In this week’s EconMinute, we’re talking about what drives entrepreneurialism in Alberta.
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Albertans have long prided themselves on their entrepreneurial spirit.
In a world which highly values new ideas and innovation, entrepreneurship will be increasingly important for Alberta’s future. It will be essential not just for our immediate recovery from COVID, but also for our long-term economic future.
We were curious to see if Alberta’s entrepreneurial spirit is alive and well, even after several challenging years.
A recent study confirms that Albertans are, in fact, still more entrepreneurial than the average Canadian, although the difference is relatively modest: 16.4% of entrepreneurs in Alberta expect to start a new business in the next 3 years compared with 15.1% nationally. Still, given its economic struggles over the last five years, it is remarkable that Alberta continues to outperform other provinces in this area.
So, what motivates Albertans to start new businesses? This study, along with a survey conducted just before the pandemic, holds some clues:
- Entrepreneurship in Alberta—even before the pandemic—may be more necessity-driven than opportunity-driven. As of 2019, entrepreneurs in Alberta were more likely to report that limited job opportunities are a motivating force for starting their own business (69% of respondents in Alberta vs 62% nationally).
- However, like those in other provinces, entrepreneurs in Alberta also have other, more positive motivators: they are likely to report an interest in both building wealth and making a difference in the world (66% of respondents for each, similar to the national average).
- More concerning is the fact that the pandemic has been especially challenging on current Alberta entrepreneurs:
- Alberta entrepreneurs are more likely than other Canadians to say it is harder to start a business today versus before the pandemic (43% vs 31% nationally);
- They are also more likely to report a strong negative impact on income due to the pandemic (16% vs 11% nationally).
Given the importance of start-ups and the commercialization of good ideas to future economic growth, the fact that entrepreneurship remains high in Alberta is both remarkable and encouraging. However, the tough economic times that have driven much of this activity, not to mention more recent pandemic-related challenges, mean the start-up community is more fragile in Alberta than in other provinces, likely with more limited savings and capital.