Professors at the University of Quebec School of Management in Trois-Rivieres (UQTR), Marc Duhamel and Étienne Saint-Jean, are the authors of the 2021 edition of the Quebec Entrepreneurship Activity Mode. (photo courtesy)
The rate of budding entrepreneurs reached a record high in 2021 in Quebec, according to the new annual report of the Global Entrepreneurship Monitor (GEM) compiled by professors from the University of Quebec School of Management in Trois-Rivieres (UQTR).
The percentage of companies that paid less than 41 months’ wages rose to 17.6%. That’s a jump from a low of 12.1% in 2020, the lowest since 2015, due to the pandemic. In 2013, the first year of these annual reports, the county’s start-up entrepreneurship rate was only 9.5%. This increase is attributed to the creation of new businesses.
It is clear that the end of the health crisis was beneficial to the smallest of small and medium-sized companies, which even managed to do well, with 65.4% of them saying that they were able to seize more opportunities thanks to the pandemic.
accelerated digital transformation
According to UQTR researchers, the pandemic has also encouraged the adoption of digital tools by Quebec entrepreneurs.
Prof. Etienne Saint-Jean explains in a press release: “Digital technologies have already been an important part of the thinking of entrepreneurs when starting their businesses. But since 2020, we can see that digital transformation has become a priority and that it is at the heart of many business models. The pandemic has strengthened The intent of budding entrepreneurs to benefit more from digital technologies in the future.”
Among well-known entrepreneurs, 42% said they want to improve their companies’ existing digital technologies.
Despite the increase in the rate of established entrepreneurs, which halted its gradual decline to rise slightly to 5.8%, sustainability remains the Achilles heel of young Quebec companies. Quebec ranks 12th out of 24 OECD countries surveyed, trailing the rest of the country, which has an entrepreneurship rate of 8.9%, in second place in 2021.
However, acquisitions are a common way in Quebec to gain access to entrepreneurship and maintain an existing SME presence.
The report shows that the rate of business transfer was 44.3% in 2021 in Quebec compared to 36.7% in 2020. This increase is different from the situation in the rest of Canada, where the rate of takeover to stabilize at 27.6% in 2021.
“The sustainability of startups remains one of the most troubling issues for the long-term vitality of Quebec’s entrepreneurship ecosystem,” says Professor Marc Duhamel of UQTR. For several years, GEM findings have suggested that the dynamism associated with acquisitions allows companies to capitalize on a new entrepreneurial impetus that will ultimately enhance their growth, development, and sustainability.
Being left behind for sustainable development
For the first time, the Global Consortium for Monitoring Entrepreneurship has assessed the commitment of entrepreneurs to sustainability. However, Quebec lags behind the rest of the country in this region. They have the same drive to make a difference, but only 58.9% of respondents in Quebec want to prioritize environmental and social impacts over earnings, compared to 68.8% elsewhere in the country. Quebec thus ranks ninth among the member states of the Organization for Economic Co-operation and Development in this category, while the rest of Canada ranks fifth. However, Quebec researchers remain optimistic, because the rising generation cares more about sustainable development than established entrepreneurs.
“The good news is that most Quebec entrepreneurs understand the importance of taking social and environmental issues into account in their business decisions, whether they are emerging or established,” explains Professor Saint-Jean. Sure, there is still a lot of work and awareness to do at this level, particularly to increase rates compared to the rest of Canada, but more sustainable business models are emerging and leading the way for others.
This 2021 report is the ninth edition of the state of Quebec’s entrepreneurial activity under the GEM. Including the rest of Canada, 23 other OECD countries were compared to the province in the study, including the United States, France, the United Kingdom and Germany.
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