GEM Canada Report on Youth Entrepreneurship 2018 Nov Overview - PowerPoint PPT Presentation

GEM Canada Report on Youth Entrepreneurship 2018 Nov

Overview Report purpose and key definition • GEM – Strengths & Approach • Report Highlights • Ø Attitudes Ø Activity and Motivations Ø Demographics Ø Aspirations Ø Recommendations

Report introduction ● Goal: Help policy makers, practitioners and educators recognize the value that youth entrepreneurs bring to Canada ● Youth entrepreneurship has benefits for the overall health of the economy and can be promoted through targeted policy intervention ● Youth: Entrepreneurs aged 18-39 years old (based on Futurpreneur definition)

GEM – Strengths & Approach • GEM methodology moves beyond ages and stages approach or readiness approach • World’s largest & longest running study • Inclusive definition of entrepreneurship • Multi-dimensional focus Ø Activity, attitudes, aspiration Ø Distinct business stages (early-stage, established)

How does GEM define Entrepreneurship? “ Any attempt at new business or venture creation, such as self-employment, a new business organization, or the expansion of an existing business, by an individual, a team of individuals or an established business.” Total Early Activity (TEA) Less than 3.5 yrs Established Business (EB) 3.5 years +

Attitudes

Youth Entrepreneurship attitudes are positive and we see upward trends 80.0% 74.5% 74.0% 73.9% 73.1% 73.1% 68.7% 69.1% 69.1% 70.0% 64.6% 60.2% 60.0% 60.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% 2013 2014 2015 2016 Good Career High Status Media Coverage Attitudes of Canadian Youth Towards Entrepreneurship, by year (2013-2016) 7

Youth Entrepreneurs see opportunities decrease but are more confident with skills & experience Attitude 2013 2014 2015 2016 Knowledge 33.8% 35.0% 37.1% 32.4% Opportunity 61.3% 57.9% 54.7% 55.9% Skills & Experience 44.8% 41.3% 45.4% 52.8% Fear of Failure 41.6% 43.1% 45.4% 40.4% Intent to Start a Business 19.8% 21.9% 19.9% 18.5% Perception of Canadian Youth Towards Entrepreneurial Skills, by year (2013-2016) 8

Activity and Motivations 9

Youth TEA slightly lower than national average, Established Business rate on the rise 2016 Canada 0.18 16.0% rate: 15.4% 0.16 14.2% 14.1% 16.7% 0.14 TEA, 0.12 6.8% EB 0.1 0.08 5.3% 0.06 4.7% 4.1% 3.4% 0.04 0.02 0 2013 2014 2015 2016 TEA Established Business Canadian Youth Total TEA Share versus Established Business Activity, by year (2013-2016) 10

youth Youth Motivations are changing: entrepreneurs Independence increasing, need for are opportunity personal income less of a factor driven Motivations 2013 2014 2015 2016 Greater 46.7 32.7 41.4 62.5 Independence Increase 43.3 52.7 43.1 30.0 Personal Income Just to Maintain 5.0 3.6 0 7.5 Income None of These 5 10.91 15.5 0 Motivations of Opportunity Driven Canadian Youth Entrepreneurs, by year (2013-2016) 11

Family Savings, 9% 2014 data Other, 14% Personal Savings are the biggest source of Personal Savings , data, Bank or other 58% Informal Financial investors Institution, are on 19% the rise 2013 2014 2015 2016 % Informal 4.6% 4.8% 6.2% 11.0% Investors Mean Amount 10,964 23,551 16,371 16,899 Invested 12

Demographics 13

It is not only “young” youth entrepreneurs that need support, there continues to be the need to assist with the start-up and maintenance of entrepreneurial ventures in all age demographics 100.0% 90.0% 80.0% 70.0% 47.0% 60.0% 50.0% 38.5% 40.0% 14.5% 30.0% 47.4% 20.0% 27.3% 25.4% 10.0% 0.0% 18-24 25-34 35-39 TEA Established Business Share Total of TEA and Established Business Rates for Canadian Youth Entrepreneurs by Age, cumulative % 14 (2013-2016)

There is a gender gap for Canadian Youth Entrepreneurs • Canadian GEM surveys have shown that the gap between men and women TEA has been smaller in Canada than in other developed countries. This is not case for Canadian youth. • It would seem female youth entrepreneurs are more likely to engage in TEA but perhaps not maintain their ventures as an established business. • Established business in the rise for female youth. 7.6% 8% 7.1% 6.7% 6.7% 5.8% 5.4% 6% 5.1% 4.8% 4.0% 3.4% 4% 2.7% 2.6% 2% 0% 2013 2014 2015 2016 Established Business Established Business Male Established Business Female 15

Female Youth Entrepreneurs underplay skills and express more fear of failure 70.0 58.2% 57.3% 60.0 55.5% Attitudes of 48.8% 50.0 Canadian Youth 40.6% About 37.6% 40.0 Entrepreneurship, by Gender, 30.0 cumulative % (2013-2016) 20.0 10.0 0.0 Opportunity Skills and Fear of Failure Experience Male Female 16

Consumer Oriented Services are the most common career choice for Youth Entrepreneurs Extractive 3% Transformative 20% Consumer Oriented 45% Business Oriented TEA Sector Participation of 32% Canadian Youth Entrepreneurs, Total to Age 39, cumulative % N= 572 (2013-2016) 17

Other Demographics • Most of the early-stage youth entrepreneurs in Canada have a higher- level education, 80% of all three groups possessing either a secondary diploma or a post-secondary degree. Higher than the United States(the GEM 2015 report indicated that only 51.8% of young entrepreneurs in the USA have at least a postsecondary degree). • Ontario and Alberta stand out as a hubs for youth entrepreneurship. This data conforms with provincial breakdowns discussed in past GEM reports and has been explained by low infrastructure costs and a culture of entrepreneurship. 18

Aspirations 19

Canadian youth entrepreneurs are optimistic about the future and not aiming exclusively for sole proprietor businesses 20+ None 17% 16% (6-19) 18% (1-5) 49% Job Aspirations in Five Years of Canadian Youth Entrepreneurs, Total to Age 39, cumulative % (2013- 2016) 20

A little over half of firms plan for a small but identifiable export market Market Expansion of All Canadian Youth Entrepreneurs, cumulative % (2013-2016) 21

Canadian Youth Entrepreneurs believe their product or service is novel to customers, fewer are convinced they face no competition Novelty (Unfamiliarity) of Product or Service of TEA Canadian Youth Entrepreneurs, Cumulative % (2013-2016) Competition of Product or Service of TEA Canadian Youth Entrepreneurs, Cumulative % (2013-2016) 22

Recommendations 23

• Take advantage of (and encourage) positive perceptions about entrepreneurship as a good career choice, deserving of high status. • Provide additional funding opportunities and supports for youth entrepreneurs and youth investors. • Increase training and funding for groups that may need more help in building their entrepreneurial capital (such as female youth entrepreneurs). • Target supports, capitalizing on the different strengths of the youth demographic (high growth expectations of the 18-24 years old cohort, the balanced TEA and established business aspirations of the 25-34 year old cohort, the unique contribution of the 35-39 year old cohort to more diverse sector participation and TEA). • Collect additional baseline data on youth entrepreneurship . 24

Sincere thanks to supporters of GEM Report on Youth Entrepreneurship in Canada

GEM Canada Team Charles Davis Peter Josty (Team Leader) Adam Holbrook Dave Valliere Blair Winsor Howard Lin Jacqueline Walsh Nathan Greidanus Harvey Johnstone Chris Street Chad Saunders Kevin McKague Yves Bourgeois Richard Hawkins Allison Ramsay Amanda Williams Étienne St-Jean Karen D. Hughes Marc Duhamel Murat Erogul Brian Wisted Sandra Schillo

GEM Canada Reports are available at: www.thecis.ca 27