Fraser Institute author says change is needed amid aging population
Small businesses make a up a smaller share of Canadian startups now than they did in the eighties.
That’s one of the findings of a new book from the Fraser Institute which reveals that small business startups—as a percentage of all small businesses—fell sharply from 24.5% in 1984 to 12.8% in 2014, a decline of almost 50%.
Why? Partly because of our aging population says Steve Globerman, Fraser Institute senior fellow and contributing editor of ‘Demographics and Entrepreneurship: Mitigating the Effects of an Aging Population’.
The peak age for entrepreneurship is between 25-49 years but while this sector’s share of Canada’s population was 40.1% in 1995, by 2015 it was down to 33.7%.
It gets worse, with 25-49 year olds forecast to be just 29.3% by 2065.
“Entrepreneurs drive innovation and technological advancement, but as Canada’s population ages, there are proportionately fewer entrepreneurial risk-takers, which can have negative effects on the economy,” says Globerman.
What can be done?
The demographic makeup of Canada may be a tricky one to change but Globerman says that there are things that governments can do to encourage entrepreneurship.
This could include tax incentives such as lower personal and business rates; and eliminating capital gains tax. Reducing regulations to cut barriers to starting a business could also help.
“In light of the greying of our citizenry, it’s incumbent on policymakers to create better incentives for entrepreneurial risk-taking to spur innovation, technological advancement and ultimately create more opportunities and prosperity for all,” Globerman says.
