Canadian Micro Businesses Are Better Exporters than Their American Counterparts

Micro businesses – companies with fewer than ten employees – account for a fraction of exports in most Organization of Economic Development and Cooperation (OECD) countries, according to data released recently by the organization. As the figure below shows, in none of the OECD countries (where data were collected) did the share of exports belonging to micro-enterprises exceed 21 percent of the nation’s total.

But the OECD found wide variation across countries in exporting by micro businesses, with the share of the total accounted for by companies with zero-to-nine employees ranging from 3.6 percent in the Czech Republic to 21 percent in Slovenia.

The OECD didn’t go into detail about why these differences exist. But they might reflect variation in industry composition across countries, the physical size of the nations, and the strength of the micro business sector, among other things.

Compared with their foreign counterparts, U.S. micro businesses are moderate exporters. The United States was eighth of nineteen countries among those nations where data were collected.

That performance was much worse than that of our neighbors to the north. In Canada, 18.5 percent of exports came from micro businesses, as compared with 10.3 percent in the United States. Whether this difference is explained by the size of the two nations, their industrial composition, or the strength of the micro business sector, Canadian microeterprises are much better exporters than their American counterparts.

Created from data from the Organization for Economic Development and Cooperation

Scott Shane Scott Shane is A. Malachi Mixon III, Professor of Entrepreneurial Studies at Case Western Reserve University. He is the author of nine books, including Fool's Gold: The Truth Behind Angel Investing in America ; Illusions of Entrepreneurship: and The Costly Myths that Entrepreneurs, Investors, and Policy Makers Live By.