My Globe & Mail Economy Lab blog this week talks about self-employment trends in Canada – in honour of the rollout of Startup Canada. I make the case that entrepreneurship and new startups are important to the economy. I use my favourite example of the pizza industry which I have always thought is the ideal example of a well functioning sector of the economy.
But self-employment, a pretty good proxy for entrepreneurship, has been waning somewhat in Canada in recent years. The ratio of self-employment to employees has declined by 12 percent since the late 1990s – not a huge decline but it is a trend given that from the mid 1970s the relatively intensity of self-employment rose steadily (increasing by 50% from 1976 to 1998).
There are only three industry groups that have increased the intensity of self-employment since the late 1990s: education, information and the biggest gainer – finance, insurance, real estate and leasing.
Historically, the stronger provincial economies have tended to have higher self-employment levels. Newfoundland and Labrador still has the lowest ratio of self-employment to employees in the country – it will be interesting to see if that culture changes now that the Rock is a growing economy.
I use the ratio of self-employed to persons employed in a business or other other organization. I could have used self-employment as a percentage of the total but increasingly I like these hard number comparison. It is relatively easy to visualize 100 employees on the one hand and 18 self-employed persons on the other.
