Invest in Canada

Recessions breed new generation of entrepreneurs

by investor on 24/03/09 at 12:08 pm

Despite the economic gloom and waning confidence in corporate Canada, young people, fuelled with ambition, are choosing to take a risk and launch their own business.

Organizations that provide resources and funding report a marked increase in applications and interest by prospective entrepreneurs.

“Many from my generation tried to break into large organizations like our parents did, but found we weren’t going to have the same job stability,” says Dawn Deane, who quit her fledgling career with a major bank to open a Montessori school in Whitby, Ont., last fall.

“You know that at any time you can be given a pink slip, especially in this economy so with this unrest and having the rug pulled from underneath us has made it easier to take a risk and the risk that’s associated with becoming self-employed is actually less than putting all your eggs in one basket and committing to corporate Canada.”

Ms. Deane had mentoring and support from the Canadian Youth Business Foundation (CYBF), which has seen a 68% increase in applications within the first fiscal quarter this year.

Likewise, the Impact Entrepreneurship Group is flourishing since the economy soured. “There’s been a significant increase in interest,” says Kunal Gupta, who founded Impact in 2004 while attending Ontario’s University of Waterloo. “There are opportunities in the market for young entrepreneurs that would not be seen in a good economy.”

Mr. Gupta, who launched Polar Mobile after he graduated, a company that develops a proprietary content and advertising platform for mobile devices, still serves as chairman of Impact’s board and says the breadth of students participating has grown to include those from arts and other studies outside business.

In the past year, Impact – which bills itself as Canada’s largest, non-profit student-run organization – opened offices in Calgary and Vancouver. Its programs target university and high school students and include a national annual conference, an entrepreneurship week campaign, a leadership summit and a Microcredit Competition that gets underway later this month for which teams of students from 200 high schools receive $100 to launch a business idea and make as much money for charity as possible within a week.

The organization has acquired the support and sponsorship of corporate leaders and entrepreneurs who pioneered successful businesses in Canada.

Alex Shipillo of Vancouver, heads Impact’s Microcredit Competition and co-founded Youth Canada to help high school students navigate university scholarship programs. The two groups amalgamated in 2006 to promote entrepreneurship to young Canadians.

“This is the first recession of my lifetime,” says Mr. Shipillo, who plans to start a business after graduating from university. “There’s no longer any guarantee we’ll get a good job after university.”

Ray Cao started EightyTwenty Group, a software company that is poised to double its staff in the coming months. He served a term as president of Impact while studying at University of Waterloo and remembers a survey of high school students Impact conducted to assess their perception of entrepreneurship; 70% responded it was a path of last resort for those who had dropped out of school or failed to find jobs.

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