Small business fills tall orders in Saskatchewan.

For the last 15 or 20 years, small business supplanted big business as the backbone of the world's market economies.

At one time, every jurisdiction scrambled to secure the next mega-project as a catalyst to pump added life into its market. But those days are long gone and it's small, not big, that is beautiful when it comes to fueling the economic engine.

Small, not big, business is where the jobs are being created. For that reason, governments have focused their programming to assist the formation and development of new enterprises. One-stop centres dispense business support and guidance, providing a single window for the would-be entrepreneur. In tribute to the job generation and economic clout of small business, a week is set aside each year in its honor. You've probably never heard of national big business week and you likely won't.

And, best of all, anyone can start a small business. Starting a big one well...that's just not the way it's done.

So, just how many small businesses does Saskatchewan have?

Although numbers like 50,000 get kicked around, no one has an absolutely definitive number. First of all there's the definition of a small business. In the U.S. a small business has up to 500 employees. In Canada it's more like 100. In Saskatchewan, the government officially pegs small businesses as enterprises with fewer than 50 employees and sales of less than $5 million annually.

Secondly, businesses, particularly small ones, come and go so keeping track of them is more of an art than a science. Besides, not every business start-up comes complete with all the paperwork and registrations so while it may be operating, it may not be recorded in an official registry.

But one thing is for sure...small business is the next best thing to godliness in this day and age.

So much so that both the provincial government and the Saskatchewan Chamber of Commerce have set targets for new business start-ups as priority issues for this province as it approaches its 100th birthday.

Both the Chamber's Action Saskatchewan document and the provincial government's Partners for Prosperity (PFP) plan have set a goal of 7,500 new business start-ups annually.

Chamber president Larry Hiles says the Action Saskatchewan strategy contemplated two sources of job growth. One would involve attracting larger, nonresident businesses to Saskatchewan. But the bigger opportunity lies in fostering the development of many new small businesses here at home.

"A bunch of those jobs are going to come from home-grown small business," Hiles offers. "Only some of the jobs will come from large ones."

The 7,500 target established in the Chamber's plan was chosen because it represented a doubling of business startups. According to government statistics to the end of March 2001, a total of 3,100 businesses and co-operatives were registered in that fiscal year. While new figures for the past year aren't available, there is nothing in the economic data to suggest Saskatchewan produced twice as many new businesses in the past 12 months as in the year previous. It's a tall order and one that remains to be fulfilled.

"There would have to be something else change to have that happen," Hiles adds.

He says one of two things would have to happen to achieve the objective. One option is for one of the economy's main drivers, such as agriculture, find explosive growth. The second option would require a major change in the province s psychology leading to a rapid escalation in entrepreneurship. That may be triggered, he suggests, by a change in purchasing policies patterned after Buy Saskatchewan, a strategy employed in the '80s by the Crown corporation sector which targeted local firms who could supply products that were being sourced out of province.

"There are a lot of organizations that will not look at out-sourcing as an opportunity. If they did, there would be new opportunities (for smaller, local suppliers). And the buyer of those services could then work on being better at their core businesses."

However, the real point is the need for a larger, more vibrant business sector. And start-ups is where that journey begins.

In broad terms, this province has a relatively small private sector. The provincial government receives less than five per cent of its total revenue from corporate income taxes, compared to roughly 11 per cent in Alberta and slightly less than 20 per cent in Ontario. To put it another way, the Royal Bank pays more corporate income tax in three months than the government of Saskatchewan generates in corporate income tax revenues in a year.

Simply put, Saskatchewan's private sector is small and, some argue, fragile.

And if the private sector is small, by extension it means we have fewer small businesses than other provinces.

Consider these statistics. Small businesses comprise more than 90 per cent of the total number of non-agricultural private firms in the province. They directly employ one-third of the provincial labor force. That translates into 165,000 people. Compare that to the 113,000 employed by all levels of the public sector in Saskatchewan.

More importantly, small businesses created 94 per cent of new jobs in the province in the last decade. As major corporate entities such as Nortel shed thousands of jobs at a time, the job creation dynamo of small business is indeed the engine of economic growth.

And they're everywhere.

Roughly 42 per cent of all small businesses are located in rural Saskatchewan, employing an average of six people which adds up to about one-quarter of all Saskatchewan workers.

This brings us back to the targets established in PFP and Action Saskatchewan. Given the power of small enterprises in generating employment and, subsequently earned income which feeds government treasuries, doubling the number of new business start-ups is a potent tool for overall growth. That's the very reason the Chamber and PFP selected the targets.

The question that remains, however, is whether policies have been enacted or changed to bring about the desired result. Have we done anything to double the number of business start-ups or are we doing the same old thing and expecting a different outcome?

One idea that has been floating around is to reduce the cost of registering a corporation to one dollar. Business registration fees of a couple hundred dollars are not a big revenue generator for government anyway, so why not make them virtually free? Who knows, we might start giving them away as Christmas presents.

Silly as that may sound, imagine a high school senior receiving a corporation for Christmas. In effect, they would now own a business and she or he would be the sole shareholder. Yes, it's a shell company but a company nonetheless. Will the ownership of a Saskatchewan-registered business have any impact on their thinking about leaving the province on graduation?

Their Saskatchewan-registered business would have little value in Alberta or Ontario but in Saskatchewan provides the framework for the creation of a new business venture. Not only would we boost the number of new business startups in the province but, if every Grade 12 student were to be given a Saskatchewan corporation as a graduation present, they'd have to give serious consideration to remaining at home. They could stay here and be a business owner or move away to become an employee of someone else's business.

CONTACT

Larry Hiles

Saskatchewan Chamber of Commerce

c/o Doepker Industries

[phone]