Entrepreneurship: the “black hole” plagues Quebec

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Entrepreneurs have a lot of business creation in Quebec, but a lot of frustration after a few years, according to the Global Entrepreneurship Monitor (GEM) report on the entrepreneurship situation in Quebec (2019) presented on Friday by two professors from the University of Quebec in Trois-Rivières (UQTR).

“It’s a black hole,” study co-author Marc Duhamel said to describe the interim period after a business starts and grows strong after five years, when there are employees and some businesses reassuring donors.

The latest 2019 data provided by the document shows that the sustainability of new businesses is low in the province.

“Despite very strong emerging entrepreneurship, established entrepreneurship is declining and remains very low,” the report said. You’ll see a fairly steady increase since 2013, suggesting that a lot of businesses are starting, but mostly people are selling them, and they’re also closing, to a large extent. »

The proportion of new entrepreneurs in Quebec rose in 2019 at a rate of 7.4% among people aged 18 to 64. It gained 3 percentage points since 2013, placing Quebec in 4th place in a ranking of 23 countries as part of this research. The rest of Canada was slightly better, remaining in 2nd place, with a rate of 8.2%.

The situation is less clear for established entrepreneurs, those who pay a salary of at least 42 months. There are only 5.3% of established entrepreneurs in the province, the lowest proportion since the data was compiled in 2013. So Quebec is in 19th place in the world ranking, while the rest of the country is in th 8th place at 8.1%.

“It’s worrying. The heavy trend is a slow erosion of the number of established entrepreneurs,” the study’s other co-author, Étienne St-Jean, said in an interview with Les Affaires.

“It is a form of recognition of failure. Not until entrepreneurship is booming. But if the companies we create end up closing, entrepreneurship will have no desired impact on employment and economic activity. The portrait is therefore less rosy, ”added the professor of SME management at UQTR and researcher at the Institute for Research on SMEs.

Solutions

The report does not provide any reason to explain the preponderance of this “valley of death”.

Étienne St-Jean cites possible explanations that some entrepreneurs underestimate the time their project will take, that they don’t give enough time in critical times because they keep their jobs or simply because of poor planning. or lack of funding.

But there may be structural causes in the Quebec entrepreneurial ecosystem.

“A lot of effort has been put into creating businesses, but maybe less then. Someone who wants to grow their business or the business is struggling, seems to lack help and less support. This is one of the issues,” he said.

This observation was shared by the director of the department of Innovation and Andragogy at the École des entrepreneurs du Québec, André Menand.

“After two years, entrepreneurs are a bit lonely. There are fewer sources of funding and support. In this zone of turbulence, it’s “who I know” and “who can give me help”, ”he said at an internet panel held at the study presentation.

He points out that start -up and growth are not the same challenges for entrepreneurs.

André Menand recommends follow-up measures for entrepreneurs who have passed the milestone of two years of existence as support. He cited as an example a program that previously existed in Montreal that allowed them to have approximately twenty hours of support per year. But this initiative was lost, according to him, during the overhaul of assistance structures for SMEs.

“The baby disappeared with the water in the bath,” she lamented.

Access to specialists and group training, according to him, is also a way for transforming creators into managers.

Release of puberty

The Director General of the Movement of Innovation Accelerators of Quebec, Louis-Félix Binette, also believes that the enthusiasm for entrepreneurship the province has experienced in recent years is not enough.

“Dynamism does not lead to entrepreneurial success,” he said during the panel. We are in an adolescent phase of the market. Currently, our dynamism is not serving us for a long time, but it is a step in the right direction. »

He believes that support and advocacy organizations for entrepreneurs should change their approach to better support them, based on the path they have traveled. He proposed a “soccer match where organizations will pass the ball to support thriving entrepreneurs”. In this scenario, entrepreneurs will call on different resources at each stage of their development instead of always staying with the same partner who may no longer be meeting their new needs.

“It’s a change of mindset for organizations,” he said.

Louis-Félix Binette therefore believes that it is necessary to create “common entry points” to better redirect companies, because in an entrepreneurial ecosystem that is becoming more complex, it may be more difficult than in the past to know this is the right door to knock on.

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