Goodness, that's a lot of pressure.
I'd like to thank the members of the standing committee for inviting me to appear as a witness for you today on recommendations for Canada's small, medium, and large manufacturers. My name is Victoria Lennox. I'm the co-founder and CEO of Startup Canada, a leading national social enterprise connecting and supporting entrepreneurs across Canada.
Our flagship program, Startup Communities, connects entrepreneurs to their local support partners and to education, mentorship, training, and finance opportunities, and provides advocacy nationally and internationally for Canada's entrepreneurship community. We have 25 Startup communities across Canada and 150,000 members across the country, a number that continues to scale as we expand this program to an additional 25 communities this year.
Of our members, 44% are start-up companies, 27% are growing companies, 15% are mature companies, and 13% are in the pre-incorporation stage. Fifty per cent of these companies sell globally, and 75% are optimistic about their yearly growth in the next three years. As we know, small businesses account for 93% of all manufacturing companies and 17,000 of those small businesses have just one to four employees. Generally, the Canadian business ecosystem is not receptive to risk. It's slow to innovate, and study after study shows that we lag behind competitors in many respects.
The manufacturing sector is no exception and is perhaps one of the greatest examples of this. According to KPMG's 2015 global outlook report, Canada trails the global average by 28% when it comes to the adoption of new manufacturing technologies, and 31% when it comes to R and D spending. The report calls Canadian manufacturers doers rather innovators due to our risk-averse culture.
Too often, Canadian economic policy levers tend to favour already-established companies while dismissing the actions of national leadership needed to grow young companies and support them to reach stages of high growth. Every large manufacturer was once a start-up company, and we need to take action to support manufacturers at every stage of growth. Manufacturers must innovate to succeed, and we must charge the national leadership with encouraging this innovation. The grassroots community is there. The government has to play a leadership role up front, and I believe that this consultation is an excellent step.
I therefore wish to put forward a few recommendations for discussion here today. The first one has to do with procurement. Procurement is one of the most powerful policy levers that the Government of Canada has in order to support and scale early-stage companies to become high-growth companies, particularly in the manufacturing sector. From unbundling large RFPs, to encouraging supplier diversity to include indigenous entrepreneurs and women, to investing in diversity through our procurement strategies by ensuring that large companies that receive bids have diverse boards and that they're investing in our small business community, and by playing with procurement sandboxes across the country, we have the opportunity to create a procurement framework across Canada that supports Canada's entrepreneurs to go global and to innovate.
The second recommendation that we have is to have a clear focus on attracting and retaining talent. We must ensure, as we bring in our entrepreneurs and students across Canada, that we expedite their permanent residency and that we aggressively review the temporary foreign worker program and express entry so that we can bring executives who have the experience in growing manufacturing sector companies in to actually do so.
Allen Lau, co-founder of Wattpad in Toronto, summarized it well on stage at a panel at Startup Canada Day on the Hill. He said that six to eight months is a non-starter in a competitive environment. People have 10 job offers per day, and two weeks is just too long. So we must really look at how we can support attracting and retaining talent, particularly for high-growth entrepreneurs in the manufacturing sector.
The third recommendation has to do with education. We encourage the Government of Canada to work with the provinces to update education policies to align with the rapidly changing demands of the 21st century workforce. We need support in the development of STEM amongst Canadian students, but also business skills including financial management and customer-facing skills. These are essential to the competitive viability of any company. While education is, of course, a provincially mandated policy, Startup Canada encourages the federal government to work in collaboration with the provinces and territories to educate students, teachers, and parents on the skills and their necessity in the workplace.
Of course, I wouldn't be an entrepreneur if I weren't to speak about funding. We need to leverage innovative financing models to increase investment in small business manufacturing. I note that the B.C. angel tax credit would be something to consider across Canada .
Lastly, we need to ensure that our entrepreneurs are thinking globally and growing globally. We need to incentivize small manufacturers to access international markets by connecting them to support and training, and training in their communities. In 2015, Startup Canada partnered with EDC to launch the Adam Chowaniec Memorial Fund for Global Entrepreneurship, which invests in high-impact initiatives that advance the prospects of globally oriented companies. In 2016 we launched the global podium initiative, a strategy to propel Canadian entrepreneurs and start-ups onto the global stage. We invite the Government of Canada to join these initiatives.
As the Government of Canada looks to improve the conditions for Canada's manufacturers to succeed and create jobs in communities across Canada, it must look at the strategies that will support start-ups and small business manufacturers not only to start up but to scale up and become job-creating anchors in Canada. Too often Canada's economic policy levers tend to favour already-established companies while dismissing the actions in national leadership needed to grow young companies and support them to reach high stages of growth. Every large manufacturer was once a start-up company, and we need to take the actions to support manufacturers at every stage of growth.
Thank you.