A new report on entrepreneurship in Newfoundland and Labrador reveals the province has a healthy entrepreneurial environment, especially among older entrepreneurs and immigrants.

The findings were released Wednesday in the 2013 Global Entrepreneurship Monitor (GEM) Newfoundland and Labrador Report, part of an annual study of entrepreneurship throughout the world. The provincial report was authored by Gary Gorman, Dennis Hanlon and Blair Winsor at the Memorial University’s Faculty of Business Administration.

“This is a good news report as it tells us that, in spite of Newfoundland and Labrador’s history of being a “have not” province, the state of entrepreneurship in this province is strong,” said Hanlon, associate professor of entrepreneurship.  “In particular, early-stage entrepreneurial activity is being driven by opportunity rather than necessity, which is likely a reflection of the strong provincial economy.”

The GEM report says Newfoundland and Labrador has the highest rate of immigrant early-stage entrepreneurship in Canada at 19 percent. Quebec has the second-highest rate at 14.8 percent.

It also said the province has the highest rate of early-stage entrepreneurial participation in the 55-64 age group at 27.3 percent compared to the national average of 9 percent.

The report said Newfoundland and Labrador’s entrepreneurship community differs from the rest of the country in several ways. Entrepreneurs are accorded high social status than in the rest of Canada, said the report, and total early-stage entrepreneurial activity is slightly lower than the national average.

The report, the first of its kind for NL, also identifies some areas that can be further improved to strengthen entrepreneurial activity such as access to private funding, education and training, and greater support for high-growth firms.

“The real excitement and action [in NL entrepreneurship] is on the startup end -- that area where founders are taking their innovative ideas and turning them into high-growth enterprises,” Roger Power, Co-Founder of Startup Newfoundland & Labrador. “We see businesses form rapidly, develop their products and services quickly and most importantly, attract customers.  These startups are developing apps, software, ocean tech and other innovative technologies that are entering markets around the world.”

The key findings of the report include:

•81.2 percent of the province’s labour force feels entrepreneurs are accorded high social status (Canadian result: 70.1 percent).

•75.9 percent indicate the media is doing a good job of supporting entrepreneurship (Canadian result: 69.9 percent).

•65.6 percent believe there are good opportunities to start a business in Newfoundland and Labrador. However, only 53 percent believe they possess the skills and knowledge to do so.

•Slightly more than 28 percent of the province’s adults (ages 18-64) are actively engaged in activities related to starting or running independent businesses.

•The rate of early stage entrepreneurship (i.e. those who are contemplating setting up a business or have started one in the last 3.5 years) in Newfoundland and Labrador is 10.8 percent, slightly lower than the national average of 12.1 percent.

•The business services sector has the highest rate of entrepreneurship participation in the province (37.9 percent) and in the country (40.5 percent).

•The rate of necessity-driven early-stage entrepreneurship is the lowest in the country, at 0.7 percent in Newfoundland and Labrador versus 1.8 percent in Canada.

•The province has one of the lowest rates of people planning to start a business in the country at 13.3 percent (Canadian result: 17 percent).

•Newfoundland and Labrador has one of the lowest participation rates in angel investing in the country: two percent compared to the national average of 3.9 percent.

•Nearly one in five early-stage entrepreneurs in the province is growth-oriented, which is comparable to the overall average for Canada. However, Newfoundland and Labrador doesn’t fare as well in either innovation or internationalization, areas which are necessary to compete at an international level.

•Entrepreneurs exhibit higher scores for well-being than the general population. Among entrepreneurs, females express greater well-being than their male counterparts, and owners of existing businesses report greater well-being than employees in the province.

Demographics (from APS)

•In the 55-64 age group, Newfoundland and Labrador has the highest rate of early-stage entrepreneurial participation at 27.3 percent compared to the national average of nine percent.

•The provincial ratio of 0.73:1 female to male early-stage entrepreneurs is stronger than the overall Canadian ratio of 0.68:1.

•Newfoundland and Labrador has the highest rate of immigrant early-stage entrepreneurship in Canada at 19 percent. Quebec has the second-highest rate at 14.8 percent.

Entrepreneurial ecosystem (from PES)

•The experts surveyed think that entrepreneurial opportunities in Newfoundland and Labrador are increasing; however, know-how to start and manage small businesses and high-growth firms is considered low.

•With the exception of government assistance, the experts believe that access to funding in the province for entrepreneurial activity is problematic. Entrepreneurs among the experts surveyed are more negative about access to capital, particularly from private sources.

•In the opinion of experts, there are shortcomings with education and training, especially at the secondary and primary educations levels where respondents indicate low levels of teaching directed to knowledge of market economic principles, and entrepreneurship and new firm creation. 

•According to the experts, support for women entrepreneurs is generally positive.

•The experts also thought that support for and attitudes toward innovation were positive.

•Physical infrastructure in Newfoundland and Labrador is considered to be good, but still ranks lower than the other provinces participating in the study.

•Experts in Newfoundland and Labrador think that Canadian culture is less supportive of entrepreneurship compared to experts in other provinces.

•Specific recommendations by the experts focus on financial support (venture capital), education and training (mentoring and experiential programs) and government policies (enhance those directed at small businesses).