Percentage of the population aged 18 to 64 who report early stage entrepreneurial activity, 2019 or MRYA
What is this metric and why is it important?
Entrepreneurial initiative is a necessary condition for the kind of start-up and innovative activities that shape the performance of an economy. This metric reflects the percentage of the population aged 18 to 64 who report being actively involved in setting up a business or who report being the owner-manager of a new business.
How is Canada doing?
- At 18.2% in 2019, Canada led all global peers except Chile (36.7%) in the percentage of the population who reported early-stage entrepreneurial activity. The United States followed with 17.4%, and Latvia with 15.4%. In 2017 Estonia also had a significant percentage at 19.4%.
- Canada’s score has declined slightly from a high of 18.8% in 2017, but is above the 12.2% recorded in 2013, and well above the 7.2% reported in 2006.
- Among the largest provinces, Alberta leads with entrepreneurial initiative of 25%, followed by Ontario at 20%. Quebec’s entrepreneurial initiative is just under 13%.
- At 0.71, the ratio of women’s to men’s entrepreneurial initiative in Canada ranks eight among 23 peers, with Spain (0.94) and the United States (0.9) leading all other countries.
The Global Entrepreneurship Monitor (GEM) conducts an annual survey in more than 100 countries, with approximately 2,000 people surveyed in each country. Two survey questions ask whether respondents are starting a new business or have launched one in the past three years. Combining the answers to those questions produces a measure that GEM calls total entrepreneurial activity (TEA), but which we call entrepreneurial initiative. Specifically, entrepreneurial initiative is measured as the percentage of the population, aged 18 to 64, who report being:
- nascent entrepreneurs—i.e., actively involved in setting up a business they will own or co-own, but which has not yet paid wages, salaries, or any other payments to owners for more than three months; or
- owner-managers of a new business—i.e., an owner or part-owner and manager of a running business that has paid salaries, wages, and other payments for more than three but fewer than 42 months.
We call this entrepreneurial initiative because it captures self-reported activities rather than officially recorded activities, such as business registrations, tax filings, or wage receipts. In effect, it captures respondents’ efforts to launch new firms, but not the fate of the firms themselves.
To be sure, successful entrepreneurs require financing, business skills and experience, receptive markets and supply chains, and favourable economic and policy conditions. But without people who are motivated to start new businesses, even the most advantageous conditions will not spark entrepreneurial activity.
Data for the provinces is current to 2018 only, whereas data for countries is current to 2019. GEM consistently reports results for the largest four provinces, but only occasionally for the remaining provinces. Data is available for other provinces in some years, but not enough to include in current or time-series analyses.
The survey data captures what respondents report, but not evidence that they are actually engaged in early-stage entrepreneurship—such as registering a business, paying wages, or filing taxes. As such, we regard the data as revealing attitudes about entrepreneurship activity, and not evidence of launched or running firms.