Navigating Canada’s scale-up landscape

Navigating Canada’s scale-up landscape

A summary of the Into the Scale-up-verse report, exploring Canadian scale-up activity in Canada
Navigating Canada’s scale-up landscape
Jessica Thomson
Marketing and Communications Specialist
Azana Hyder
Business Development Associate
Viet Vu
Senior Economist
Steve Denney
Research Collaborator
December 10, 2021
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In partnership with the Innovation Policy Lab at the Munk School of Global Affairs & Public Policy, the Brookfield Institute for Innovation + Entrepreneurship leveraged the most recent and detailed dataset concerning Canadian business dynamics to unravel complex scale-up behaviour in Canada. Our new report, Into the Scale-up-verse, challenges how scale-ups are defined and measured in Canada and unpacks the nuanced and varied ways that scale-ups contribute to the Canadian economy. This report has the potential to inform economic policymaking, along with conversations that can better equip Canadian firms to harness the immense power they hold in securing long-term economic sustainability and prosperity.

What does Into the Scale-up-verse teach us?

Not all scale-ups are the same. Into the Scale-up-verse provides the first national and sub-provincial breakdown of scale-up activity in Canada and offers a deep understanding of the roles different types of scale-ups play in boosting productivity, employment, exports, and R&D. The report provides the baseline metrics and guidance that academic researchers, industry actors, and government policymakers need to better inform supportive policy for scale-ups in Canada.

Scale-ups are rare but impactful. Only 1 in 100 young firms will reach scale-up status within their first 10 years. Despite their small population, however, the contribution that these scale-ups make to Canada’s economic growth is substantial and invaluable. We’ve pulled some of the key insights from the report to summarize the importance of these high-growth firms.

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1. Scale-ups drive the majority of productivity growth in Canada. 

There is little doubt that scale-ups are integral to Canada’s long-term economic sustainability, with firms in many industries experiencing productivity growth in excess of 25% in a single year.

2. Scale-ups are leading contributors to increased employment and job quality in Canada.

Scale-ups employ ten times the number of people compared to non-scale-ups, and average pay at scale-ups exceeds non-scale-ups across almost all industries and economic regions of Canada.

3. Declining investment in R&D poses a risk to scale-ups reaching their full potential.

R&D investment has proven to be successful in ensuring a firm’s sustained growth. And although scale-ups are more likely to allocate funds to research and development relative to non-scale-ups, overall R&D investment is stagnating.

4. Scale-ups are more likely to export than non-scale-ups.

Successfully exporting is a sure sign that a firm has raised their growth ceiling, expanded their market reach, and bolstered their organizational sophistication. Scale-ups export at a frequency five to ten times higher than non-scale-ups.

Only around 1 in 100 companies meet the definition of a scale-up in Canada within their first 10 years. However, despite their rarity, revenue scale-ups attain revenue levels of at least 20 times those achieved by non-scale-ups, and employment scale-ups attain employment levels of at least five to ten times that of non-scale-up companies.

- Into the Scale-up-verse: Exploring the landscape of Canada's high-performing firms

What’s Next?

5. Scale-ups are too diverse and complex for a “one size fits all” policy approach.

Policies that target scale-ups are not necessarily accounting for the various types of scale-ups and their varying contributions to the Canadian economy. The new and comprehensive insights from the report, specifically the three ways that scale-ups are defined and measured, provide the first step toward equipping policymakers to better support scale-up diversity. There is also an important opportunity to continue expanding on this research with a specific focus on the precise role governments should play in building a more robust scale-up ecosystem in Canada.

For media enquiries, please contact Jessica Thomson, Marketing + Communications Specialist at the Brookfield Institute for Innovation + Entrepreneurship.

Jessica Thomson
Marketing and Communications Specialist
Azana Hyder
Business Development Associate
Viet Vu
Senior Economist
Steve Denney
Research Collaborator
December 10, 2021
Print Page

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