Small business has been referred to as the engine that drives the economy. Despite the dependence on the oil and gas industry and the large corporations that are involved in the oilsands, the vast majority of Alberta businesses are small businesses, and they play a huge role in the province’s economy.
Small businesses are defined as those with fewer than 50 employees, and this likely applies to most businesses in St. Albert. According to the report Small Business, Big Impact Alberta Small Business Profile 2011 published by the Government of Alberta, about 96 per cent of Alberta’s businesses are classified as small business. They employ more than 33 per cent of all private sector workers and contribute 30 per cent of Alberta Gross Domestic Product (GDP). From 2000 to 2010, more than 19,000 new small businesses were created, a 15-per-cent increase.
The report suggests: “In many ways, small businesses serve as the vital grease that keeps the gears of Alberta’s economy turning smoothly – supplying goods and services to larger enterprises. Highly adaptive and resilient, small businesses often fill important niches and roles that larger businesses cannot.”
Of the 144,396 small businesses in Alberta, about 63 per cent have only one to four employees. (These figures do not include self-employed individuals, as they don’t have paid employees). Alberta has the highest number of small businesses per capita in the country. There are 39 small businesses in this province for every 1,000 people, whereas the Canadian average is 31 small businesses for every 1,000 people. The prevalence of small businesses is reflected across all sectors of the provincial economy, with at least 88 per cent of businesses in every industry sector being deemed small! Surprisingly, small business makes up 95 per cent of all oil and gas drilling and service firms in Alberta.
Despite the recent economic turmoil, small businesses in Alberta remained relatively constant, while larger businesses were hit hard by the downturn. Local businesses continued to employ your neighbours or perhaps even some of your family members, while big business went into lay-off mode.
Although it appears the Capital Region has the lowest percentage of small businesses as compared to total businesses, it is believed that the majority of businesses in St. Albert will be in the small business category. Many St. Albert small businesses are successfully competing in the global marketplace.
Why is this important to St. Albert? Typically small businesses owners (and most of their staff) live in St. Albert. They give back to the community and keep their profits within the province/city. On the other hand, large corporations are usually run from a head office located outside the province or the country, with decisions often made on ‘the bottom line.’ When asked, most St. Albert business people will explain their reason for establishing in the city – because they live here! They are loyal and committed to the City of St. Albert and want to contribute to the overall well-being of this great city.
In the economic development profession, it is well understood that 80 per cent of growth will come from businesses and residents already in the community. These could be new small business start-ups, businesses growing within the incubator spaces, or an existing business expanding market share, new products or services or simply morphing into new ventures. Yet most of the economic development focus is on chasing after the elusive large corporations to bring jobs and taxes into the community. What would you want your community to invest in, keeping the local small business base or flying around the country to find a large corporation that is likely being wooed by many other municipalities?
St. Albert’s economy can be built on the dreams, adaptability and resiliencies of small businesses and entrepreneurs. As residents and consumers, we should be supporting our local small businesses whenever possible, and we can benefit from their giving back to their home community.
