ABCtech #16 06APR14 Innovate to let small businesses grow

ABCtech #16 06APR14 Innovate to let small businesses grow

QuikTech Notes

06-APR-14

SAVE THE DATE

MOONLIGHT IN THE MEADOWS

JUNE 12TH

RESERVE YOUR FIRM’S HOSPITALITY SUITE NOW

Our survey of small technology businesses revealed much about what they view as important and what is impeding their growth. In response to the survey we have launched a series of SME site consultations across the province – April through September – VISIT www.ABCtech.ca/events    In addition, we are inviting editorials on subjects rated most popular in our survey of subscribers appearing at the end of this Note.  – Editor

Editorial.  Innovate to let small technology businesses grow by Jac van Beek, CEO, CMC-Canada  Visit CMC: Alberta for more about Jac van Beek’s visit to Edmonton – April 15th.

Maybe it’s time to let those who can help…..help.   A major conclusion of the recent survey by the Alberta Council of Technologies is that governments, financial institutions and multi-nationals are not effective mechanisms to grow small technology businesses. Rather, associations, incubators, research agencies, angel and venture capital networks and management consulting are cited as the most effective way to access needed marketing, manpower, management, networking and internal investment.

A look at the nature of business formation would provide ample rationale for such a conclusion.  There are three broad types of new businesses: promising start-ups, VC-backed ventures, and corporate ventures.  Each has a recognizable risk profile and operate with different drivers and constraints:

• Promising start-ups are high risk as they lack significant breakthrough ideas or technologies and thus are challenged to find significant outside funding, often working with low investment, high uncertainty compelling them to adapt to unforeseen opportunities and secure their resources through risk transfer and syndication
• Venture-backed start-ups pursue initiatives of medium uncertainty and size, choosing to work with verifiable human capital and often a good track record.  Aggressive investment return targets and a certain degree of impatience provide an incentive, while rigorous due diligence and internal control mechanisms provide sufficient boundaries to focus development
• Corporate ventures work within extensive checks and balances and are appropriately and adequately supported by the parent firm’s resources and talent

Turning a promising technology start-up into a large, long-lived corporation entails a radical transformation from high unpredictability and variable profitability to stable profits derived from many tangible and intangible assets, supported by deeply embedded capacity for coordination and integration.

The transformation from fledgling to maturity requires protracted, purposive investment.  Firms acquire a system of coordinated assets gradually, because capital constraints limit the size of individual investments and because it takes time to build customer relationships, know-how and other intangible assets.  Building long-lived firms involves the coordination of investments and efforts across functions and time.

Where should such support come from?  Most logically from experts and investors with an interest in building long term enabling relationships with intermittent, strategic interventions.

Many traditional business support mechanisms have limited capacity to offer effective support to emerging technology businesses:

• Governments have a long history of concentrated assistance at the macro policy level – risk is mitigated through forcing formative businesses to fit within the parameters of policy objectives whether or not it makes market sense
• Multinationals will develop their own ventures by their rules and using their resources
• Banks and financial institutions seek to limit their exposure to the inherent risks in new business formation by establishing conservative financial hurdles that are often unattainable by emerging technology ventures

Enabling policies and funding support for formative or emerging technology businesses should flow to micro level business oriented organizations such as member-driven associations, programs such as NRC-Industrial Research Assistance Program (IRAP), and research enterprises with robust commercialization and applied research programs (Alberta Innovates – Technology Futures), including universities and colleges.  These organizations often work collaboratively to serve emerging business.  For example, NRC-IRAP’s management advisory service (MAS) allows program officers to access accredited management consultants for the benefit of their clients because of a formal partnership with CMC-Canada, thus advising on technical and management issues – see http://www.nrc-cnrc.gc.ca/eng/irap/about/partnerships.html 

The more that enabling or support organizations innovate to address business gaps collaboratively, the stronger our capacity to nurture promising emerging technology businesses.

The Global Entrepreneurship Monitor (GEM) and associated webinar – April 9th

GEM Canada Report

The Global Entrepreneurship Monitor (GEM) is the largest and oldest study of entrepreneurship in the world. In 2013 it covered 70 countries. Canada has been absent since 2003 but is now back in. The unique aspect of GEM is that it focuses on the individual entrepreneur. Canada fares very well in this report. Some highlights:

• • The overall level of entrepreneurship in Canada (12.2) is very close to that in the US (12.7), and ahead of all other innovation based economies.
  • The general public has a very positive attitude towards entrepreneurship;
  • Almost all entrepreneurship in Canada is to pursue opportunities, rather than out of necessity;
  • Canada is unique among G7 countries in having the highest percentage of entrepreneurs pursuing business oriented services ( in the other G7 countries consumer services are bigger);
  • The 25-34 age group is most active in starting companies; that is lower than the US, which peaks in the 35-54 age group;
  • 8.7% of Canadian start ups are based on high or medium technologies, which ranks #3 in the G7;
  • In Canada the rate of entrepreneurship increases with educational level, up to an undergraduate degree;
  • A higher proportion of females are entrepreneurs than in most other countries; the rate is about two thirds that of men;
  • First generation immigrants have a slightly higher rate of entrepreneurship than the overall Canadian population, but second generation immigrants significantly less;
  • The level of entrepreneurship varies significantly across Canada, by almost a factor of two between the 7 provinces in the study;
• The well being of opportunity focused entrepreneurs is higher than that of the general population, but not as high as that of established business owners.

If you would like to learn more, you are invited to participate in the webinar that will launch the Global Entrepreneurship Monitor report on Entrepreneurship in Canada.  Please “hold the date”<spanarial”,”sans-serif””> April 9, 2014.  We will send detailed information how to connect closer to the date. You do not need to RSVP to join the webinar, but any comments or expressions of interest would be welcomed. Feel free to share with you colleagues.

Where & When:

Time: 11:00 am MT/1:00 ET

Date: Wednesday April 9^th 2014

Place: Webinar. Log in information will be sent closer to the date.

For those unable to join the webinar, we will post the complete 2013 GEM Canada report and the related PowerPoint presentation, on the following web sites:
THECIS   and GEM Canada at 11:00 am MT on April 9^th. 

In addition to the Canada report, there will be detailed provincial GEM reports available for BC, Alberta, Saskatchewan, Manitoba, Ontario, Quebec and Newfoundland. These will become available in the coming months.

Thank you

Peter Josty, PhD, MBA

Leader, GEM Canada Team & Executive Director,The Centre for Innovation Studies (THECIS)

Editorial topics rated by subscribers as most interesting

GROUP A. In order of interest

#4. Creative financing of SMEs – Emerging options for accessing capital

#5. Reality check – What to expect of each level of government and banks

#8. Networking for growth – How, why and where!

#2. Stemming Alberta’s entrepreneurial brain drain

#1. SMEs – Key to economic diversification

#9. First connectivity then capacity – Small business essentials for saving rural Alberta

#3 Talk less – think more. Listen to your customer!

#7. Working with multi-nationals – Or NOT?

#6. Stirring creativity – Strengthen the voice of independent NGOs

        GROUP B. In order of interest

#11. Selling more – Small business branding,communications and marketing

#13. Regional buying and selling groups – Benefits for small business

#17. Know your competition – Mergers and acquisitions for growth

#15. Get it for free – Engaging volunteers in growing small business

#12. Seconding consultants for managing growth – Pay for performance

#10. Scorecards for rating incubators and start-up centres

#18. Automating the knowledge channel – When machines aide and decide

#14. Public procurement – Feast or famine?

#16. The great divide – Inter-generational distrust and opportunities

Whasup with ABCtech – “Growing the future every day” – 2014

• Networking – “Moonlight in the Meadows” AGM/BBQ w/presentation June 12th re “The role of SMEs in economic diversification AND “Beta testing relationship and knowledge management apps as increased member benefits
• Communications – Periodic QuikTech Editorials and Special Edition releases AND ABCtech Media Productions’ US public radio launch re “The Next Question” featuring Alberta innovations and innovators
• Small business development – Completion of SME Survey AND conduct of follow-on panAlberta site consultations AND a final Report in the fall and launch of our 10th anniversary theme for 2015 -“Convergence & Creativity”
• Industry development – Consultation on the design and development of the Alberta Analytics Industry Centre supporting small technology business development AND Completion of an assessment of the status of fusion energy research and the socio-economic implications for Alberta
• Advocacy – ongoing for professional associations, NGOs and various levels of government

Get engaged, make a difference. We are seeking: complimentary editorials, co-hosts for site consultations, sponsored seminar topics, volunteers for a range of industry advisories, ideas and recommendations on benefits for new Members.

CONTACT info@ABCtech.ca