TORONTO—Entrepreneurs could help create 10 million youth jobs across G20 nations, including Canada, but they must be given the right support to grow and finance their businesses, according to a new report by global consulting firm Accenture.
“Entrepreneurs cannot achieve success by themselves,” Accenture said. “In order to innovate, globalize and attract the right talent, they need adequate support from regulators, and they need to be part of a vibrant entrepreneurial ecosystem.”
That’s particularly important for Canada, which is lagging behind its peer countries when it comes to financing and dealing with the skills shortage.
While 74 per cent of entrepreneurs surveyed said they planned to create jobs this year, a shortage of people with relevant skills is hindering their efforts, as is finding local partners and accessing international financing.
International expansion is critical for Canadian entrepreneurs to grow their business and create jobs, but logistics costs, trade barriers and lack of local market knowledge are also making that expansion difficult.
Bruno Berthon, managing director and cross-industry strategy lead at Accenture Strategy, said there now is a better understanding of the importance of entrepreneurs in job creation, with many governments looking at regulatory changes and other ways to support budding businesses.
However, financing remains a big issue in Canada, more so than for the rest of the G20.
The country is also behind when it comes to finding early customers, or “customers angels” who help build the credentials firms need and who become “de facto partners who help make their business successful early on,” he said.
“Youth unemployment in the G20 is a major issue. If we’re talking about 10 million jobs in an environment where you have 44 million people unemployed, it’s very, very significant response to address the challenge that these countries are facing,” Berthon said.
“That makes it more attractive to support entrepreneurs. They are culturally much more excited about creating jobs; they feel that is it part of their responsibility, like family companies used to do … But unfortunately, there is (also) more complexity in finding the right people, having access to finance.”
While Canadian entrepreneurs may face some hurdles, Iain Klugman, president and chief executive of Communitech Inc., a high tech organization in Waterloo, Ont., that helps entrepreneurs bring their technologies to market, said there is a significant amount of work being done at the provincial and federal level to increase access to capital for start-ups, as well as for support with various programs and tax credits.
“There are some challenges that we need to solve; people are aware of them, people are working on them,” Klugman said.
“They’re not fixed yet, but certainly there’s a lot of interest and a lot of commitment in this country to building a very strong (group) of entrepreneurs.”
A good business climate and access to strong markets are also working in Canada’s favour—along with talented innovators and would-be entrepreneurs graduating every year, he said.
The Accenture report on global trends found that export-oriented companies and those focused on innovation are the most likely to create jobs, while 70 per cent of new firms (those launched in the past 12 months) were considering international expansion.
That doesn’t mean that jobs would be created in overseas markets only, with 86 per cent of respondents saying they expected to increase the workforce in their home country at a faster pace than elsewhere.
Meanwhile, Canadian entrepreneurs were not the only ones who believed more could be done to foster an environment of youth job creation in their country.
Overall, only one quarter of those surveyed said they considered the actions taken by their governments to support youth job creation as relevant and efficient, Accenture said.
Entrepreneurs in all the areas surveyed said they expected governments to take action to support youth job creation by supporting entrepreneurial skills development, removing red tape, creating financial incentives and improving equity and access for job seekers.
Berthon noted that policy-makers are aware of the importance of entrepreneurs, but digital technologies are enabling and accelerating entrepreneurship in a way that, in some cases, is making it hard for the legislative and regulatory environment to keep pace.
The report looked at the views of more than 1,000 entrepreneurs from G20 countries and was developed ahead of the G20 Young Entrepreneurs’ Alliance Summit currently underway in Sydney, Australia.
The interviews were conducted in April.
G20 member countries are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States and the European Union.