There is an interesting story in the Financial Post about a summit held in Fredericton recently on the topic of entrepreneurship. The title of the piece is “Can New Brunswick become the Davos of entrepreneurship?”.
We have discussed the topic of entrepreneurship at least a couple of hundred times over six years here. We have looked at data showing that New Brunswick has a higher percentage of small businesses compared to the rest of the Canadian provinces but those small businesses have far less change of becoming mid and big businesses.
We have also talked about the fact that while NB positions itself as an export-intensive province, almost all of the exporting is done by large firms.
We have talked about the difference between a lifestyle small business owner looking to make an income and work for him/herself and an entrepreneur who is willing to risk their RRSPs on a crazy entrepreneurial idea. New Brunswick has thousands of the former and a small handful of the latter.
We have talked about the DNA of entrepreneurs – what drives them and speculated why there are fewer here than elsewhere. The fact that success is poo pooed in many corners of New Brunswick (as a side I chatted with a guy that has a huge house and a great car in a small rural town and the rumour around is that he was a drug baron). The fact there is very little risk capital coming out of the disposable income of doctors, lawyers, etc. like you might see in a larger urban market.
I remember the frustration of the folks involved in that effort back in the 1990s to get a risk capital pool started. They assembled a group of wealthy NBers and asked them to all put some green in a pot. Then they would hear pitches from entrepreneurs and decide in whom to invest. The frustration was these angels had the risk tolerance of a bank and the return expectation of a loan shark (or an ATM). If we don’t have small brown envelopes of cash to throw at interesting ideas, we will have fewer entrepreneurs.
We have talked about the interplay between large firms and entrepreneurships. I pointed out – much to the angst of several colleagues – that the majority of successful entrepreneurs in New Brunswick started out in a large firm – got experience, came up with a good idea and then went on their own. Very few started in their Apple garage during high school.
I remember the grand debates over cutting small business tax to the bone back in the Lord years. He was heralded by the CFIB, by Chambers, by national groups as being a visionary and supporters proudly intoned this would create massive new entrepreneurship in New Brunswick – until that Fraser Institute report showing New Brunswick was 58th of 60th provinces and U.S. states for new business creation – after that tax cut was put in place. The child-like naivete of thinking a tax cut alone would spur entrepreneurship.
I was having a lunch with a couple of IT guys a while back and we agreed that the best way to truly stimulate IT entrepreneurship in New Brunswick would be to give Gerry Pond $100 million and ask him to allocate it to the best new ideas over the next five years. Gerry’s had a few whopper losers and a number of winners and would likely be a far better bet then bureaucrats.
In the end, the inference to Davos means thinking. The World Economic Forum is about the best minds in the world converging to debate the biggest economic challenges of the day. It is an amazing brand.
I would say that New Brunswick should try to be the Davos – not of entrepreneurship – but of economic development. Economic development ties in the broader elements such as investment attraction, workforce development, the role of R&D, infrastructure, networks and entrepreneurship and the complex forces and relationships that bring them together.
I have been calling for this for years for one main reason. If New Brunswick became a world leader in thinking about economic development the hope is some of the ideas would actually rub off here.
I know there is cynicism about this out there but I urge you to think about it. Across the generations ideas are the currency of economic growth – that should hold for regional economic development as well.