As Nova Scotia tries to respond to the Ivany Report and figure out how to do things differently than we have in the past, it doesn’t hurt to cast our eyes elsewhere in the world. To look at what is going on, what works, and what doesn’t work, in other jurisdictions.
Are there similarities? Lessons to be learned?
Believe it or not, Mexican businesses have some parallels to Nova Scotia businesses.
The vast majority of Mexican businesses – 95.5% – have fewer than 10 workers. This is not dissimilar to the profile of the Canadian and Nova Scotian economy.
Not only are these the epitome of small business in Mexico, they also have very few people behind the counter, working off and on the books. And Mexico is stubbornly attached to the smallness of these businesses.
A recent article in The Economist talks about it being a “Peter Pan” system — where the country’s firms do not want to grow up. It is a system in which firms prefer to stay small than to grow, mostly because of tax and regulations. “It is easier to fly under the radar when you are microscopic,” says Manuel Molano of the Mexican Competitiveness Institute.
But there are costs to this stubbornness to keep business small – lack of efficiency, technology and innovation being among the top costs quoted by The Economist. Many lack electronic payment systems and have failed to branch out into the sale of mobile airtime and other billing services that are highly profitable for other, mostly larger, companies.
Is it possible that this exists in Nova Scotia as well? I recently visited a business in Halifax that was doing $2.1 million in sales per year. Amazing. Entrepreneurial at its core, it had grown to this from the twinkle in the owner’s eye 20 years ago. A great success. At least by Nova Scotia standards. However, it all remains on “the back of an envelope,” in the mind and intuition of the owner, with no formal systems, and operating with very low technology.
How common is this in Nova Scotia? I don’t have the statistics. Maybe someone else does.
But I do know that even one is one too many. The opportunity costs are huge.
Yes, while we may consider going from zero to $2.1 million to be a great success, imagine what it could be.
Do you know a business that has the “Peter Pan” syndrome?