The Atlantic Entrepreneurial Community: Challenges and Trends

In a recent PDE post, Jonathan Ortmans reported on his experience in Toronto and Waterloo and his perspective on entrepreneurship support and policy in Canada. At the same time Jonathan was in Ontario, I was on the Atlantic seaboard in Halifax, Nova Scotia. There, I had the opportunity to participate in the Atlantic Entrepreneurial Ecosystem conference hosted by Saint Mary’s University.

Two and a half years ago, I visited the University of Alberta in Edmonton and learned a great deal about the efforts to promote entrepreneurship there. I similarly learned a lot about the city of Halifax and recent efforts to promote entrepreneurship in the city, in the province of Nova Scotia, and in the other Atlantic provinces: New Brunswick, Newfoundland, and Prince Edward Island. Our colleague Ted Zoller also had the chance to visit Cape Breton in Nova Scotia recently and, as Ted put it to me, “things are hot up there!”

During the two and a half days I was in Halifax, three ginormous cruise ships docked in the harbor, which I could see from my hotel window. On cruise ship days, passengers pour out onto Pier 21 and the Halifax Seaport, which houses numerous shops and, on weekends, a farmers market. The entire harbor front has been transformed over the past several years into an enjoyable, walkable waterfront that extends for a few kilometers. Shops and restaurants and public art and informational signs line the boardwalk, and every time I went down there, it was crowded. A short walk into the center of the city takes you to pleasant streets and the Citadel, which dominates the tallest hill in the city and, for the British navy, provided a solid defense to potential invasion.

If you step off the cruise ship or walk down to the Seaport, you encounter two things immediately. One is the Canadian Museum of Immigration, which celebrates Canada’s immigrant heritage (one line of my mother’s family emigrated from Scotland to Nova Scotia). The second thing is a large statue of Samuel Cunard, who pioneered steamship businesses and was one of the city fathers of Halifax. Wikipedia calls him a “shipping magnate,” but the plaque on Cunard’s statue at the Halifax harbor calls him an entrepreneur.

Halifax and the Atlantic provinces have an entrepreneurial heritage. And today, many people and organizations are involved in building on that heritage although they face numerous challenges. Overcoming these challenges and recovering that entrepreneurial heritage were the topics of the Atlantic Entrepreneurial Ecosystem conference organized by Dr. Ellen Farrell of the Sobey School of Business at Saint Mary’s. She asked me and fellow speakers David Audretsch and Benson Honig to help address these.

As explained by Dr. Farrell, the Atlantic provinces struggle with challenges and trends common to other cities and regions. She highlighted five especially prominent challenges:

  1. An aging and declining population, although the city of Halifax itself has enjoyed relatively steady population growth;
  2. An eroding base of manufacturing, signified by recent closing of two major plants;
  3. A migratory workforce, drawn to the oil sands in Alberta;
  4. Lots of public R&D but with little coming out in terms of commercialized innovations; and,
  5. A lack of “entrepreneurial recycling” from deals and exits that is common in vibrant places such as Silicon Valley and Boulder.

These are not necessarily unique challenges, but they are compounded by the relative isolation of Atlantic Canada—overall, the four provinces have a population of around two million people, and they are on the far eastern coast of North America. (At the conference, proximity to the British Isles and Europe was mentioned more than once as an asset.)

To kick off the conference, Dr. Farrell introduced a new paper she has co-authored, which maps the various networks of the Atlantic Entrepreneurial Ecosystem. The paper is outstanding, and I’ll post a link once it’s officially public—Farrell and her coauthor surveyed and interviewed hundreds of individuals at various organizations throughout the region, then mapped the connections and the types of connections between them. The result was seven giant network maps arrayed around a large ballroom on the opening night of the conference. Attendees could see how entrepreneurs and investors and support organizations were connected to each other—who was seeking help from whom and what kind of help? How central were government agencies and universities? Who wasn’t connected to the main nodes of the ecosystem? How far did the networks extend beyond the region? And so on.

It is a terrific piece of research and highlighted a few other features about Halifax and the other provinces. First, government appears to be among the most highly connected nodes in the network. This includes public-private investment funds as well as agencies, so it’s perhaps misleading to call it all “government,” but the pattern of connections is clear. Second, while there are some international links, the network is still mostly regional. And third, there are a lot of entrepreneurial firms that are not at all connected to the rest of the ecosystem.

One conference is not going to solve the five challenges above, or figure out how to address gaps in the network. But it’s a start. Audretsch gave of an overview of his new book, Everything in Its Place, as well as his past work on the geography of entrepreneurship. Honig talked about his work in specific regions, including the interesting notion of “dis-entrepreneurship” in one Scottish town. Both Audretsch and Honig gave fascinating talks, and the day was capped by a panel that included Colin Mason, an expert on entrepreneurship and regional development from the University of Glasgow (Mason is also participating in the 2015 Kauffman’s Entrepreneurial Ecosystem conference).

Halifax Water View

For my part, I talked about three things: the perils of “startup monoculture”; the opportunities for Halifax and the Atlantic region; and, the importance of “grungy” entrepreneurs. I’ll dig into the first and third items in future posts. Halifax and the Atlantic provinces seem to typify the situation in which other cities and regions find themselves: how do we build on what we have and turn our liabilities into assets?

Take population: overall, the Atlantic region has an aging population. That obviously brings with it many different economic and social challenges. But in the United States and United Kingdom, there has also been an increase in entrepreneurial activity among older individuals. Some people dismiss this as economically meaningless, and there are certainly businesses started by people over age 60 that are simply part-time gigs or ways to generate supplemental income. But that also applies to other age groups, and there are plenty of innovative businesses started by “third age” entrepreneurs. Halifax in particular also has a high concentration of human capital by virtue of a dense collection of universities—much of this is transient student population, but there should be ways to both build on that and connect older entrepreneurs with the universities.

The region is also home to a couple of burgeoning sectors: ocean tech and tidal wave power. I don’t know that much about ocean tech, but as concerns about climate change become more acute, with oceans playing a big and still unknown role, this seems like a very important sector and one that could play a central role in the Atlantic Entrepreneurial Ecosystem. Likewise, the Bay of Fundy north of Halifax apparently has some of the strongest tides in the entire world, and several companies are attempting capture those tides and turn them into an energy source.

Overall, however, two things struck me about Halifax and the Atlantic region. First, there are people like Ellen Farrell and Gerry Pond—a local entrepreneur and investor—who are devoted to renewing entrepreneurial growth. These types of local champions play a catalytic role in generating vibrancy. Second, Halifax itself is a lovely place and just seems like a nice place to live. More than one person told me about this or that successful company that was based in Halifax simply because the founder or founder’s spouse wanted to live there.

Not all nice places to live have vibrant entrepreneurial ecosystems, of course, but quality of life tends to go along with entrepreneurial vibrancy. Nothing is guaranteed, but Halifax and other parts of Atlantic Canada clearly have strong assets on which to build. I look forward to returning to the region next year or the year after to see the progress they make.

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Dane Stangler

Dane Stangler is vice president of Research & Policy at the Ewing Marion Kauffman Foundation. In this capacity, Stangler leads the Research & Policy department and serves on the senior leadership team. He also provides research and writing on a variety of subjects. He also represents the Foundation by speaking at meetings and conferences around the country.

Stangler earned a bachelor's degree in English from Truman State University, and a JD from the University of Wisconsin-Madison.