An interesting conclusion is that Canada has its fair share of fast growing new entrepreneurial firms but that over time, a number of factors such as risk aversion, low export activity, and weak R&D activity stifle growth.
The results for risk aversion are interesting and are based on a survey of executives and perhaps help to explain lower levels of investment. The report also references a 2006 CIBC survey of small business owners that suggests that the issue may also be related to a higher priority placed on balancing wealth creation with other lifestyle choices. US entrepreneurs were more likely to say that wealth creation alone was their primary motive. The report concludes that both factors are at play; attitudinal differences may affect the growth in demand for financing but there is also less risk capital readily available. Early stage businesses in Canada can only access 35% of the funding available to US start-ups.
The report suggests that Canadian business is less innovative. They discuss the business life-cycle and suggest that managers in Canada are not quick enough to address decline let alone to engage in "creative destruction” and to re-invent and re-invigorate their businesses.
The issue of creative destruction and the suggestion that Canadian businesses are less innovative are areas that warrant further investigation.