The Business Researcher Newsletter

February 28, 2005 Volume 8 Number 2

• Opening Comments

• What's New at www.gdsourcing.ca

• Statistics Canada releases

• Entrepreneurial Activity in Canada

• MSN Search Now a Reality

• Small Business Stats Facts

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Opening Comments

Hello,

Welcome to the February issue of the BR Newsletter. I apologize to anyone who got bombarded with three copies of our last issue.  There was a glitch with our e-mail delivery program and some people received all versions of the newsletter (HTML, Text and MultiPart).  My IT people tell me that the situation has been corrected but please let me know if you have received more than one copy of this issue.

If you would like to change the format in which you receive the newsletter (HTML vs. Text) please e-mail me at contact@gdsourcing.com

The latest results of the Global Entrepreneurship Monitor were released at the end of January 2005.  I am not really sure why this report does not receive more coverage in the Canadian media.  It provides a fascinating glimpse at the entrepreneurial climate in Canada and around the world.  Comparisons are made between 2004 and previous years. You can view the latest and archived reports at: http://www.gemconsortium.org/

I hope you find this issue helpful.

John White

GDSourcing - Research & Retrieval

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What's New at www.gdsourcing.ca

The following site summaries were added to the GDSourcing web site over the last month.

Canadian Electricity Association

Site: http://www.canelect.ca/

Site Summary: http://www.gdsourcing.ca/works/Electricity.htm

Electricity industry facts and figures

Global Entrepreneurship Monitor

Site: http://www.gemconsortium.org/

Site Summary: http://www.gdsourcing.ca/works/GEM2.htm

Report on entrepreneurship in Canada

Return to Table of Contents

Statistics Canada releases

The following statistics were released by Statistics Canada over the last month. We have listed those releases we feel are of the most interest to Canadian entrepreneurs.

Very few of these statistics are available on-line. The URL listed is a direct link to the press release associated with the data. It provides contact and ordering information.

If you want to purchase any publication related to these releases please see our web site: http://www.gdsourcing.com/works/StatCan.htm

We offer a 20% discount on most Stats Can publications and a 10% discount on Stats Can electronic products. For more information you can reach us at contact@gdsourcing.com. Put "StatsCan" in the subject line of your e-mail.

AGRICULTURE

Agriculture value added account 2001, 2002 and 2003 (revised)

http://www.statcan.ca/Daily/English/050119/d050119e.htm

Balance sheet of the agricultural sector at December 31

2001, 2002 and 2003 (revised)

http://www.statcan.ca/Daily/English/050119/d050119f.htm

Farm business cash flows 2001, 2002 and 2003 (revised)

http://www.statcan.ca/Daily/English/050119/d050119g.htm

Chicken production 2004 (preliminary)

http://www.statcan.ca/Daily/English/050204/d050204b.htm

Fruit and vegetable production 2004

http://www.statcan.ca/Daily/English/050211/d050211b.htm

Wool disposition and farm value 2003 

http://www.statcan.ca/Daily/English/050216/d050216e.htm

Livestock estimates As of January 1, 2005

http://www.statcan.ca/Daily/English/050217/d050217b.htm

Hog Statistics, 2005

http://www.statcan.ca:8096/bsolc/english/bsolc?catno=23-010-XIE

Sheep Statistics, 2005

http://www.statcan.ca:8096/bsolc/english/bsolc?catno=23-011-XIE

Cattle statistics

http://www.statcan.ca:8096/bsolc/english/bsolc?catno=23-012-XIE

ARTS & CULTURE

Economic contribution of culture in Canada 2002

http://www.statcan.ca/Daily/English/050124/d050124d.htm

Government expenditures on culture 2002/03

http://www.statcan.ca/Daily/English/050127/d050127b.htm

 BUSINESS SERVICES

Annual Survey of Accounting and Bookkeeping Services 2003

http://www.statcan.ca/Daily/English/050121/d050121b.htm

Annual Survey of Surveying and Mapping Services 2003

http://www.statcan.ca/Daily/English/050121/d050121c.htm

Science, Innovation and Electronic Information Division Working Papers: Federal Government Expenditures and Personnel in the Natural and Social Sciences, 1995/96 to 2004/05

http://www.statcan.ca:8096/bsolc/english/bsolc?catno=88F0006XIE2005001

Specialized design services 2003

http://www.statcan.ca/Daily/English/050221/d050221d.htm

CONSTRUCTION

Investment in non-residential building construction

Fourth quarter 2004 and year 2004

http://www.statcan.ca/Daily/English/050117/d050117a.htm

Study: Urban consumption of prime agricultural land

1951 to 2001

http://www.statcan.ca/Daily/English/050131/d050131c.htm

Study: Decline in homeownership rates among immigrant families 1981 to 2001

http://www.statcan.ca/Daily/English/050203/d050203a.htm

Building permits Annual 2004 (preliminary) and December 2004

http://www.statcan.ca/Daily/English/050207/d050207a.htm

Non-residential building construction price index Fourth quarter 2004 

http://www.statcan.ca/Daily/English/050214/d050214c.htm

Real estate agents, brokers, appraisers and other real estate activities industries 2003

http://www.statcan.ca/Daily/English/050221/d050221e.htm

ECONOMIC INDICATORS

Study: Role of productivity in the output gap between Canada and the United States 1994 to 2002

http://www.statcan.ca/Daily/English/050113/d050113a.htm

Population of businesses with employees Fourth quarter 2004

http://www.statcan.ca/Daily/English/050202/d050202c.htm

Leading indicators December 2004

http://www.statcan.ca/Daily/English/050118/d050118a.htm

Foreign and domestic investment in Canada 2000 to 2004

http://www.statcan.ca/Daily/English/050203/d050203b.htm

Financial and taxation statistics for enterprises 2003

http://www.statcan.ca/Daily/English/050208/d050208a.htm

Study: Business Dynamics in Canada 1991 to 2001

http://www.statcan.ca/Daily/English/050215/d050215a.htm

Labour Force Historical Review on CD-ROM 1976 to 2004

http://www.statcan.ca/Daily/English/050218/b050218a.htm

EDUCATION

 University degrees, diplomas and certificates awarded 2001

http://www.statcan.ca/Daily/English/050118/d050118b.htm

Study: Impact of family background on access to postsecondary education

http://www.statcan.ca/Daily/English/050118/d050118c.htm

Secondary school graduates 2002/03

http://www.statcan.ca/Daily/English/050202/d050202b.htm

Child care 1994/95 and 2000/01

http://www.statcan.ca/Daily/English/050207/d050207b.htm

Information and Communications Technologies in Schools Survey 2003/04 school year

http://www.statcan.ca/Daily/English/050209/d050209b.htm

Study: Participation in post-secondary education 1993 to 2001

http://www.statcan.ca/Daily/English/050216/d050216b.htm

GOVERNMENT

Federal spending on science and technology 2002/03

http://www.statcan.ca/Daily/English/050125/d050125c.htm

 HEALTH

Cancer survival statistics 1992 to 1997

http://www.statcan.ca/Daily/English/050125/d050125d.htm

Health Indicators

http://www.statcan.ca/Daily/English/050201/d050201a.htm

Induced abortions 2002

http://www.statcan.ca/Daily/English/050211/d050211a.htm

Study: Links between symptoms of depression among young people and relationships with others 1998/99 to 2000/01

http://www.statcan.ca/Daily/English/050216/d050216a.htm

 JUSTICE

Maintenance Enforcement Survey: Child and spousal support 2003/2004

http://www.statcan.ca/Daily/English/050119/d050119c.htm

MANUFACTURING

Study: Do prices charged by manufacturers in Canada and the United States move together over time?

http://www.statcan.ca/Daily/English/050215/d050215b.htm

PRIMARY

Electric power selling price indexes September to December 2004

http://www.statcan.ca/Daily/English/050128/d050128d.htm

Coal production 2004 (preliminary)

http://www.statcan.ca/Daily/English/050211/d050211c.htm

SOCIAL STATISTICS /POVERTY

Income Research Paper Series: The Ins and Outs of Poverty in Advanced Economies: Poverty Dynamics in Canada, Germany, Great Britain, and the United States, 1993 to 1998

http://www.statcan.ca:8096/bsolc/english/bsolc?catno=75F0002MIE2005001

Study: Trends in income inequality in Canada from an international perspective

http://www.statcan.ca/Daily/English/050210/d050210c.htm

National Longitudinal Survey of Children and Youth: Home environment, income and child behaviour 1994/95 to 2002/03

http://www.statcan.ca/Daily/English/050221/d050221b.htm

 TRADE

Quarterly Retail Commodity Survey

http://www.statcan.ca/Daily/English/050113/d050113b.htm

New motor vehicle sales December 2004 and annual 2004

http://www.statcan.ca/Daily/English/050214/d050214b.htm

Study: Sport utility vehicles 1999 to 2004

http://www.statcan.ca/Daily/English/050216/d050216c.htm

Monthly Survey of Large Retailers December 2004 and annual 2004

http://www.statcan.ca/Daily/English/050218/d050218b.htm

Profile of Canadian exporters 1993 to 2003

http://www.statcan.ca/Daily/English/050221/d050221c.htm

TRANSPORTATION

Natural gas transportation and distribution

June to September 2004 

http://www.statcan.ca/Daily/English/050113/d050113d.htm

Trucking industry 2003

http://www.statcan.ca/Daily/English/050118/d050118f.htm

Aircraft movement statistics 2004 (preliminary)

http://www.statcan.ca/Daily/English/050127/d050127d.htm

Study: The soaring loonie and international travel 1991 to 2004

http://www.statcan.ca/Daily/English/050210/d050210b.htm

WORKPLACE

Study: Training and technology in Canadian workplaces 1999

http://www.statcan.ca/Daily/English/050125/d050125a.htm

Study: Use of knowledge management in innovative business units 2003

http://www.statcan.ca/Daily/English/050209/d050209a.htm

Study: Are good jobs disappearing in Canada? 1981 to 2004

http://www.statcan.ca/Daily/English/050126/d050126a.htm

Study: Earnings of temporary versus permanent employees 2003

http://www.statcan.ca/Daily/English/050126/d050126b.htm

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Entrepreneurial Activity in Canada

According to the Global Entrepreneurship Monitor, total entrepreneurial activity in Canada has expanded for the first time in three years.  Entrepreneurial activity is defined as involvement in either with the creation of a business in the past year or in the management or ownership of a business established not more than 42 months prior for which salaries or wages have been paid. 

In 2000 12.2% of Canadian adults were identified as being entrepreneurially active. In 2001 and 2002 there were significant drops in participation.  Since 2002 however entrepreneurial activity has remained relatively stable with a very modest increase (0.3%) in 2004.

The recovery, as slight as it is, appears to be led by a renewed enthusiasm for entrepreneurship. Between 2003 and 2004 there was a marked increase in the percentage of Canadians who believe excellent opportunities existed for starting a business (32.7% vs. 44.8%).

Canadians not only see the opportunities but increasing numbers are confident that they have the skills necessary to succeed.  More than half of Canadians (54.9%) feel they have what it takes to start a profitable business. And in fact 12.4% expect to start their own business in the next 3 years. This again is a significant increase over 2003 when only one in ten (10.3%) anticipated starting a business in the near future.  While these figures have no bearing on the actual number of businesses that will start, they do provide insight in people's confidence in becoming self-employed.

These budding entrepreneurs are encouraged by a cultural support for entrepreneurship that has increased in Canada over the past twelve months. Using questions on the status of entrepreneurship, its suitability as a career choice and its coverage in the media, the Global Entrepreneurial Monitor developed the Cultural Support Index to measure changes in the perception of entrepreneurship in nations around the world.  The Canadian index increased by 15.3% between 2003 and 2004 suggesting the image of the entrepreneur has significantly improved.

The Canadian entrepreneurial picture however is not entirely rosy.  Even though Canadians admire entrepreneurs and recognize business opportunities and their own business talents, there has been an increased fear of failure.  In 2003 23.7% identified fear of failure as a barrier preventing them from starting a business. One year later this figure stands at 28.8%.  This increased level of fear raises some concerns among GEM researchers that the overall increase in entrepreneur activity in 2004 could be a short-lived turn around. If the fear of failing continues to rise they believe it will easily overshadow any opportunities Canadians may identified.

When entrepreneur activity is divided between nascent firms (less than one year) and new firms (less than 42 months) the picture becomes more troubling.  Between 2001 and 2003 the percentage of adult Canadians involved in launching a business dropped from 7.0% to 5.1.  As of yet 2004 data for Canada is unavailable.  It is highly unlikely however that the slight increase in overall entrepreneurial activity in 2004 significantly altered the trend of the previous 3 years.     

A closer look at this decline in new business launches reveals that the chill in entrepreneurial spirit was isolated to two provinces: B.C. where only 6.7% of adults were involved in launching a new business in 2003 (down from 9.8%) and Ontario where there was a decline to 3.8% of adults from 6.3% in 2002).  The rest of Canada actually saw slight, moderate or in the case of Atlantic Canada, dramatic increases.

The question all of this raises is why can’t Canadians translate their enthusiasm for entrepreneurship into real growth in entrepreneurial activity?  The GEM study offers a number of suggestions but the top three reasons cited as limiting entrepreneurial activity are funding, government policies and cultural and social norms. 

While business start-up costs vary widely depending on the nature of the business being launched, the GEM survey found that the average funding needed to start-up a business in Canada was $5000 (US). Entrepreneurs typically provide 65.8% of the start-up capital for their new ventures.  Informal investors most often provide the remaining 34.2%.  These are broken down as follows: close family relatives of the entrepreneurs (49.4%); friends and neighbors (26.4) other relatives (9.4%), work colleagues (7.9%), strangers (6.9%).

GEM researchers determined that countries with enough informal investment to fund 40% or more of all of its nascent entrepreneurs probably had sufficient resources.  Using this benchmark Canada had a more than adequate supply of informal investment in 2004 with funding available for 46% of new businesses.

In face-to-face interviews with experts on entrepreneurship in Canada, the GEM study found that rather than informal financing it was access to formal capital such as equity financing, debt funding, government subsidies, and venture capital funding that was potentially a barrier to entrepreneurial growth.  There was however no consensus on this issue.  Of the experts interviewed only 15% actually considered it a barrier, while 8% regarded access to capital as a positive aspect of starting a business in Canada. Only 11% of the experts considered it to be a factor that required immediate attention.

Government policies also generated a mixture of responses from the experts.  Only one in five experts interviewed considered Canadian government administrative demands and tax regulations as a negative drag on entrepreneurial activity.  While this is an increase over the opinion of previous years and demonstrates a sinking confidence in government small business strategies, it is not seen as an overriding issue stifling entrepreneurial activity.  13% even saw it as a positive contributing factor.

Of course all of this leaves us without any definitive explanation as to what ails the Canadian entrepreneurial spirit.  One final factor to consider is the motivation behind entrepreneurial activity.  In 2001 when overall entrepreneurial activity in Canada was 11%, one third of those active were motivated by necessity – those involved in entrepreneurship because they have no better option for work.  In 2002, 2003, and 2004 when overall entrepreneurial activity slipped to the 8% range, those involved in “necessity self-employed” dropped by more than half to 12%. 

In other words, it appears the principle reason for the drop in overall entrepreneurial activity in Canada was not that the entrepreneurial spirit had been stifled in someway but rather less Canadians felt there was no other option for employment.  The void left by these reluctant entrepreneurs was not replaced by an increase in those motivated by opportunity. 

The GEM study found that the factor cited most by experts (26%) as limiting entrepreneurial activity in Canada was “Cultural & Social Norms”.  Yet at the same time a third of the experts had the opposite opinion and actually thought that Canada had a good social and cultural environment for fostering entrepreneurs.  How can it be both ways?   The explanation offered by the GEM researchers for these divergent views was that some experts were comparing the US business culture environment to Canada’s and seeing Canada in a deficit while others were making a more global comparison and rightly considering Canada to be in a positive position.

This makes perfect sense when you compare Canada to the G7 nations. Canada (8.8%) is second only to the U.S. (11.3%) in entrepreneurial activity and well ahead of third place U.K. (6.3%). 

The biggest impediment to the growth in Canadian entrepreneurship appears to be a fundamental characteristic of the Canadian psyche: we are not risk-takers.  We recognize market opportunities.  We know we have the skills to seize them.  And when push comes to shove – that is self-employment is the only option for employment - we can rival our southern neighbors in entrepreneurial eagerness.   But under normal circumstances Canadian caution rules.  The fear of failure trumps the desire for success.

The Canadian entrepreneurial spirit is not dying.  Our dreams and aspirations as well as our talents definitely exist.  We just need to light a fire under ourselves!

For further insights into the Canadian and Global entrepreneur see the full GEM reports:

http://www.gemconsortium.org/

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MSN Search Now a Reality

It is official! Google now has a rival in its own league.  After two years of development the new MSN Search was officially launched this month.  Dumping Yahoo! as its search partner MSN Search now relies entirely on its own technology effectively creating a new player in the search engine market.  This means there are now four principle search engines offering their own uniquely sourced indexes of the “relevant web”: Google, Yahoo, Ask Jeeves and MSN Search. 

My initial impressions were good. The search page http://search.msn.com has a clean “Google” feel to it.  By clicking on the top tabs you can focus your search on the web, images, news or Microsoft Encarta (Microsoft’s Encyclopedia). 

This last option makes it easy to find quick facts about a variety of topics.  For example I typed in “Ottawa population” and clicked on Encarta and in 0.19 seconds I was given the following result: Ottawa Ontario metropolitan area 1,128,900  (2002) as well as a second link to an extended citation on the city.

A similar search in Google gave me the following site description “The fourth-largest urban area in Canada, the Ottawa Region and its outlying municipalities have a combined population of 1,056,000” as well as the link: http://www.ottawakiosk.com/people.html

The second link in the Google results list was to Ottawa Population and Demographics (Ottawa, KS) (Who knew there was an Ottawa City in Kansas?  Population 11,921.)

In this one example I would give the nod to the MSN Search but overall I found comparable results from both search engines.  This is not good news for MSN Search as it runs the risk of becoming an “also ran”.  Most Internet Researchers are notoriously loyal to their search engine with a third using the same search engine “all the time” and another 45% using the same search engine most of the time. 

Moreover the Canadian market is a particularly tough nut to crack where Google has a dominant hold on search market share claiming 62% of all searches compared to 36% in the U.S. 

To distinguish itself from its rivals MSN claims to offer more up-to-date information refreshing its index every two days rather than the industry standard of two weeks.  It also has integrated advanced search features so you can “beef up” your search from the main screen.  (In Google you need to click on a separate advanced search link.)  MSN allows you to simply type your search terms into the search text box, and then click Search Builder to access a variety of advanced search options. 

For those new to advanced searching, the layout is fairly straightforward and in a matter of moments MSN helps you to create complex search criteria that will ensure better results. If you are already an “accomplished searcher” and use Google special commands in your queries, you may find the MSN search builder cumbersome and awkward.

Another fun MSN Search feature – yes it is possible to have fun while searching! – is their use of slide bars to determine how you want your results ranked.  You can focus by three separate criteria: 

1. Ranked by currency of website (static web sites vs. updated regularly) 

2. Ranked by popularity of website (very popular vs. less popular)

3. Ranked by relevance to your search (approximate match vs. exact match)

Similar to the equalizer controls on your stereo you slide the bars up and down to establish the best “mix” of ranking criteria to meet your needs.  You can drastically change the first page of your search results by altering these slide bars. 

The one complaint I had about this feature and all the integrated advanced search features is that you get the feeling you will be able to easily refine your search with the same tools if you do not get the results you want.  Unfortunately that option is not provided.  I had hoped to find a link similar to the “Search within results” link at the bottom of the Google search results page. However one was not readily apparent in MSN Search.