How can Canada close its productivity gap with the United States? How could Canadian businesses ensure their long-term growth? A look at the facts can help us answer these questions. Canada has one of the highest rates of new business entry in the world. However, our companies stop growing after five years. The result: every hour of work in Canada now generates $13 dollars less than in the United States and $29 less than in Norway.
That productivity gap has been steadily growing over the years and is threatening our prosperity and standard of living. Such a gap could also mean that our children would be the first generation of Canadians to experience a lower standard of living than their parents'.
Why do our businesses stop growing after five years? It could be because they stop investing and taking chances. Businesses also appear to become complacent over the years, avoiding risk at any cost and protecting what they we have; "gazelles" then become "water buffalos". To help Canada close its productivity gap, Canadian entrepreneurs need to fundamentally change the way they run their businesses. Among other things, they need to invest in innovation and access new capital, expose themselves to the pressures of international markets and think differently about how securing new human capital.