Politicians around the globe seem to go on and on about small businesses but in Canada they do so with good reason. You see – small business is the backbone of the Canadian economy.
Of the 11.6 million people employed in the Canadian private sector, 90.3% of them are employed by SMEs (Small and Medium Enterprises). If you look at the numbers behind this it means that around 10.5 million people in Canada are employed by SMEs. If we look at the wages this generates it paints an interesting picture:
Taking an average wage of around $50,000 and apply that to the numbers employed by the private sector, the wages generated by private sector SMEs totals a whopping $525 billion. (Article continues below)
Defining SMEs in Canada
In Canada, an SME can fall into one of two categories – a small enterprise or a medium enterprise.
A small enterprise is defined as a company with between 1 and 99 paid employees whereas a medium sized enterprise is defined as a company with between 100 and 499 employees. Once you get up and over the 499 then an organization is classified as a large business.
These large businesses, although they get the majority of focus in the press, only contribute to 9.7% of private sector employment in the country.
In fact, SMEs create around 100,000 jobs per year in Canada.
Improvements to be Made
While small businesses contribute significantly to employment, there is progress to be made in terms of innovation. In fact, only 1 in 4 SMEs invests in research and development.
However to put this into context, it is important to understand that almost 1 in 5 SMEs in Canada is classified as a retail business. With R&D perhaps not being as prevalent amongst small retailers the figures begin to become more palatable.
Also, looking at the positive side of things, within this 25% percent of companies investing in R&D there are some really interesting and innovative start-ups.
Companies like League that uses new technologies to provide a modern, digital alternative to traditional health insurers or companies like Zoocasa who are using technology to disrupt the real estate industry.
Small Business and Exports
Small businesses are not just happy to focus on the Canadian market alone either.
Many of our small businesses are now venturing out into the world to spread the word about Canadian business.
In fact, SMEs contribute to around 25% of our total exports.
Be Proud of Our Small Businesses
It’s time to stand up and recognize the achievements of our SMEs throughout Canada. These wonderful figures show how entrepreneurial we are as a nation. Recognize it, be proud and maybe even try something yourself.
Do you have a small business based in Canada? If you think our customers could benefit from your services drop us a message on Twitter or Facebook and we will share the best ones with our readers and customers.