A place to grow: Scaling up Ontario’s firms

Released January 2016

In A place to grow: Scaling up Ontario's firms, the Institute looks at over 140,000 businesses in Ontario spanning seven key sectors to determine the factors that are most strongly associated with large firms. The results vary drastically by sector and firm size, which implies that targeted, sector-specific efforts are required to maximize Ontario’s potential.

In general, firms in goods-producing sectors thrive when engaging in trade activities, especially exporting. Location is also a strong determinant of success. The report finds that companies in service-producing sectors make better use of their employees and demonstrate the greatest returns to scale.

As shown in the Working Paper, the 127 provincial programs that support businesses are administered by 14 different ministries and are not centrally organized or broadly marketed, making it difficult for many firms to find and apply for these programs.

In addition to the sector-specific recommendations for scaling up businesses, the Institute recommends that the Ontario government:

  • Adopt alternative definitions of firm size: Adopt more relevant and useful metrics such as output per worker.
  • Streamline initiatives directed toward firms: Consolidate business-support government programs to increase effectiveness.
  • Strategically allocate resources toward increasing firm inputs: Target the sectors with the greatest response to increasing labour and capital levels.
  • Scale up on initiatives that encourage international trade: International trade provides excellent benefits to those capable of participating. Offer increasing support to enable Ontario’s firms.
  • Incentivize appropriate risk taking: Calculated risks can pay off in Ontario.

Note:

There are two versions of the Working Paper. The longer version provides more supplementary analysis on the effect of each variable on firms. 

A sortable list of the 127 programs is also available for download. 

Topics: Business growth and innovation