Oh where, oh where are the entrepreneurs going?

One of my big themes lately is that we should think more about where the next round of entrepreneurs will come from rather than which funding programs/cash we are going to give the ones coming through the door.  My concern has to do with the aging entrepreneurs (over 40% are over 55) and the fact we are seeing few scaling up to become larger, export-focused firms (we seem to be seeing some scaling among national service industries such as insurance brokerages and funeral homes but increasingly the head office for these consolidated firms is not in New Brunswick).

The latest LFS numbers show the six straight year of falling self-employment in New Brunswick.  Since March 2014, self-employment is down by 15% (while it is up nationally by 6%).

If you look at employment by firm size, you see zero growth in payroll employees between 2013 and 2018 but a 4% decline in employment among the smallest firms (0-4 workers) and no growth among the 5-19 worker sized firm.  There is some growth among the 20-49 employees cohort, which is good, but I think this may have something to do with the consolidation we are seeing across multiple sectors in New Brunswick.  I’m okay with the funeral homes, insurance brokers and optometrist offices consolidating for scale but we should be seeing a new wave of entrepreneurs starting up – not just in tech but across the economy.  If you look nationally there has been employment growth among both the 0-4 and 5-19 worker cohorts.

We are getting older. So are the entrepreneurs.  We need to think about the role of public policy to foster a new generation of entrepreneurs.  This has something to do with tax policy.  It has something to do with immigration.  It something to do with the business conditions in the province and, it might, have something to do with access to financing (where government automatically focuses).

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3 Responses to Oh where, oh where are the entrepreneurs going?

  1. Fred says:

    One thing that the official statistics are not picking up is the rapid growth in the sharing economy, particularly short term rentals enabled by platforms like Airbnb. Growth in these untracked micro-businesses are surging and are driven by income need and consumer demand. I don’t know about NB, but in NS growth in STRs has been stronger in rural areas than urban ones, stronger among women than men and stronger with older demographics than younger. Indeed STR growth has been stronger in NS than other provinces if one standardizes for population. The sharing economy is less hindered by barriers to entry due to built in spontaneous deregulation. This suggests to me that there is some latent interest in entrepreneurship in our region but systemic barriers to traditional entrepreneurship continue to impede our progress.

  2. Jim says:

    Is New Brunswick the most monopolized economy in the world? While a portion of NB definitely seems to have a free handout mentality, I would argue that a lot of small town entrepreneurs in New Brunswick have been systematically bankrupted for decades without a single acknowledgement by local politicians. A town in western Ontario (New Liskard) has been the lucky recipient of bankrupted NB’ers and go out of their way welcoming these immigrants. They all arrive to perform the exact same job as they had been bankrupted for in NB only with a lot better wages. When I was a kid in small town NB there was always a local forestry operators in almost every small town now there are almost none. New Brunswick really only has a couple of issues preventing it from prospering and until there is some acknowledgement of the perverse inequity that exists then nothing will change and NB’s economy will continue to erode. JMHO

  3. Al Dillon says:

    Older entrepreneurs are not a bad thing….as long as we keep young entrepreneurs balanced in the mix. To do that, we have to spawn and support new ideas that incubate new companies and introduce them to national and international markets. As you well know, Government focuses on lip service to this opportunity with archaic programs. While they serve a small purpose, they do not attract and facilitate a new business leaders dream. Further, it does not provide the ecosystem that we claim is of value. CyberNB is a good model to follow for the top industries in which we wish to invest as New Brunswickers, but then again, it only works if Government transitions leadership of the agenda to industry, which they continue to resist. Government cannot manage business.

    One good trend, Tech companies are spreading their wings from the usual locations in Silicon Valley, Boston and other cities in the US. The quality of life issue, cost, retention of people and need for a new era of social interaction that has the individual at the centre (instead of the corporate needs) is upon us. This transition should see people populating areas where they want to live, rather than where they must to be employed. We need to harness the beauty of the Province with a few targeted ecosystems that incubate and support new ideas for new entrepreneurs and for large businesses seeking alternate locations outside the unaffordable and crowded cities.

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