I was proofing our Bullets section for this issue, and noticed the item from the Fraser Institute claiming that Canada’s aging population is stunting entrepreneurship. According to the study, between 2004 and 2012, the rate of business start-ups in Canada declined by 16.2 per cent while the proportion of the population over the age of 65 increased by 15.0 per cent. Because other surveys have concluded that younger populations possess characteristics more conducive to enterprising activity, this survey concluded that young people are less likely to be given higher management positions and are, therefore, unable to obtain the skills needed to run their own businesses.
In the first place, this assumes in passing that management skills are based on workplace experience, and would-be shop owners need to work in management as a prerequisite to entrepreneurship. So let’s think about that. Most business schools claim to teach management skills, and they do so as an alternative to on-the-job training. Rather than pick a side, here, let’s just say this represents a significant controversy. Fraser says you need work experience; business schools say you need training.
Another option is that neither the business schools nor the Fraser Institute are correct. Many of the entrepreneurs I know or know of did not have time for either. They had an idea, and they had the drive. To present a common example, Bill Gates neither finished university nor did he work for others in management. Further, we all know wood-industry entrepreneurs that started multi-million-dollar companies in a garage or empty shed.
Still another option is the immigrant or the citizen that found him- or herself blanked by life’s options, out of money, out of work, out of a visible career path and so started making things to get by.
Therefore, the position of the Fraser Institute does not appear irrevocable. There are some questions unanswered. I am certain we can all think of non-entrepreneurs working in middle management that think they should be doing better and that ownership is holding them down. However, that does not make it true. One school of thought would suggest that if you feel you are not being treated fairly where you are, you should leave and start using your time to your own best advantage. The worst that can happen is that you can fail.
The Fraser Institute did identify the willingness to take risk as a function of entrepreneurs, which seems to be a fact. However, the Institute then turned around and said risk-taking is a quality of the young. They could be right, but it could also be the researchers are young, themselves, and equate risk-taking with recklessness.
The Fraser study ends up with one possible solution to the persecution of the young by the old. They suggest we revise the capital gains tax to inspire more young people to take risks.
I will grant that eliminating the capital gains tax has benefits, but most of those are offset by the riots the Occupy infantry would launch. Remember, none of them is in jail, none is an entrepreneur and all are still looking for something to do without working.
I am just not sure that young, risk-o-philiacs wanting to own their own businesses think that much about capital gains. Certainly, they someday intend to sell, but typically the “someday” is down the road.
For my money, people looking to own their own business should look into manufacturing in the wood industry. It is not easy, but it is possible, and many of our new immigrants have come here exactly for the dream of owning a company. You can’t easily own an insurance company, start a bank or buy a farm. You can, however, come up with an investment in some equipment and try to figure out how to avoid death by government with no experience and no training. It seems it is not the competition or oldies that do new businesses in. Taking advice from institutes might be right up there.