashareof11%offemales’enterprisesversus4%ofmales’enterprises.Also,theprofessionalservicescategoryinthefemalesampleislarger(16%)thanthatofmales(12%),asisthefemaleshareofenterprisesworkingforgovernment,health,educationandsocialservices(11%)versusthatofmales(7%).

Overall,femaleentrepreneursshowhigherrepresentationinservice-orientedventuresincludingsocialandprofessionalservicesandwholesaleandhospitalityventures,whileOntarianmalesshowhigherrepresentationinmanufacturing,informationandcommunicationandextractive-orientedsectors.

SOCIAL CLASS AND ENTREPRENEURSHIP OntarioTEAreachesitshighestlevelsinthelowestaswellasthehighestsocialclasses(16%)asmeasuredinincometertiles(Figure28)–lowest,middleandhighestsocialclass(asdefinedbyhouseholdincome).Inbothcases,itsvaluesarehigherthantheCanadianandotherreferencegroups’TEArates.Inthemiddleclass,theOntarioTEArate(13.3%)islowerthaninCanada(15.3%)andAustralia(15.6%).

Ontario’shighestsocialclasshasthehighestrateofparticipationinEBs(14%).Thismightindicatetheabilityofentrepreneursinhighersocialclassestoovercometheearly-stagechallengesbetterthanentrepreneursinlowerincomegroups.Asimilarpatternexistsamongothereconomiesinthereferencegroup.



44

Figure 28: Socioeconomic status (SES) or income tertiles among early-stage and established businesses (EBs) in

Ontario and reference economies

EXITApproximately3%ofOntarianentrepreneursindicatedexitingabusinessinthepastyearandclosingit,while2.7%indicatedexitingabusinessthatremainsinoperation.ThispatterniscomparabletothatseeninCanadaandinreferencegroupofcountries.


SES TEAxEB

TEA: Lowest 33% SES

TEA: Middle 33% SES

TEA: Highest 33% SES

EB: Lowest 33% SES

EB: Middle 33% SES

EB: Highest 33% SES

0.0% 4.5% 9.0% 13.5% 18.0%

ON CA US AU DE NO IL G7G20 EU28 IDE


45

AsFigure29illustrates,amongthemainreasonsforexitingabusinessinOntarioarelackofprofitability(20.6%ofallexits),familyorpersonalreasons(17.6%),opportunitytosell(14.7%)andanotherjoborbusinessopportunity(11.8%).

Figure 29: Exit reasons among early-stage entrepreneurs in Ontario and reference economies


0%

10%

20%

30%

40%


Opportunity to sellBusiness not profitableProblems getting financeAnother job or business opportunityExit was planned in advanceRetirementFamily or personal reasonsGovernment/tax policy/ bureaucracy

0%

10%

20%

30%

40%


Opportunity to sellBusiness not profitableProblems getting financeAnother job or business opportunityExit was planned in advanceRetirementFamily or personal reasonsGovernment/tax policy/ bureaucracy


46

GEM2015complementsthesurveyofadultpopulationwithexperts’assessmentsofninesocio-economicfactorsinthe62participatingeconomies.TheninefactorsarebasedonframeworkconditionsoutlinedbytheWorldEconomicForum(WEF)andhavebeenusedbyGEMtoexaminetheentrepreneurialclimateandecosysteminwhichventuringtakesplace.

Theexpertsarefromvariousprofessionalbackgroundsandallhaveaconnectiontoentrepreneurship.Thefollowingresultsindicatethe36experts’assessmentsonhowfavourableconditionsinOntarioarebyratingstatementsonanine-pointLikertscale.ThesestatementswereusedintheNationalExpertSurvey(NES)globalGEMstudy,indicatingdifferentlevelsofagreement:1–completelyfalse;2–false;3–moderatelyfalse;4–somewhatfalse;5–neitherfalsenortrue;6–somewhattrue;7–moderatelytrue;8–true;9–completelytrue. • Availabilityoffinance • Governmentpolicies • Governmententrepreneurshipprograms • Entrepreneurshipeducation • ResearchandDevelopment(R&D)transfer • Commercialandservicesinfrastructure • Marketdynamicsandopenness • Physicalinfrastructure • Culturalandsocialnorms

Inaccordancewiththe2015GEMCanadareport,meanscoresforeachstatementarepresented.Meanscoresabovetherankingof5indicateapartialagreementwiththestatementonthecondition’sfavourabilitytoentrepreneurship.Ontheotherhand,modeidentifiesthescoregivenmostfrequentlybytheexperts.(Sources: 2015 GEM Canada Report; GEM 2015/16 Global Report.)

AVAILABILITY OF FINANCEFigure30showsassessmentofthesufficiencyofsixtypesoffinancialsourcesthatareconsideredimportantforOntarioentrepreneurs’needs:privatelenders,InitialPublicOfferings(IPOs),venturecapitalists(VCs),businessangels,informalinvestors(family,friends

ENTREPRENEURIAL FRAMEWORK CONDITIONS (PROVINCIAL EXPERTS SURVEY - PES)


47

andcolleagues),governmentsubsidies,debtfundingandequity.Privatelenders’fundingandgovernmentalsubsidiesappeartobeinadequate,comparedtotheothersourcesavailableforOntarioentrepreneurs.VCsandbusinessangelsarefoundtobethemostadequatesources,followedbyinformalindividualsandIPOs.

Figure 30: Experts’ evaluation of availability of finance to entrepreneurs in Ontario

GOVERNMENT POLICIESAmongthegovernmentalpoliciesunderconsideration,expertsconsideredOntario’spoliciesregardingtaxes,governmentregulationsandlicencesasconsistentandrelativelypredictable.Similarly,theamountoftaxesisnotconsideredaburden.Ontheotherhand,supportforneworgrowingfirmsinthelocalandnationalgovernmentlevelsisconsideredtheleastadequate.Expertsalsoindicatetheinsufficiencyofpublicprocurementfornewfirms(Figure31).

0 2 4 6 8

Mean Mode

In Ontario, there is sufficient funding available through private lenders' funding (crowdfunding) available for new and growing firms

In Ontario, there is sufficient funding available through initial public offerings (IPOs) for new and growing firms

In Ontario, there is sufficient funding available from venture capitalists for new and growing firms

In Ontario, there is sufficient funding available from professional Business Angels for new and growing firms

In Ontario, there is sufficient funding available from informal investors (family, friends and colleagues) who are private individuals (other than

founders) for new and growing firms

In Ontario, there are sufficient government subsidies available for new and growing firms

In Ontario, there is sufficient debt funding available for new and growing firms

In Ontario, there is sufficient equity funding available for new and growing firms

30

ENTREPRENEURIAL FRAMEWORK CONDITIONS

(PROVINCIAL EXPERTS SURVEY - PES)


48

Figure 31: Experts’ assessment of adequacy of government policies in Ontario in support of entrepreneurship

GOVERNMENT PROGRAMSExperts’assessmentrevealsadequateprogrampersonnelworkingforgovernmentagenciesforsupportingentrepreneurs.HigheffectivenessisalsoattributedtoscienceparksandbusinessincubatorsthatsupportnewandgrowingfirmsinOntario.Alowerlevelofexperts’agreementisshownwithregardtotheavailabilityofgovernmentalassistanceprogramstoanyonewhoneedsthemandtotheabilitytoobtainawiderangeofassistancethroughcontactwithasingleagency.Insummary,althoughgovernmentalprogramsareconsideredeffectiveandprofessional,theyarenoteasilyobtainedbyeveryonewhoneedsthemandtheyarenotavailableasa“one-stop”service(Figure32).


0 2 5 7 9

mean mode

In Ontario, coping with government bureaucracy, regulations, and licensing requirements it is not unduly difficult for new and growing firms

In Ontario, taxes and other government regulations are applied to new and growing firms in a predictable and consistent way

In Ontario, the amount of taxes is NOT a burden for new and growing firms

In Ontario, new firms can get most of the required permits and licenses in about a week

In Ontario, the support for new and growing firms is a high priority for policy at the local government level

In Ontario, the support for new and growing firms is a high priority for policy at the national government level

In Ontario, Government policies (e g , public procurement) consistently favor new firms

31


49

Figure 32: Experts’ assessment of government policies for entrepreneurship in Ontario

ENTREPRENEURSHIP EDUCATION EntrepreneurshipeducationinOntarioisconsideredfavourableinthepost-secondaryeducationlevel(e.g.colleges,universitiesandcontinuingeducationsystems).Itisconsideredmuchweakerinprimaryandsecondaryeducationlevels,althoughteachingattheselevelsdoesinvolvecreativity,self-sufficiencyandencouragestakinginitiative(Figure33).Thesepatternsaresimilartoexperts’assessmentin2014.

Figure 33: Experts’ assessment of entrepreneurship education in Ontario



0 2 5 7 9

mean mode

In Ontario, Government programs aimed at supporting new and growing firms are effective

In Ontario, almost anyone who needs help from a government program for a new or growing business can find what they need

In Ontario, the people working for government agencies are competent and effective in supporting new and growing firms

In Ontario, there are an adequate number of government programs for new and growing businesses

In Ontario, science parks and business incubators provide effective support for new and growing firms

In Ontario, a wide range of government assistance for new and growing firms can be obtained through contact with a single agency

32

In Ontario, the vocational, professional, and continuing education systems provide good and adequate preparation for starting up and

growing new firms

In Ontario, the level of business and management education provide good and adequate preparation for starting up and growing new firms

In Ontario, Colleges and universities provide good and adequate preparation for starting up and growing new firms

In Ontario, teaching in primary and secondary education provides adequate attention to entrepreneurship and new firm creation

In Ontario, teaching in primary and secondary education provides adequate instruction in market economic principles

In Ontario, teaching in primary and secondary education encourages creativity, self-sufficiency, and personal initiative

0 2 5 7 9

mean mode

33


50

RESEARCH & DEVELOPMENT TRANSFERExpertsindicatefavorableconditionsforR&DtransferforscientistsandengineersinOntario.Atthesametime,theypointtobarriersincommercializationbymentioningthedifficultyfornewandgrowingfirmstoaccessandaffordthelatesttechnologies.ThelackofsufficientgovernmentalsupporttoacquirenewtechnologyalongwithinefficientprocessesoftransferringtechnologiesfromuniversitiestothemarketarefurtherweaknessesoftheOntarioR&Dcommercializationsystem.

ThisfindingcorroboratestheAPSresultsindicatingthewidespreaduseofnewtechnologiesontheonehandandthelowerabilitytoleveragethemtocommercializenewproductsontheother(Figure34).

Figure 34: Experts’ assessment of R&D transfer in Ontario

COMMERCIAL AND SERVICE INFRASTRACTUREExpertsindicatearelativelyaffordablecommercialinfrastructureforsupportingnewfirms’growthinOntario.Thisincludesfinancialandlegalservicesaswellassub-contractorsandconsultancyservices(Figure35).


In Ontario, there is good support available for engineers and scientists to have their ideas commercialized through new and growing firms

In Ontario, the science and technology base efficiently supports the creation of world-class new technology-based ventures in at least one area

In Ontario, there are adequate government subsidies for new and growing firms to acquire new technology

In Ontario, new and growing firms can afford the latest technology

In Ontario, new and growing firms have just as much access to new research and technology as large, established firms

In Ontario, new technology, science, and other knowledge are efficiently transferred from universities and public research centers to

new and growing firms

0 2 5 7 9

mean mode

34


51

Figure 35: Experts’ assessment of commercial infrastructure in Ontario

MARKET OPENNESSExpertsconsiderthatconsumerandbusinessmarketsinOntarioarerelativelystable.However,althoughgrowingfirmscaneasilypenetratenewmarketsandaffordthecostsinvolvedwithit,expertsindicatesubstantialchallengesrelatedtobeingcompetitivelyblockedunfairlybyestablishedfirms(Figure36).

Figure 36: Experts’ assessment of market openness in Ontario



0 2 4 6 8

mean mode

In Ontario, it is easy for new and growing firms to get good banking services (checking accounts, foreign exchange transactions, letters of credit, and the like)

In Ontario, it is easy for new and growing firms to get good, professional legal and accounting services

In Ontario, it is easy for new and growing firms to get good subcontractors, suppliers, and consultants

In Ontario, new and growing firms can afford the cost of using subcontractors, suppliers, and consultants

In Ontario, there are enough subcontractors, suppliers, and consultants to support new and growing firms

Figure 35: Experts’ assessment of commercial infrastructure in Ontario

36

0 2 5 7 9

mean mode

In Ontario, the anti-trust legislation is effective and well enforced

In Ontario, new and growing firms can enter markets without being unfairly blocked by established firms

In Ontario, the new and growing firms can afford the cost of market entry

In Ontario, new and growing firms can easily enter new markets

In Ontario, the markets for business-to-business goods and services change dramatically from year to year

In Ontario, the markets for consumer goods and services change dramatically from year to year


52

PHYSICAL INFRASTRUCTURE Ontario’sphysicalinfrastructureisconsideredstrong,easytoaccessandconsiderablyaffordabletonewandgrowingfirms.Itincludesbasicutilities(e.g.water,electricity,gas),communicationsaswellasadequatetransportationinfrastructure(Figure37).

Figure 37: Experts’ assessment of adequacy of commercial services in Ontario

CULTURAL AND SOCIAL NORMSAccordingtoexperts,Ontariohasanentrepreneurialcultureandnormsinsupportofnewandgrowingfirms’development.Ingeneral,Ontarians’favourableattitudestowardresponsibility,creativityandinnovativeness,andentrepreneurialrisk-takingareatthecoreofentrepreneurialculture(Figure38).

Figure 38: Experts’ assessment of entrepreneurial culture and norms in Ontario


0 1 2 3 4 5 6 7 8 9

mean mode

In Ontario, new or growing firms can get good access to utilities (gas, water, electricity, sewer) in about a month

In Ontario, new and growing firms can afford the cost of basic utilities (gas, water, electricity, sewer)

In Ontario, a new or growing firm can get good access to communications (telephone, internet, etc ) in about a week

In Ontario, it is not too expensive for a new or growing firm to get good access to communications (phone, Internet, etc )

In Ontario, the physical infrastructure (roads, utilities, communications, waste disposal) provides good support for new and growing firms

Figure 37: Experts’ assessment of adequacy of commercial services in

Ontario In Ontario, the culture emphasizes the responsibility that the individual

(rather than the collective) has in managing his or her own life

In Ontario, the culture encourages creativity and innovativeness

In Ontario, the culture encourages entrepreneurial risk-taking

In Ontario, the culture emphasizes self-sufficiency, autonomy, and personal initiative

In Ontario, the culture is highly supportive of individual success achieved through own personal efforts

0 2 5 7 9

mean mode

38


53

PERSPECTIVES ON THE BUSINESS SECTOR’S ROLE IN SOCIETYOntarianexpertsbelievethatbusinessesareabletodealmoreeffectivelywithsocialandenvironmentalissuesthangovernmentagencies.Thisis,inpart,duetothesubstantialinfluenceofconsumersonOntariobusinessesaimedtoaddresssocialandenvironmentalissues.Thisisalsoaccomplishedthroughmediachannelsandgovernmentalcampaignstosupportenvironmentandcommunitymatters,aswellasbysocialentrepreneursthatchallengeexistingregulationsthatmaynegativelyimpactgroupsinthesociety.Atthesametime,lackoffundsforsupportinggrowingfirmsthatcombineprofitwithpositivesocialandenvironmentalimpactisrecognized,aswellasthelowinvolvementofthebusinesssectorinprovidingbasicneedsofpeoplethatarenotaddressedbygovernmentorcivilsocietyorganizations(Figure39). Figure 39: Experts’ assessment of the business sector’s role in society



0 2 4 5 7

mean mode

In Ontario, there is a lot of media attention for new and growing firms that combine profits with positive social and environmental impact.

In Ontario, there are sufficient private and public funds available for new and growing firms that aim at solving social and environmental problems

In Ontario, consumers are putting pressure on businesses to address social and environmental needs

In Ontario, the government is able to bring together potential entrepreneurs, businesses and civil society organizations around specific social, environmental or

community projects.

In Ontario, entrepreneurs' associations/groups challenge existing regulations that negatively impact particular groups in society or the environment

In Ontario, social, environmental and community problems are generally solved more effectively by businesses than by the government and civil society organizations.

In Ontario, you will find many business that provide people with basic needs that are covered by governments and civil society organizations in other countries

In Ontario, people who live in poverty cannot rely on the government or civil society organizations

Figure 39: Experts’ assessment of the business sector's role in society


54

TheGEMmodelexaminesthemultiplephasesofbusinessinitiationfromitsveryearlystagesincludingtheentrepreneur’scharacteristics,motivationsandambitionsalongsidetheenvironmentcharacteristicsin which it evolves.

1. Thisyear,Ontarioachievedoneofhighestearly-stage entrepreneurshipparticipationrates(TEA)withinitspeer group,pullingaheadoftheUSandAustralia,despitestillbeing behindCanadaasawhole.ThisisauniquepositionforOntario, asitsentrepreneurshipparticipationratehasbeencomparable,if notbelow,theUSandAustraliainrecentyears.

2. Women’sparticipationinentrepreneurshipincreasedata strongratethisyear.Thisindicatorisoneofthekeydriversfor Ontario’sperformanceinentrepreneurshipparticipation. ComparedtoCanada,Ontariodisplayedahigherrateofwomen participatinginentrepreneurship.In2015inOntario,for every100maleentrepreneurs,therewere92female entrepreneurs,comparedwitharatioof1:0.84inCanada. InOntario,womenalsodisplayahigherrateofopportunity- drivenentrepreneurshipthanmen.Ontheotherhand,women entrepreneursstilldisplayalowersenseofconfidenceintheir entrepreneurialabilitiesandhaveahigherfearoffailure.Ontarian femalesalsodemonstratelowerentrepreneurialactivityin extractive,transformativeandbusiness-orientedventures, comparedtoOntarianmales.Findingsalsohighlightthe prominenceofOntariofemalesinservice-orientedbusinesses comparedtomales.

3. IntrapreneurshipinOntarioperformedwithmixedresults.The datashowsthattheparticipationinintrapreneurshipinOntario inthepastthreeyearscomparedwellwithotherpeereconomies. However,currentparticipationinintrapreneurshipinOntario lagsbehind,andisoutperformedbytheUSandAustralia. Thistrendmaybeindicativeofadecreasingparticipationin intrapreneurship,andshouldbenoticedbycorporatefirmsand otherventureswhoarestrivingtoincreaseinnovativenessthrough intrapreneurship.

CONCLUSIONS


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4. Thedatapointtoaninterestingcombinationofattitudestowards entrepreneurshipinOntario.Generally,Ontariansdisplaya healthysenseofconfidenceintheirentrepreneurialcapabilities, exceedingtheirpeersinreferenceeconomies.UnliketheUS, however,whichdisplaysasimilarhighlevelofconfidence, Ontarianspossessarelativelyhighleveloffearoffailure.Ontarian entrepreneursappeartopossessasubstantialamountofrisk aversion,whichmaybeasignificantbarriertofurthergrowthin entrepreneurialactivitiesintheprovince.

5. Thisyear,14.4%ofOntarianswereinvolvedinsetting-upor owningayoungfirm,asindicatedbytheTEArate.Yetonly9% wereinvolvedinrunninganincome-generatingbusinessaged morethan3.5years.Thisgapmaybeindicativeofasurvivalissue, inwhichentrepreneursfacedifficultiesinturningtheiryoung firmsintorevenue-generatingbusinessesthataresustainablein thelongterm.

6. Thereisasubstantialnumberofopportunity-driven entrepreneursinOntario,leadingotherpeereconomiesandon parwithCanada.Despitethat,Ontarianentrepreneursdonotsee incomeincreasesasakeymotivationforestablishingabusiness. Theyviewtheirbusinessesmoreasasourceofindependence, ratherthanasasourceoffinancialwealth.Thismayimply thatmanyOntarianentrepreneursaremoredrawnto“lifestyle entrepreneurship,”inwhichtheydonotaimtogroworscale- uptheirbusinesses.Ontheotherhand,thismayindicateacertain inabilityoftheOntarioeconomytosuitablyrewardentrepreneurs financiallyfortheirefforts.Thismaybeapotentialbarriertothe furtherimprovementoftheentrepreneurialecosysteminOntario.

CONCLUSIONS


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7. Ontariohasahighrateoftechnologyutilization,yetlow levelsofnovelproductsamongitsentrepreneurs.Thehigh rateoftechnologyutilizationinOntarioislikelyareflectionofthe province’sdevelopedhigh-techindustryanditssubstantial knowledgegenerationcapabilities.Theprovince’slaggard performanceinproductinnovationindicatesaweaknessinits abilitytocommercializenewtechnologiesandknowledge.Inother words,therelativelyextensiveuseofnewtechnologiesinOntario doesnotseemtotranslateintothecommercializinganddelivering ofuniqueproductsandservicestoconsumers.

8. Ontariodisplayedahighcapacityofexporting,withahigh proportionofOntarioentrepreneursearning25%to75%oftheir revenuefrommarketsabroad.ExportactivityamongOntario start-upsmayindicateahighlevelofbusinesscompetitiveness whichmaybeattributedtoattractivepricesaswellqualityin value-addedproductsandservices.Exportsplayanimportant roleineconomicgrowthandjobcreationinOntario,andserve asameasureforinnovativeactivitiesinitseconomy.Thus,efforts inimprovingconditionsforinnovativenessofstart-upsand supportingaccesstomarketwouldfurthercontributetoOntario economy.

CONCLUSIONS


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The2015GEMOntarioReportrevealssubstantialentrepreneurialactivityinOntariowhencomparedtootherdevelopedeconomiesaroundtheworld.Forthefirsttime,Ontario,togetherwithCanada,showsthehighestrateofearly-stageentrepreneurialactivityortotalearly-stageentrepreneurialactivity(TEA),comparedtodevelopedcountriesinthereferencegroup:theUS,Australia,Norway,GermanyandIsrael.Inpreviousyears,theUSheldfirstplaceinearly-stageentrepreneurialactivities.

Comparedtothereferencegroupofcountries,Ontarioshowsthehighestrateofrespondentswhoperceivegoodconditionstostartabusiness(53.2%ofadultrespondents).Ontariansreporthighlevelsofconfidence,comparablyhigherthanreferencecountries’rates,inhavingtheneededskillstoseizeopportunities(51.2%).Thisyear,over14%ofOntarianswereinvolvedinbusinessstart-ups.Overall,thedataillustratessomepositiveandencouraginggrowthinentrepreneurshipin Ontario.

TobuildonthepositivemomentumaroundentrepreneurshipinOntario,thereareopportunitiestocontinuetodevelopandenhancepublicassistanceprogramstosupportearly-stageentrepreneursandhelpbusinessesscaletosustainlong-termgrowth:

1. Mentoring Programs:Continuementoringandassistance programstofurtherdevelopentrepreneurs’strategicthinking, businesscapabilities,andabilitiestocopewithrisksand challengesrelatedtobusinessgrowthwithinrelevantindustries.

2. Women Entrepreneurship:Developstrategicvisionand programsinordertofurthertakeadvantageofwomen’sskills andopportunity-orientedperspectives.Inparticular,thereis anopportunitytotakestepstoenhanceandsupporttechnology andbusinesstrainingprogramstohelpwomenentersectors wheretheyarecurrentlyunder-represented.

3. Public Procurement:Strategicallyenhancepublicprogramsto turnnewandexistingtechnologiesintoproductsandsupport commercialization.

RECOMMENDATIONS


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4.R&D Transfer Channels:Extendpublicprogramsand encourageindustryinitiativesaimedatacquiringnewtechnologies fromuniversities,andimproveR&Dtransferprocesses. Specifically,theprocessofturningknowledgegeneratedin universitiesintocommerciallyviableproductsshouldbe streamlinedandenhanced.Thiswouldhelptodevelopthe knowledgeeconomy,andenhanceentrepreneurialactivity.

5. Access to Government Funding:Toimprove entrepreneurshipparticipation,accesstogovernmentalfunding shouldbeimproved.Emphasisshouldbeputonunderstanding andsupportingemergingentrepreneurs.Theseentrepreneurs canbepotentknowledgegeneratorsandinnovators,butperhaps lackconnectionsoraccesstoprofessionalinvestors.Alternately, theymightnotfitintotheirconventionalinvestmentcriteria. Public-privatepartnershipsinentrepreneurshipfundingmightbe establishedtofurtherstrengthenthecommitmentto entrepreneurialdevelopmentmadeatalllevelsofgovernment, andhelpentrepreneursmoreeffectivelytargetpublicfunds.

6.New Forms of Financing:Thereisanopportunitytoeducate andencourageentrepreneurstobetterutilizenewformsof financing,suchascrowdfunding.Newfundingchannels maypresentanewwayforentrepreneurswholackthereachand connectionstotraditionalfinancialsourcesandcapitalmarketsto gatherthenecessarycapital.

7. Entrepreneurship Education:Therelativelylowerlevelsof participationinentrepreneurshipamongOntarianswith secondaryeducationorlessmaybeasignalofinsufficient ambitiontochooseentrepreneurshipasacareerpath.Thereisan opportunitytoencouragetheeducationsystemsandschool boardstodevelopprogramsandencourageentrepreneurial behaviorandthinkinginprimaryandsecondaryschools.Such programscouldencouragebusinesscreationinitiatives, emphasizinginnovationandbusinessskillstraininginschoolsand withincommunities.

RECOMMENDATIONS


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8. Entrepreneurship Research:Thereisasignificant opportunitytoencourageamorein-depthunderstandingof entrepreneursandinnovativefirmsinOntario.Theopportunityto digdeeperintoentrepreneurialventuresandinnovationin Ontariowillallowresearchersandpolicy-makerstogainabetter understandingofthepossiblerequirementsforpolicy differentiationamongOntario’sregions.

RECOMMENDATIONS


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THECIS(TheCentreforInnovationStudies)isanotforprofitorganizationdevotedtothestudyandpromotionofinnovation.BasedinCalgary,Alberta,andincorporatedin2001,itoperatesthroughanetworkof35-40THECIS Fellows.

THECIS has three core functions–research,networkingandeducation. • Research.Creatingnewknowledgeandbuildinginsightsinto howtheinnovationsystemsfunctionsandpoliciesthatcan improveit. • Networking.Providingopportunitiesforexchangeofideas throughbreakfastmeetings,workshopsandconferences. • Education.DisseminationofinformationthroughNewsletters, eventsandotherinformaleducationactivities,particularlyfor graduatestudents.

FormoreinformationaboutTHECISgotowww.thecis.ca

The Centre for Innovation Studies (THECIS)#125, Alastair Ross Technology Centre355331StreetNWCalgary, Alberta, Canada T2L 2K7

ABOUT THECIS


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RyersonisCanada’sleaderininnovative,career-focusededucationandauniversityclearlyonthemove.Itisadistinctlyurbanuniversitywithafocusoninnovationandentrepreneurship.Ryersonhasamissiontoservesocietalneedandalong-standingcommitmenttoengagingitscommunity.

GuidedbyaboldAcademicPlan,anambitiousresearchagenda,andaMasterPlantorevitalizethecampusandsurroundingneighbourhood,Ryersonisthemostapplied-touniversityinOntariorelativetoavailablespaces,anditsreputationwithbusinessandcommunityleaderscontinuestorise.

Ryersonoffersmorethan100undergraduateandgraduateprograms.Culturallydiverseandinclusive,theuniversityishometo38,950students,including2,300master’sandPhDstudents,nearly2,700facultyandstaff,andmorethan170,000alumniworldwide.ResearchatRyersonisonatrajectoryofsuccessandgrowth:externallyfundedresearchhasdoubledinthepastfouryears.TheG.RaymondChangSchoolofContinuingEducationisCanada’sleadingproviderofuniversity-basedadulteducation.Theuniversity’sfocusoninnovationandentrepreneurshipisrepresentedmostdistinctlybytheDigitalMediaZone,aplaceforstudentstocollaborateandbringtheirdigitalideastothemarketplace.

FormoreinformationaboutRyersonUniversity,gotowww.ryerson.ca

ABOUT RYERSON UNIVERSITY


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TheBrookfieldInstituteforInnovation+Entrepreneurship(BII+E)isanew,independentandnonpartisaninstitute,housedwithinRyersonUniversitythatisdedicatedtomakingCanadathebestcountryintheworldtobeaninnovatororanentrepreneur.

BII+Esupportsthismissioninthreeways:insightfulresearchandanalysis;testing,pilotingandprototypingprojects;whichinformsBII+E’sleadershipandadvocacyonbehalfofinnovationandentrepreneurshipacrossthecountry.

FormoreinformationabouttheBrookfieldInstituteforInnovation+Entrepreneurship,pleasevisitwww.brookfieldinstitute.ca

ABOUT THE BROOKFIELD INSTITUTE FOR INNOVATION + ENTREPRENEURSHIP


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FormoreinformationontheGEMOntario2015report,pleasecontactCharles Davis at [email protected].

FormoreinformationonGEMCanada,pleasecontactPeter Josty, ExecutiveDirectorofTHECIS,[email protected].

FormoreinformationontheGEMglobalreportsandonGEM,pleasecontacttheGEMExecutiveDirector,Mike Herrington, at [email protected].

The2015GEMCanadareportisavailableatwww.gemcanada.org.The2015GEMGlobalreportisavailableatwww.gemconsortium.org.

AlthoughGEMdatawereusedinthepreparationofthisreport,theirinterpretationandusearethesoleresponsibilityoftheauthorsandtheGEMCanadateam.

Inadditiontothe2015GEMCanadareport,provincialreportswillbepublishedforAlberta,Ontario,QuebecandAtlanticCanada.Thesewillbe available at www.gemcanada.orginduecourse.

MORE INFORMATION


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TheGEMCanadaandGEMOntarioprojectswouldnotbepossiblewithoutthesupportandencouragementofmanysupportersandfunders.Wewouldliketorecognizethefollowingasfundersforthe2014GEMCanadaandGEMOntarioreports.

SPONSOR RECOGNITION


Sigal Haber, Ph.DSigalHaberisaGEMCanadaresearcher.Sigal’sstudiesfocusontheinterfaceofentrepreneurshipandtourismwithitsuniquecharacteristics.Shealsostudiedfamilybusinesses,businessincubatorsandentrepreneurshipsuccessinserviceindustries.Sigal’sstudieswerepublishedinleadingentrepreneurshipacademicjournalsincluding:JBV,JSBM,AnnalsofTourismResearch.SigalhasanextensiveexperienceinteachingentrepreneurshipfromIsrael(Ben-GurionUniversityandTel-AvivUniversity)andfromSchulichSchoolofBusinessatYorkU.Sigalhasalsopracticalexperienceinmarketingresearchandwritingmarketingandbusinessplans.AsascientificconsultanttotheIsraeliMinistryofEducationshedevelopedentrepreneurshipandstrategyrelatededucationalprogramsforsecondary schools.

Matthew Lo, MA MatthewLoisaPolicyAdvisorattheBrookfieldInstituteforInnovation+Entrepreneurship(BII+E),withabackgroundineconomics,sustainabledevelopmentandempiricalanalysis.Hiscurrentresearchinterestsincludefiscalpolicy,socialwelfareandtheeconomicimpactsofentrepreneurship.WithworkexperienceintheFederalGovernmentandFraserInstitute,Matthewhaspracticalknowledgeoneconomicanalysis,empiricalpolicyevaluationandprojectmanagement.Inhispastroles,hehasconductedresearchontheeconomicimpactsoftaxation,andtherelationshipbetweenresourcedevelopmentandeconomicgrowth.

REPORT AUTHORS

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Charles H. Davis, Ph.DCharlesDavisisaprofessorinRyersonUniversity’sRTASchoolofMedia(FacultyofCommunicationandDesign)andiscross-appointedwiththeEntrepreneurshipandStrategyDepartmentintheTedRogersSchoolofManagement.HeholdstheESRogersResearchChairinMediaManagementandEntrepreneurshipandheservesasAssociateDeanforScholarlyResearchandCreativeActivitiesfortheFacultyofCommunication&Design.Charlesteachesandconductsresearchonmanagementandpolicyinindustriesthatproduceexperiencegoods-withspecialinterestininnovationandnewproductdevelopmentinthesoftwareandcontentlayersofcreativeindustries.Hisresearchprojectsincludestudiesofmediaproductinnovation,medialabour,mediaindustryclusters,audienceresponsestomediaofferings,corporategovernanceofinnovation,digitalentrepreneurship,andinnovationpolicy.

REPORT AUTHORS


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Bhave, M.P.(1994).Aprocessmodelofentrepreneurialventurecreation.JournalofBusinessVenturing,9(3):223-343.

Kelly, D., Singer, S., & Herrington, M.(2016).GEM 2015/16 Global Report.London:TheGlobalEntrepreneurshipResearchAssociation.

Langford, C. H., Josty, P., & Saunders, C.(2016).2015 GEM CANADA NATIONAL REPORT.London:GlobalEntrepreneurshipResearch Association.

Ontario Ministry of Finance.(2016).OntarioFactSheetJuly2016.Retrievedfromhttp://www.fin.gov.on.ca/en/economy/ecupdates/factsheet.html

Ontario Securities Commission.(2015).Retrievedfromhttp://www.osc.gov.on.ca/en/About_about_index.htm

Pinchot, G.1984.WhoistheIntrapreneur?In:Intrapreneuring:WhyYouDon’tHavetoLeavetheCorporationtoBecomeanEntrepreneur.NewYork:Harper&Row.pp.28–48

Schumpeter, J.A.1934TheTheoryofEconomicDevelopment:AnInquiryintoProfits,Capital,Credit,InterestandBusinessCycle.TransactionPub.

Stinchcombe, A. L.(1965).Organizationsandsocialstructure.Handbook of organizations,44(2),142-193.

The World Bank.(2016).GDPpercapita(currentUS$).Retrievedfromhttp://data.worldbank.org/indicator/NY.GDP.PCAP.CD?page=5

Wolff, N., Valliere, D., Davis, C., Lin, H., Cukier, W., Cyr, D., & Wong, D.(2015).2014 GEM ONTARIO REPORT.London:GlobalEntrepreneurshipResearchAssociation.

REFERENCES


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GEM 2015 – Definitions and Terminology-Entrepreneurship–anyactivityaimedtowardstheformationof anenterpriseorabusinessorganization,expansionor transformationofanexistingbusinessorthecreationofindependent employmentofanindividualorateamthroughabusiness organization.

-Total Early-Stage Entrepreneurial Activity Rate – TEA– Thecombinedpercentageofentrepreneursamongtheadult population,ages18-64,whoareatoneofthefollowingfirsttwo stagesofformingabusiness:

1) Nascent–Thecreationandformationstage,atwhichindividuals begintocommitresources,suchastimeormoneytoventure.It isthephaseduringwhichthenewenterprisehasnotpaidout wagesofanykindforover3months.

2)New Business Stage/ Baby Business–Anybusinessoperating formorethan3monthsbutnotmorethan42months,thathas beenpayingsalariesordrawings.

3)Established Businesses (EBs)–Anyenterpriseagedmorethan42 monthsthathasbeenpayingsalariesordrawings.

A Stage of Economic Development in GEM study- Classification was adapted from the World Economic Forum (WEF).

1) Factor-Driven Countries–Economiesaredominatedby subsistenceagricultureandextractionbusinessesandminingof naturalresources,relianceonalowtomediumeducatedand unskilledworkforceandfocussedofguaranteeingthepopulation’s mostbasicsustenanceneeds.

2)Efficiency-Driven Countries–Economiescharacterizedwith advancedeconomicdevelopmentandindustrialization;mass productionenablescompetitivenessandeconomiesofscale; Developmentoflargedominantandcapitalintensive organizationsthatfocusonproductionefficiency.Needsofthe populationareprovidedbeyondbasicsustenance.

GLOSSARY


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3)Innovation-Driven Economies (IDEs)–IndevelopedInnovation- DrivenEconomiesadvancesaremoreknowledgeintensive,reliant onmassdataandextensiveresearchanddevelopment.These economiesaremuchdiverseandincludedevelopedservicesector.

Attitudes–Self-perceptionaboutentrepreneurship

- Indicatesratesofpersonalperceptionaboutentrepreneurship.It

is assumedthatthedecisiontostartabusinesswouldbe influencedbythefollowingindicators:

- Whetherpeopleknowentrepreneurs

- Whetherpeopleidentifiedopportunitiesaroundtheminthelast6 months

- Whetherthosewhoseeopportunitywouldfeelconstrainedbyfear offailure

- Whethertheybelievetheyarecapableofstartingabusiness

- Whethertheyintendtodosowithinthenext3years

Motives

- Opportunity-Driven Entrepreneurs–Owner/managerofa businesswhosemotiveforestablishingthebusinessisautonomy andself-management(%).

- Necessity-Driven Entrepreneurs–Owner/managerofabusiness whowentintobusinessduetolackofotherjoboptions(%).

Sectors-Therateofentrepreneurswhoareactiveinoneofthe followingsectors:

- Extractive(e.g.mining,agriculture)

- Transformative(e.g.manufacturing)

- Business-orientedservices

- Consumer-orientedservices

GLOSSARY


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Aspirations-Aspirationismeasuredby3typesofindicators:

- Jobcreation

- Product-marketcombination

- Internationalization

Job Creation-Therateofentrepreneurswhodeclaretheir ambitiontoaddemployeestoitspayrollinthe5nextyearsofthe researchperiod.

• 1)Nogrowthorientation–addingupto5employees(%)

• 2)Mediumtohighgrowth-orientedentrepreneurs-adding6to 19employees(%)

• 3)Highgrowth-orientedentrepreneurs–adding20employees andmoreinthe5nextyearsandemploying10ormoreworkers andgrowthofover50%within5years(%).

Product-market combination–Therateofentrepreneurswho anticipatetocreatenewproductandnewmarket.

Internationalization–Therateofentrepreneurswhoreportthat aportionoftheirsalescomefromexportingtoeconomiesoutside their own.

• Highinternationalization–upto25%

• Mediuminternationalizationlevel–25%-75%

• Highinternationalizationlevel–75%-100%

Intrapreneurship–Individualsthatwereemployedinan organizationandhavebeeninvolvedinventuringwithinthe organizationasaleaderinthepast3years(%).

Exit–Individuals,whostatedthattheyhaveeithersold,shutdown, discontinuedorquitabusinessinthepastyear(%).


GLOSSARY

Global Entrepreneurship Research AssociationLondonBusinessSchoolRegentsPark,LondonNW14SA,UK.

[email protected]

www.gemconsortium.org

The Centre for Innovation Studies (THECIS)#125, Alastair Ross Technology Centre355331StreetNWCalgary, Alberta, Canada T2L 2K7

www.thecis.ca

2015 gem sigal haber 1 2 3 1 research associate, media ... · gem ntario report gem canada report...

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