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The Small Business Myth
Electioneers like to push the meme that in Canada "80% of jobs are created by small business". The table attached from StatsCan does not bear this out so precisely. According to StatsCan's use of the North American Industry Classification System (NAICS), it's actually 70%. The additional table shows the most recent breakdown of the currently employed and 65% of us work in the private sector. So, if my understanding is correct then the 70% of our workforce that have jobs created by "small business" reflects 70% of the 65% of us who are employed in the private sector ie: 45% of us in the private sector owe thanks to the small business employer. Write me if I have made an error in the math. |
The next problem is defining a small business.
Currently the NAICS defines size as:
A small business therefore can be one that employs at least 1 person and as many as 99 depending on the other qualifiers. That's a big difference. We all know that showing up for work in an office of 1, 2 or 3 people is a much different business experience than one that hires 49 or 99 workers. Not only that but a 3 person Canadian "small business" in the software sector could very easily compete with medium sized software businesses (100 to 499 employees) simply by using code and script writers offshore in low labour cost jurisdictions to do the grunt work and not have to pay Canadian labour costs. Or if you prefer, there is a big difference between a business that can replace labour with machines (hardware and software) and a business not as easily automated.
As software consumes the world and artificial intelligence reduces the need for expensive labour, the trend will continue to shed employees moving more of us into small business.
So when someone says 80% of jobs in Canada are produced by the "small" business sector, it does not mean that 8 out of those 10 employees have a personal relationship with the owner.
One more thing; the table at the top of the page is 2012 data published by StatsCan. Hey Canada this is the eve of 4Q 2015. Can we please get fresher data collected and published in this country?
#OPENDATA - THIS CITIZEN'S DREAM: It would help if Government Agencies had open to the public online databases updated in real time as transactions get tabulated so that the private sector could produce unbiased market analysis. If we want a society able to make better decisions we need better access to data. Write your Member of Parliament.
Currently the NAICS defines size as:
- Small = 1 to 99 employees
- Medium = 100 to 499 employees
- Large = 500 or more employees
A small business therefore can be one that employs at least 1 person and as many as 99 depending on the other qualifiers. That's a big difference. We all know that showing up for work in an office of 1, 2 or 3 people is a much different business experience than one that hires 49 or 99 workers. Not only that but a 3 person Canadian "small business" in the software sector could very easily compete with medium sized software businesses (100 to 499 employees) simply by using code and script writers offshore in low labour cost jurisdictions to do the grunt work and not have to pay Canadian labour costs. Or if you prefer, there is a big difference between a business that can replace labour with machines (hardware and software) and a business not as easily automated.
As software consumes the world and artificial intelligence reduces the need for expensive labour, the trend will continue to shed employees moving more of us into small business.
So when someone says 80% of jobs in Canada are produced by the "small" business sector, it does not mean that 8 out of those 10 employees have a personal relationship with the owner.
One more thing; the table at the top of the page is 2012 data published by StatsCan. Hey Canada this is the eve of 4Q 2015. Can we please get fresher data collected and published in this country?
#OPENDATA - THIS CITIZEN'S DREAM: It would help if Government Agencies had open to the public online databases updated in real time as transactions get tabulated so that the private sector could produce unbiased market analysis. If we want a society able to make better decisions we need better access to data. Write your Member of Parliament.
Snippet from "The Robotics Revolution:
The Next Great Leap in Manufacturing"
The Next Great Leap in Manufacturing"
- Robotics use is reaching the takeoff point in many sectors. The share of tasks that are performed by robots will rise from a global average of around 10 percent across all manufacturing industries today to around 25 percent by 2025. Big improvements in the cost and performance of robotics systems will be the catalysts. In several industries, the cost and capabilities of advanced robots have already launched rapid adoption.
- Adoption will vary by industry and economy. Among high-cost nations, Canada, Japan, South Korea, the UK, and the U.S. currently are in the vanguard of those deploying robots; Austria, Belgium, France, Italy, and Spain are among the laggards. Some economies, such as Thailand and China, are adopting robots more aggressively than one might expect given their labor costs. Four industrial groupings—computers and electronic products; electrical equipment, appliances, and components; transportation equipment; and machinery—will account for around 75 percent of robotics installations during the next decade.
- Manufacturing productivity will surge. Wider adoption of robots, in part driven by a newfound accessibility by smaller manufacturers, will boost output per worker up to 30 percent over the medium term. These gains will be in addition to improvement from other productivity-enhancing measures, such as the implementation of lean practices.
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