Wikipedia defines the American Dream as “a national ethos of the United States, a set of ideals in which freedom includes the opportunity for prosperity and success, and an upward social mobility achieved through hard work.”
Its potential is fully realized through entrepreneurship, the art of starting up and/or growing a business entity while managing and assuming the risk and reward associated with it.
Since the start of the Great Recession, the American Dream has been on the rocks. Although entrepreneurship continues to drive our economy and the development of start-ups and small businesses is moving at a tepid pace, it’s nothing like the explosive growth that our economy saw in 2006 and before. Risks aren’t being taken as they once were for various reasons.
Some folks, though, are taking big risks and making good on them on our soil or with our assets. But, they are not of our nationality. Our neighbors to the north are fulfilling their version of the American Dream, maybe a Canadian Dream or a North American Dream, and reaping the rewards.
Over the past few years, after many more trying to crack the Canadian market with only moderate success, we’ve seen many clients and interested parties from across the border come to the factory to develop new products and business lines. Now, our largest client is from Canada and we have a few more that now rank among our biggest customers. They are making the investments in the entire product life cycle that Americans once did with vigor and some are taking on even greater entrepreneurial endeavors than most Americans would dare.
Our observations about the Canadians are not anecdotal in nature. We are not alone in such experiences.
There are reasons that the Niagara County Center for Economic Development is focusing their marketing and business attraction efforts to the north. That’s where the money is. That’s where the movers and shakers are. NCCED understands that Canadian money will lead to American money.
There’s a reason that a New York Times study in April of this year found that America’s Middle Class was no longer the richest in the world. Our long held grip on that rank has slipped and we have been surpassed by none other than Canada. A recently as 2010 our nations were tied in middle class wealth.
It’s obvious that in this new economy, this new world, the Canadians know how to – and can – live out their dreams.
But why are they doing so well while we are faltering? For brevity’s sake, here are 2 major reasons:
Access to capital: This could be the most significant driver behind the shift. You can’t make money without money. Those who want to start or grow a business need cash but most don’t have it. So, to make good on their dreams they need to borrow it. It used to be that Americans had easy access to small business loans. Those days are long gone. Since the turn of the century, small business loan volume has fallen 14% while microenterprise loans (under $100,000) have plummeted 33%. It’s not for the lack of demand: More than 40% of small business owners have said that they needed a loan within the past 2 years but could not obtain one. It’s a different story in Canada where business lending rose 9% last year alone. Canadian banks issued almost $200 million in small business loans in just the first 5 months of 2013 (those are “American” numbers!).
Stability of public policy: There is some semblance of regulatory and policy stability up north. Canadian entrepreneurs are operating in a system of governmental knowns. American business owners, on the other hand, are confounded by an ongoing onslaught of unknowns. From the economic collapse under the Bush Administration’s watch to the various nuances of Obama’s health care reform, EPA rules changes and more, potential or new entrepreneurs can’t adequately plan for the future because the rules of the game seem to change on a weekly basis. It’s bad enough one has to plan for changing competition and marketplaces, but American businessmen must also account for their very nation changing. In Canada, investors know what they are getting and how what to expect over the short and long term.
Canadian entrepreneurs are succeeding because they are able to operate their enterprises in an economic system we once enjoyed, one where the private sector (banks) and public sector (federal government) were interested in creating and nurturing success.
If American decision-makers and policy-makers are even remotely interested in revitalizing the American Dream, there’s a lot they can learn from our friends to the north.