2012 Thunder Bay Entrepreneur Community Snapshot
With this being small business week, I thought I would comment on Thunder Bay’s entrepreneur community. This week, the Canadian Federation of Independent Business released their 2012 report entitled Communities in Bloom.[i] This report evaluates all of the cities across Canada with a population greater than 25,000 to determine Canada’s top entrepreneurial cities.
The report provides an overall score based on three sub-category totals which are presence, perspective, and policy. Presence relates to the community’s reputation and scale of business ownership growth, as well as its industrial diversity. Perspective covers indicators associated with optimism and city growth whereas policy represents actions local governments take with respect to business taxation and regulation. After grazing over the report eagerly looking to find Thunder Bay above last years 2011 ranking of 45th, much to my demise the City has slipped to 62nd in the rankings. Although it is an upsetting figure, it also gives us as a community an opportunity to look at ourselves and explore what we can do to improve.
Presence includes factors from Statistics Canada such as business establishment growth, business establishments per capita, self-employment as a percentage of overall employment, and industry diversity. Out of a maximum score of 25, Thunder Bay scored a 9, good enough for the 4th lowest score tied with cities like Brantford and Kingston. The lead areas for opportunity to push Thunder Bay up the rankings include diversifying our economy, increasing our self-employed per 1000 above 3.6 and self-employed as a percentage of population beyond 3.74%.
This is easier said than done, our community needs to start creating awareness of entrepreneurship by celebrating the career and lowering the barriers or risks associated with being an entrepreneur (see video for why entrepreneurs are important to have in our community). Celebrating entrepreneurship will make others aware of the profession as a full-time career. In particular we need to promote the opportunity of being an entrepreneur at the grass roots level including elementary and high school levels. With a score of 9, we currently do not have many entrepreneurs in the community to look up to so we should be seeking to publicize and support the ones we do have as much as possible. In addition, who better to teach entrepreneurship than current and past entrepreneurs who are actively practicing or have been successful in the past that can bring live examples to the classroom and pass the skillset onto the next generation. In the US, 80% of all academic institutions have a program specifically for entrepreneurship, with leaders like Stanford, Harvard, and MIT leading the way and 50% of new post-secondary graduates believe starting their own small private venture is less risky than a corporate job.[ii] At Lakehead University entrepreneurship is a single course option as opposed to being seen as a viable career. With respect to the College, they are taking a pro-active approach partnering with the Innovation Centre on the ‘Venture Vault’ located at the former Hillcrest High school and are anticipating mingling their business students with live entrepreneurs to provide real-life hands on experience.
Although outside the control of our City, the Provincial and Federal government should seek ways to reduce the paperwork and fees associated with starting a business. For example, the goal of incorporating a company automatically creates a job for one person; all fees should be waved for anyone looking to establish a new corporation, as they are upfront with registering their business for Government revenue generation i.e. taxes and reduces the barriers to entry. Mainstay businesses should be made aware of the benefits an entrepreneur brings to their community to allow them to integrate entrepreneur driven products and solutions into their business processes. Finally, Thunder Bay as a community should not be looking towards mining as a ‘silver bullet’ to replace forestry. We need to continue to diversify our economy into life sciences, information communications technology, advanced manufacturing, among other STEM (science, technology, engineering, and mathematics) fields.
Perspective relates to the outlook or optimism for our Thunder Bay based firms for growth. According to the Communities in Bloom 2012 report our municipality scored 12 out of 35. This figure is arrived by evaluating building permits per capita, business expectations over next 12 months, expectation to hire full-time positions, overall state of business, and life satisfaction. With 14% expecting to hire full-time positions and 46% with stronger business expectations we may be lacking innovation in our traditional businesses. Relative to the Northwestern Ontario Innovation Centre’s client survey, nearly 60% expect to hire next year and all project higher business expectations leads us to believe we as a community should be investing more into innovation, whether a start-up or innovation in existing businesses to become more competitive to increase our growth and employment prospects.
Policy represents actions local governments take with respect to business taxation and regulation. This is a bright spot for Thunder Bay in 2012 as our community is tied for 2nd with Regina, St. John’s, and Oshawa among large CMAs (Census Metropolitan Areas). The primary drivers for the policy category include the cost of local Government being a concern, Government awareness of small business, regulation and paper burden on firms, and the local property tax gap. Although the cost of local Government may not have been a concern this past year with only 27% worried, next year the City faces increased financial hardship. Such hardships include lawsuits from Verizon Wind, the east end flood, and a potential dividend clawback from Tbaytel who is facing competitive pressures ontop of the acquisition of Dryden MTS while upgrading their network. In addition, our City Manager's Lean initiative aimed at reducing costs to address the city infrastructure deficit according to this article appears to be stalled at City Council. A real opportunity for our community is to raise the profile of small business to Government. Only 6% of respondents thought the Government is aware and working on policy improvements to increase our small business competitiveness locally.
Source: Canadian Federation of Independent Business 2012
Although I don’t personally agree with the way categories are scored or even used, this report nonetheless provides a benchmark of improvement opportunities for us to become aware of entrepreneurship and promote the profession within our community at the grass roots and municipal levels to become a priority and economic driving force. For the full report click here.
[i] Canadian Federation of Independent Business, Communities in Bloom 2012 http://www.cfib-fcei.ca/cfib-documents/rr3274.pdf
[ii] Financial Post, The Next Generation of Entrepreneurs, http://business.financialpost.com/2010/11/16/the-next-great-generation-of-entrepreneurs/