More opting to abandon traditional work: report
OTTAWA—Canada increasingly is becoming a country of small entrepreneurs, says a new report from CIBC pointing to a sharp rise in the number of Canadians starting their own businesses.
The report finds that in June, more than half-a-million Canadians said they had begun their own business over the past two years—a record number.
That’s a welcome shift from the early 1990s and 2008, when the recession and layoffs drove more and more Canadians into involuntary self-employment.
Currently, about 15 percent of Canada’s labour force is self-employed.
But the CIBC study, which drew its data from research commissioned from Statistics Canada, suggests the proportion will rise in the future.
Economist Benjamin Tal, who authored the paper released Tuesday, said several factors appear to be driving the trend.
Those factors include:
•the aging population (the over 50 crowd represents 30 percent of all the new start-ups);
•technology like the Internet that makes the process easier;
•outsourcing by corporations to small firms; and
•the continued influx of immigrants, who represent a sizable section of the self-starters.
“I would say these trends are irreversible,” Tal said.
“The trend suggests the growth in self-employment will be faster in the next decade than any other decade,” he added.
Tal also said older Canadians are more likely to start their own firms because they tend to have the work experience necessary, have made useful contacts during the work lives, and are more likely to have the financial means to do so.
He ventured another reason why the trend may accelerate.
“Add to that a new generation of Canadians that are much more cynical about corporate culture, about pensions, and are more self-reliant,” he noted.
The new entrepreneurs also tend to be predominantly male, accounting for almost 70 percent of all start-ups, although female-led start-ups tend to stay in business longer on average.
Tal noted Canada is not alone in experiencing a shift toward more self-employment from traditional work, saying a similar dynamic is occurring in the U.S. and much of Europe.