The health crisis somewhat dampened the entrepreneurial enthusiasm of Quebecers, but the entrepreneurial reserve was still maintained at an acceptable level. However, the pandemic is the tree that hides the forest of challenges that threaten this form of activity.
The most recent Entrepreneurial Index from Réseau Mentorat shows a year-over-year decrease in intentions to start entrepreneurship (-17.6%); start-up procedures (-14.4%) and business ownership (-9.7%). In fact, the rates of intentions and approaches have slipped to their lowest level since 2013. The Index is based on responses to surveys in which approximately 15,000 Quebecers and 918 business owners participated.
Entrepreneurship is getting younger
“The reality is however much more nuanced when we observe different demographic groups”, underlines Rina Marchand, senior director, content and innovation of the Mentoring Network.
This is the case, for example, when comparing age groups. The pandemic seems to have mainly slowed down the enthusiasm of the elderly. Among 35-49 year olds, intentions to start or take over a business fell by 32.4% and by 47% among 50-64 year olds. On the contrary, they increased by 12.3% among 18-34 year olds. The young succession therefore held out. Réseau Mentorat also notes a rejuvenation of the entire entrepreneurial chain. Its relative weight is increasing in entrepreneurial intentions and approaches as well as in business ownership, and is declining on the side of closures.
The entrepreneurial intentions of women also held up better than those of men in 2020. They fell “only” 12.7%, compared to 22.3% for men. Finally, among people with an immigrant background – a traditionally very dynamic category in entrepreneurship – intentions fell significantly, but still remained above average.
The picture turns out to be very similar when we observe the steps taken to create or take over a business. Here again, women, young people and immigrants have shown themselves to be the most enterprising. “These three groups were the hardest hit by job losses at the start of the pandemic, and several then turned to entrepreneurship,” Rina Marchand analyzes. However, necessity does not explain everything. Women, for example, have been more likely to find business opportunities in the health crisis. “
The Index shows that new opportunities were a motivation for initiating entrepreneurship initiatives among 39.6% of respondents, while 38.9% cited the need to replace lost income.
A shadow on the board
The Mentoring Network study therefore indicates a more diverse and younger entrepreneurial succession. Rina Marchand warns, however, against the danger of focusing too much on the impacts of the pandemic, at the risk of missing major underlying trends that create important issues for entrepreneurship in the province.
“The aging of the population and the labor shortage have already and will continue for several years to have an effect on the entrepreneurial dynamic in Quebec,” she warns. From a peak of 11.5% in 2014, the rate of business owners calculated by the index has halved. The trend accelerated in 2020. The pandemic precipitated the exit of several older entrepreneurs, some of whom sold or closed their companies rather than transfer it. Fortunately, young homeowners aged 34 and under partially offset this decrease.
Other entrepreneurs simply broke their teeth during the health crisis. “The challenge that arises in a context of an aging population which reduces the potential pool of entrepreneurs, is to keep in entrepreneurship those whose project fails, in other words how to lose the business, without losing the entrepreneur” , says Rina Marchand.
The desire remains present
Another big concern: the labor shortage, which reduces the number of Quebecers ready to create or take over a business. “There are a lot of jobs available in the labor market, many of which offer very attractive conditions,” she notes. This can cause some people to delay or even drop their entrepreneurial plans. “
However, she is delighted to note that the entrepreneurial culture is maintained. Admittedly, the number of respondents who believe that entrepreneurship is the optimal career choice has slipped a little in 2020, but it still exceeds 30%. In addition, more people surveyed than before consider entrepreneurship to be very important for the economic development of regions. “The will to undertake remains strong, but solutions will have to be found to alleviate the aging of the population and the lack of labor,” concludes Rina Marchand.