In 2004, according to a study conducted by the Global Entrepreneurship Monitor, 32% of the Canadian population between the ages of 18-64 indicated that fear of failure would prevent them from setting up a business, compared to only 18% in America. American culture celebrates risk taking and reinforces the belief of rising from rags to riches. It rewards self-starters and oddballs by allowing them to fail and then giving them a second and third chance, because Americans understand the need to go through failure to be successful. In Silicon Valley, failed startups are worn as badges of honour, at the front of executives’ résumés. Canada, on the other hand, is optimized for the middle-class therefore suppressing the out of the box thinking necessary for entrepreneurs to succeed. The greatest entrepreneurs are risk takers, but last year, Deloitte, one of the big four service firms, found that “American executives were, on average, 18% more tolerant of risk than their Canadian counterparts”. Like the Global Entrepreneurship Monitor’s study, Deloitte’s study highlights a fear of failure deeply rooted in Canadian culture. Canadians are increasingly risk averse and when they fail, as most are sure to do, they will not be given the opportunity to start over again. Entrepreneurship is not a dirty word, but let’s face it it is not a valued career option as less than 30% of colleges and universities have promoting entrepreneurship as an institutional objective according to Industry Canada. The reality of Canadian entrepreneurs can be summed up in a research paper by the two university professors. The paper explains:
“… For Canada, the entrepreneur, although necessary for economic development, is a dangerous outsider, a greedy, shady and selfish transgressor of social norms. Failure is a just punishment in Canada, and a risk well worth taking in the U.S.”
In Canada, business failure is akin to moral failure. But it doesn’t have to be this way. For the last eight decades, Silicon Valley has forged an entrepreneurial culture of risk taking that turns whizzy ideas into profitable businesses. The sooner Canada can overcome its stigma of business failure and embed the freedom to fail in its culture, the sooner Canada will achieve the Valley’s entrepreneurial success.
Rebuilding a culture to foster entrepreneurship will require a unique approach. As culture and attitudes are rooted in youth, starting in primary school throughout high school, students should develop new attitudes towards risk, innovation and entrepreneurship. At both the high school and university level, we could offer courses to teach the business and cultural aspects of entrepreneurship. Teacher colleges should offer training in their curriculum and Universities should encourage their faculty members to take leaves of absence to start or join startup companies. Another step would be to create an independent organization to support high growth entrepreneurs and increase the number of high growth companies. Its mandate should be focused on increasing the social awareness of entrepreneurs in Canadian society, as well as partnering and collaborating with entrepreneurs. It will need to teach them how to succeed, help them get financing and help them develop business plans. Promoting the freedom to fail, whether in schools or in communities, should also be its responsibility. An example of such an organization is the Next 36 initiative, which takes 36 of the country’s brightest young students. The program gives these students academic training along with practical projects and allows them to interact with people who run big businesses. The students are also given $50,000 in seed capital and must then come up with ideas, test the market, and create their product. But what the Next 36 initiative does especially well is that it gives the next generation of Canadian entrepreneurs their first taste of both success and failure.
To conclude, the lesson here is very simple, but it is all too often overlooked. Before educational reform or a new partnership has effect, Canadians will need to acknowledge that their culture does matter, and that we do have a problem with failure. In doing so, Canada must strive to make entrepreneurship socially acceptable by shifting its culture to champion the man starting out, rather than the man who made it. The reason for doing so is simple. Only when we help them succeed, can entrepreneurs help you and me.