According to the new annual report of the Global Entrepreneurship Monitor (GEM), developed by professors from the University of Quebec’s School of Management at Trois-Rivières (UQTR), the rate of emerging entrepreneurs in Quebec in 2021 reached a record high.

The proportion of companies that paid wages for less than 41 months rose to 17.6%. That’s a jump from a 2020 low of 12.1%, the lowest rate since 2015 due to the pandemic. In 2013, the first year of these annual reports, the province’s emerging entrepreneurship rate was just 9.5%. This increase is due to the creation of new companies.

The end of the health crisis was obviously beneficial for the youngest SMEs, which were even able to do well, as 65.4% of them said that thanks to the pandemic, they were able to take advantage of more opportunities.

Accelerated digital transformation

The pandemic has also fueled the adoption of digital tools by Quebec entrepreneurs, according to UQTR researchers.

“Digital technologies have been an important part of entrepreneurial thinking since the company was founded,” explains Professor Étienne St-Jean in a press release. But since 2020 we can see that digital transformation is becoming a priority and is at the heart of multiple business models. The pandemic has increased the intention of aspiring entrepreneurs to make greater use of digital technologies in the future.”

Among incumbent entrepreneurs, 42% say they want to improve their company’s existing digital technologies.

sustainability issue

Despite the rise in the established entrepreneur rate, which has halted its gradual decline to 5.8%, sustainability is still the Achilles’ heel for Quebec’s young entrepreneurs. Quebec ranks 12th among the 24 OECD countries surveyed and ranks 2nd in 2021 behind the rest of the country, which has an entrepreneurship rate of 8.9%.

However, takeover is a popular way in Quebec to access entrepreneurship and keep an existing SME alive.

The report shows that Quebec’s business transfer rate was 44.3% in 2021, compared to 36.7% in 2020. This increase differs from the situation in the rest of Canada, where the transfer rate rose to 27.6% in 2021. has leveled off.

“The sustainability of emerging companies remains one of the most worrying issues for the vitality of Quebec’s entrepreneurial ecosystem over the long term,” says Professor Marc Duhamel of UQTR. For several years, GEM findings have suggested that the dynamics associated with acquisitions allow companies to benefit from new entrepreneurial impulses that ultimately fuel their growth, development and sustainability.

lagging behind in sustainable development

For the first time, the Global Entrepreneurship Monitor consortium has evaluated the sustainability commitment of entrepreneurs. However, Quebec lags behind the rest of the country in this area. They’re just as motivated to make a difference, but only 58.9% of Quebec respondents want to prioritize social environmental impact over profits, compared to 68.8% elsewhere in the country. This ranks Quebec 9th among OECD member countries in this category, while the rest of Canada ranks 5th. The Quebec researchers remain optimistic, however, as the rising generation is more concerned about sustainable development than established entrepreneurs.

“The good news is that most entrepreneurs in Quebec are aware of the importance of considering social and environmental aspects in their business decisions, whether they are new or established,” explains Professor St-Jean. Certainly there is still work to be done and awareness at this level, particularly to increase rates relative to the rest of Canada, but more sustainable business models are emerging and leading the way for others.

This 2021 report is the ninth edition of the State of Quebec Entrepreneurship under the GEM. Including the rest of Canada, the study compares 23 other OECD countries to the province, including the United States, France, the United Kingdom and Germany.