Canada has long been a strong business hub founded on homegrown resources, be it natural or business supply chain. To become a formidable top tier global innovator, Canada must do more. We must seize the opportunity to capitalize on our country’s unique ability to attract world-class talent through better engaging with our highly educated immigrants from all over the world – and actually putting their skills to real use from day one.

Going beyond the status quo to secure Canada’s competitiveness

We already take great pride in the ubiquitous, nostalgic, feel-good phrase: “Canada is a nation of immigrants”. We must, however, not let all that we have accomplished to date lull us into thinking the status quo is enough to secure Canada’s global competitiveness. Without addressing the realities of current and prospective immigrants once they are here, and pragmatically removing the barriers they continue to face today, that well-meaning sentence is too often reduced to a self-affirming box tick of a job done well; a job wrongfully considered as complete. 

Yes, immigration has played a significant role in shaping the Canadian society, economy, and culture.  According to the 2021 Census by Statistics Canada, almost a quarter (23.0%) of the population is, or has been, a landed immigrant. The same report also highlighted Canada’s beautiful mosaic of over 450 ethnicities and varied cultural origins, making Canada one of the most ethnocultural and linguistically diverse countries in the world; truly something to be deeply celebrated.

We thus cannot afford to overlook one simple yet undeniable fact: global markets require global thinking, and we have yet to fully tap into our unparalleled resource – our diversity. Canada’s economic prosperity requires our conscious investment in our immigrant founders

The critical key to unlocking Canada’s innovation future is targeted investment in immigrant entrepreneurs, and we are uniquely positioned to turn that key now.

We have top-tier global expertise and talent right here

One of the primary reasons why immigration has been understood as critical to Canada is that it brings in a diverse pool of talent, skills, and experiences.  Arguably, we get this from a social standpoint, but we need to understand what this means in business. It comes as no surprise to those paying attention that immigrant entrepreneurs all too often take a back seat when we count how today’s immigrants enrich the Canadian economy.

People are beginning to understand how immigrants bring international perspectives and solutions to Canadian domestic challenges, which can generate new technologies, more-tailored solutions, and broaden services to help accelerate Canada’s growing innovation economy.

The fact is immigrants bring with them a wide range of expertise and education from around the world, which helps them to not only drive economic growth in Canada, but lead innovation here too. The teams they are on get access to their international business networks, established supply chain contacts, and international perspectives on strategic systems.

Unfortunately, this conversation is all too often limited to an employee purview and diversity initiatives alone.  Little, if anything, is said about the specific impact immigrant business leaders have as entrepreneurs and founders in their own right.

Even less is said about their economic contributions, or about any of the tailored investment needed to help them build the next generation of Canadian companies. More needs to be done to ensure they are actually seen, heard, and consciously invested in, or we risk losing them outright.

Here’s why we need to invest in immigrant-led businesses now

1. Immigrant founders are critical to Canada’s technology and business ecosystems.

We need immigrants to lead innovation, not just to support labour. Sure, Canada’s economic prosperity relies on immigration, but many reduce that concept to meaning only for basic labour roles and entry level positions.  It comes up most often in discussions on how to stem the impact of the ongoing labour shortage. However, our immigrants are technological leaders, business creators, and subject matter experts.

In fact, in Canada, first- and second-generation immigrant founders represent just over a third (34.7%) of all early-stage entrepreneurship in the country.

They continue to play a vital role in the growth and success of many industries, especially in technological advancement, right across North America.

Canada’s future global competitiveness heavily depends on the country’s acknowledgment that we have work to do here, and an intentional investment to capitalize on the world-class talent, unparalleled grit, and lived expertise in both domestic and foreign niche markets our immigrant leaders bring to our table.

According to a 2022 report by the National Foundation for American Policy (NFAP), immigrants have started more than half (319 of 582) of America’s startup companies valued at $1 billion or more.

Additionally, nearly two-thirds (64%) of U.S. billion-dollar companies (so-called “unicorns”) were founded or cofounded by first- and second-generation immigrants. Highlighting and building upon these incredible large-scale contributions is vital in securing our nation’s global competitiveness.

2. Immigrants are more entrepreneurial and create jobs sooner.

Immigrants are more likely to start businesses than Canadian-born individuals despite being only a quarter of the population. Their efforts are undertaken not just out of sheer necessity on arrival, but often stem from a much deeper-rooted tenacity focused on building a brighter future for themselves as well as their families and communities at large.

A recent study by Statistics Canada showed that immigrant-owned firms in Canada are younger on average than those owned by Canadian-born entrepreneurs, which means they tend to get going sooner, grow faster and have higher rates of job creation.

This makes sense – our immigration system is rigorous, and to make it through the screening and stiff criteria to be here, immigrants must not only be highly motivated, but persistent, resilient, and able to handle a tremendous amount of stress, all while starting over somewhere entirely new. Many immigrants, by their very nature, come here with a deeply personal and necessary entrepreneurial spirit.

As a result, immigrant entrepreneurs represent a critical group of job creators in Canada, by stimulating greater economic activity in their local communities while also contributing to Canada’s overall economic growth.

3. Immigrant‑owed businesses are TWICE as likely to export to and grow in global markets.

In Canada, immigrant-led startups and SMEs have a higher export propensity and achieve twice the export growth than Canadian-born led businesses of similar size. This makes immigrant entrepreneurs Canada’s export trade “secret” engine, even though we have yet to fully put that pedal to the metal.

As a trading nation, exporting continues to play a critical role in boosting Canada’s economic growth and creating employment opportunities. Knowing that immigrant entrepreneurs can play a significant role in advancing Canada’s export trade ambitions, targeted support and investment in them should be at the forefront of how Canada builds its capacity for growth.

By simply being born and raised elsewhere, and with a heightened ability to work within the nuances of their own cultural and linguistic communities, immigrant entrepreneurs are generally more global-minded and directly connected internationally.

This helps in identifying new market niches and opportunities that may be overlooked by domestic-focused entrepreneurs. Their experience naturally allows them to more easily diversify export markets and reduce reliance on a single market or traditional trading partners.

The time to invest is now

Our population continues to rely on immigration to grow for the foreseeable future, particularly given the country’s aging population and population growth forecasts. It is paramount that all immigrants are well supported to enable them to meaningfully contribute to their full potential.

From coast to coast to coast, Canada is blessed with world-class immigrants who are a critical part of our population that cannot remain underemployed, underinvested, untapped and stranded.

As the global market for talent remains highly competitive and increasingly transferable, Canada needs to show the world that it is not only the destination of choice for highly skilled immigrants, but where newcomers’ skills and experiences will be fully engaged as part of an inclusive and prosperous Canada.

Bridging the investment capital gap immigrant founders face is vital

Venture capital continues to be instrumental in identifying and harnessing some of the brightest entrepreneurial opportunities to advance technology. An auspicious element to capitalizing on Canada’s growing immigrant population is creating targeted venture capital funds and tailor-made financing vehicles focused on intentional investing in immigrant founders.

This is a critical key to unlocking the next generation of innovation in Canada. If global innovation excellence is to be Canada’s future, then targeted venture capital investment is a crucial way through which we can seize the opportunity of today to build towards that future.

We stand at an important crossroads.

We either target investment capital to support our immigrant founders to usher in the next wave of global innovation or risk losing their expertise, proven tenacity, and unbridled grit to the countries already doing this work.

The choice is clear and highly consequential – Canada’s economic future literally depends on it.

Maybe the all too familiar refrain of last year’s uncertainty has dampened our competitive spirit as Canada realigns its economic identity.

However, there are strong reasons to remain genuinely optimistic about the major prospects of Canadian SMEs on the global stage in 2015.

The global momentum was building in 2014…

2014 was billed as the year of recovery for many advanced economies around the world, and thus the global economy.

Although the trajectory for recovery in 2014 fell short of many predictions, there was still a 2.6 percent global growth against the 2.5 percent growth seen in 2013. This marginal increase was a tangible sign of optimism for the years ahead.

In Canada, the projected real GDP growth and the declining unemployment rate, which was down to 6.7 percent by the end of 2014, were only a few of the indicators that showed we were at an economic turning point.

Though some dispute the strength of the Canadian economic recovery in 2014 given the marginal increase, the fact remains that the economy improved and the momentum was building coming into 2015. 

Then the price of oil dropped….

Reaching their peak in June 2014, oil prices had to come down.  Yet no one accurately foresaw the magnitude of oil prices’ prolonged decline.

The shocking free-fall dominated headlines across the globe, economic forecasts were overhauled, and investment plans were re-evaluated. Canada’s already slow-moving economic recovery was now facing internal conflicts as projected government surpluses came under serious threat.

Stephen Poloz, Bank of Canada’s Governor, even stated,

I think that this [fall in oil prices] is a setback [on] our path back to where we planned to go. It’s delaying things by perhaps as long as a year.

He then shocked many Canadians by cutting the central bank’s benchmark rate from 1 percent to 0.75 percent; making Canada the first G7 nation to make a major move in response to falling oil prices.

Plummeting prices (and sluggish economic recoveries in the EU and Japan) also left the World Bank with no choice but to lower the global economic growth forecast for 2015 from 3.4 percent to 3 percent.

There were losers and winners

The nose-dive taken by the price of oil has inadvertently left Canada, a major oil-producing nation, facing a win-loss dichotomy.  Though it remains too early in the game to assess the full impact, analysts are predicting major losses.

The numbers aren’t looking promising for heavy oil-producing provinces like Alberta, Newfoundland and Labrador, and Saskatchewan, where we expect a sharp fall in government spending and resource revenue, as well as declines in business investment. There is even the potential for massive job losses.

Leaders are undoubtedly going to have to call several timeouts to re-focus and strategize before we even reach the end of the first quarter. But the game is far from over.

In 2014, Canada’s exporters—particularly, non-energy exporters—had a good year that was stimulated by the low Canadian dollar. They’re poised to win again this year.

According to a recent economic outlook report by RBC Economics Research, we can actually anticipate higher export-growth this year than in 2014.

Last year, export was a key driving-force behind Canada’s recovery, and exporters are only going to gain speed in 2015 if they’re bold enough to seize the opportunities before them.

So far, our winners seem have ample game left to play.

Reasons to go global again

There is a surging appetite for Canadian innovations on the global market, especially in the manufacturing, automotive, ICT and agricultural sectors. This is creating an auspicious environment for Canadian small and medium-sized enterprises (SMEs) on the world stage.

To renew your go global strategy this year is a competitive move for Canadian businesses, but it’s also absolutely critical to Canada’s economic future, especially now that we know to expect significant cuts to government revenue due to the drastic decline in oil prices.  Here’s why: 

1. The momentum from the US recovery cannot be underestimated

President Obama, during his 2015 State of the Union Address, explained that

…after a breakthrough year for America, our economy is growing and creating jobs at the fastest pace since 1999. Our unemployment rate is now lower than it was before the financial crisis.

This is not just a promising partisan political statement, but a fundamental fact. As the world’s largest economy, America’s robust economic revival is not only good for our southern neighbors, but also a major catalyst to global economic growth.

The US housing market continues to improve, business investment is gradually picking up pace, and the decline in oil prices is actually boosting household income while simultaneously stimulating spending.

The international political and economic spheres continue to support the narrative that the US economy has rebounded.

Canadian exporters cannot afford to underestimate the plethora of opportunities this is creating. With that being said, global growth in 2015 and beyond cannot take full flight on the single engine of the US economy. But for Canada, this single engine seems to be garnering more-than-ample momentum to give us our own economic lift.

2. A World of Opportunity Beyond the US
The US will always be an important trading partner for Canada, but global trade patterns are changing. The call for Canadian exporters to diversify and venture into new opportune markets is louder than ever.

As the growth of emerging markets continues to outpace that of the so-called developed world, expansion of trade is a necessity in today’s highly competitive global market.

Despite lower-than-expected performances last year by high-growth emerging economies like China, Brazil and India, these markets, together with others like Mexico, South Korea and Indonesia, remain vital to Canada’s economic prosperity as a trading nation.

In 2005, looking beyond the BRIC nations (Brazil, Russia, India and China), before the inclusion of South Africa to form the BRICS , Goldman Sachs, introduced the notion of the Next 11 (N-11- Bangladesh, Egypt, Indonesia, Iran, Korea, Mexico, Nigeria, Pakistan, Philippines, Turkey and Vietnam), as the next set of growth markets.

While the Next 11 vary economically and geographically, they share common economic growth potentialities.

Although the four most prominent economies of the N-11—collectively referred to as the MINT (Mexico, Indonesia, Nigeria and Turkey) —may not exert the same impact as the BRICS , they are expected to rival the G7.

For example, Mexico is a market geographically positioned to benefit from the tailwinds of American economic growth.

According to the US Department of State, nearly 80 percent of Mexico’s total exports are to the US. Mexico is also the United States’ largest exporting market, after Canada.

As an emerging economy and a NAFTA partner, Mexico remains important to Canadian exporters with booming manufacturing and auto sectors, as well as increasing foreign direct investments. We have every reason to be very optimistic about Mexico’s growth potential.

Peter Hall, Export Development Canada’s Vice President and Chief Economist, even stated that

as the other economy that shares a border with the world’s growth engine, Mexico has had a banner year in trade. Thus far, exports are up 7.9 percent largely because of the US economy, and given the latter’s continued strength, Mexico’s exporters seem buckled in for another great year.  

The global opportunities and assistance you need are waiting!

Sanctioned countries excluded, these markets, together with other developing economies like Chile, Colombia, Kuwait, Ghana, Peru, and Zambia, are where Canada’s world of opportunities in trade lay for 2015 and beyond.

As our nation forges its path into both developed and emerging markets, it is critical for Canadian exporters to leverage the services of EDC, the Department of Foreign Affairs, Trade and Development (DFATD), Trade Commissioners and the government’s renewed commitment to international trade to take on opportunities to gain competitive advantage for themselves. By doing so, they can help make significant contributions to Canada’s economic prosperity at home.

Are you planning to rethink your global strategy this year?