With a mission to inform, empower, celebrate and advocate for British Columbia's current and aspiring business leaders, BCBusiness go behind the headlines and bring readers face to face with the key issues and people driving business in B.C.
Issue link: http://digital.canadawide.com/i/1332052
ON THE RADAR ( the informer ) MICHAEL WHEATLEY/ALAMY STOCK PHOTO I t's hard to believe, given their relatively high profile, but there are just 700 private companies with 300 or more employees operating in B.C. Small and medium-sized enterprises ( SMEs) comprise a greater share of the economy, both by employment and by contribution to GDP, than in most jurisdictions. This can be seen as a good thing. It suggests a culture of entrepreneurship. Plus, if well managed, small businesses can eventually become large ones. But it can also be a sign of underinvestment; when large businesses don't see a return and exit a market—or avoid it from the outset—small ones fill in those usually less lucrative gaps. Think of the employee who gets laid off when their local office shuts down and becomes a self-employed con- sultant, usually with lower or less secure compensation. This highlights another downside of B.C.'s small- business skew. Large compa- nies generally pay higher wag- es and provide better benefits than SMEs do. In 2018, average annual earnings for work- ers in B.C. businesses with fewer than 50 employees was $44,542, compared to $53,569 for those with 50 or more. Big companies post higher revenue per employee than their smaller peers, making the economy more productive and competitive. The COVID-19 pandemic has brought a still more urgent downside to our SME- dominated economy sharply into focus: small enterprises often don't have the financial wherewithal to sustain an extended disruption that large businesses do. "We do have an economy that's more weighted to small companies, particularly what I would call micro-businesses, those with zero to five paid employees," says Jock Finlay- son, executive vice-president Size Matters The B.C. economy's skew toward smaller companies has a downside that's especially evident during a pandemic by Michael McCullough S M A L L B U S I N E S S JANUARY/FEBRUARY 2021 BCBUSINESS 13 EAT OR BE EATEN Being a province of small businesses brings economic advantages as well as drawbacks DOWN SIZED 34% Share of B.C.'s GDP contributed by small business 1 Our rank among Canadian provinces by small-business contribution 517,000 17% Share of B.C. workers who are self-employed, 2018 1 B.C.'s rank among the provinces in self-employment 1.1 million Jobs provided by small businesses (<50 employees) in B.C., 2018 SHARE OF TOTAL EMPLOYMENT SOURCES: BC STATS, STATISTICS CANADA BUSINESSES WITH <50 EMPLOYEES 44% BUSINESSES WITH 50+ EMPLOYEES 38% PUBLIC SECTOR 18% PRIVATE BUSINESSES OPERATING IN B.C., 2018 700 7,700 15,400 64,900 113,200 315,200 300+ EMPLOYEES 50-299 EMPLOYEES 20-49 EMPLOYEES 5-19 EMPLOYEES 1-4 EMPLOYEES SELF-EMPLOYED WITHOUT PAID HELP