Better government support for immigrant entrepreneurs could benefit Canada‚Äôs efforts to diversify international trade and strengthen its economy, a new report by the Conference Board of Canada says.
Given the Canadian government‚Äôs growing interest in tapping emerging markets in Asia and South America, the report by the Conference Board of Canada‚Äôs National Immigration Centre says improving the success rate of immigrant entrepreneurs, especially those engaged in knowledge-based industries, is potentially in Canada‚Äôs best interest.
Immigrant entrepreneurs possess valuable education, language skills, foreign business networks and what the report calls ‚Äúimportant know-what knowledge‚ÄĚ of developing markets, such as emerging trends and consumer preferences.
‚ÄúEntrepreneurs with international experience (e.g. immigrants) are more likely to do business abroad ‚Äď and succeed,‚ÄĚ the report says.¬†This experience and skill set also puts them at an advantage over their Canadian-born counterparts.
The report points to studies that suggest a 10 per cent increase in Canada‚Äôs immigrant population corresponds with a one per cent increase in exports.
‚ÄúIf the latest figures are used, a 10 per cent increase in Canada‚Äôs immigrant population of 7.5 million people would correspond to an increase in merchandise exports by $5.5 billion,‚ÄĚ the report says.
Immigrant entrepreneurs, however, face a number of unique challenges that their Canadian-born counterparts do not, the report observes, including cultural barriers, weak social and business networks in Canada, difficulty accessing bank loans and financing and a lack of familiarity with available domestic and international business supports.
The challenges are most acute among immigrant entrepreneurs who have been in Canada less than 10 years.
The report cites a 2018 Statistics Canada study that found only 51 per cent of businesses started by recent immigrant entrepreneurs between 2003 and 2009 remained in operation for at least seven years, compared to 58 per cent of those started by Canadian-born entrepreneurs.
The Conference Board of Canada puts forward four key suggestions for improving the success rate of immigrant entrepreneurs and harnessing the potential of these typically educated and internationally connected immigrants for Canada‚Äôs trade efforts.
- Build networks for recent immigrant entrepreneurs;
- Enhance awareness of domestic and international business supports;
- Offer more dedicated settlement support programs;
- Improve access to financing.
1. Build networks for recent immigrant entrepreneurs
- Government and immigrant-serving organizations could provide more pre-arrival information on starting a business in Canada, including where to find business, settlement, and mentorship support once immigrant entrepreneurs arrive in Canada.
- Create databases to facilitate networking and mentorship opportunities and compile local business contact information.
- Make connections with business incubators and investors and get them more involved in recruiting immigrant entrepreneurs.
- Develop Canada‚Äôs business ecosystems in order to attract and support immigrant entrepreneurs.
2. Enhance awareness of Domestic and International Business Supports
- The federal government, through its Canadian missions, could provide better access to pre-arrival information on the types of business supports offered by Export Development Canada, Business Development Bank of Canada, Global Affairs Canada and Canada‚Äôs provincial governments.
- Promote stakeholder collaboration by working more closely with ethnic business associations, immigrant-serving organizations and ethnic media organizations.
- Create a one-stop portal to raise awareness about supports targeted to immigrant entrepreneurs.
- Raise awareness of international free trade agreements and market opportunities.
3. Offer more dedicated settlement support services
- Work with immigrant settlement organizations to help them develop dedicated services for recent immigrant entrepreneurs and facilitate interaction with Canadian-born and immigrant entrepreneurs.
- Provide sustained federal funding for settlement support services.
- Leverage technology such as webinars to keep costs down.
4. Improve access to financing
- Canada should consider co-funding arrangements that match investments in immigrant businesses by private equity investors.
- The federal government could provide targeted financing to immigrant entrepreneurs identified as having high growth potential.
- Improve bank loan process.
- Raise awareness of existing loan opportunities.