Alberta has a "scale-up gap." While half of Alberta startups survive for more than five years, only 0.1 per cent of small firms become mid-sized, and only two per cent of mid-sized firms become large. Examining this "scale-up gap" was the focus of Mount Royal University's Institute for Innovation and Entrepreneurship 2019 Small Business Growth Roundtable on Nov. 21.
High Growth Firms (HGFs) contribute disproportionately to job creation and are rare. Between 2009 and 2012, HGFs accounted for 1.24 per cent of all Canadian firms and delivered 63 per cent of the total net job growth. The troubling fact is stagnant or declining firms actually destroy more jobs than they create.
To achieve growth, firms can capture new markets or export, raise capital for investment, hire new or develop existing talent, develop and launch new products or services, and engage in operational excellence to improve productivity. The most essential route to growth, however, is often overlooked: leadership. Across all studies, the most important predictor of growth is the ambition and willingness of the leader to grow their firm, and their capacity to lead strategic and innovative change.
To confront the scale-up challenge, the Roundtable brought together successful small business leaders, policy makers, researchers and students to consider the nature of leadership talent required to grow more Alberta small businesses. Keynote speakers included Mark Hart (Director for Goldman Sachs U.K. 10,000 Small Businesses program) and respected entrepreneurship scholar and educator Norris Krueger.
"It all starts with ambition, an unwavering desire to grow your business. But beyond this, where do leaders focus to scale their small businesses? This is the sweet spot for the 2019 Small Business Growth Roundtable" said Simon Raby, Phd, assistant professor in entrepreneurship at MRU.
MRU researchers published a detailed report on the "Leaders Growth Mindset", and will release a new study in early 2020 on the "Scale-up Challenge" containing further evidence on the routes companies use to unlock scale and growth.
"To realize economic prosperity in Alberta, we must develop high-impact talent. We're thankful so many successful leaders have partnered with us to help other businesses replicate their success," said Ray DePaul, director of the Institute for Innovation and Entrepreneurship.
See Mayor Naheed Nenshi talk about the scale-up challenge and the Small Business Growth Roundtable here.
