This chapter summarizes a study funded by Aboriginal Business Canada (ABC) that surveyed Aboriginal firms that were either current or recent clients of ABC and those that were non-clients. The study drew comparisons between the characteristics and performance of these firms and, when data allowed, other firms in the general Canadian business population. The study also assessed development needs of Aboriginal businesses and recommended improvements for future ABC programming based on these findings.

The definition of some key concepts used in the report will assist the reader:

• Innovation can encompass many different types of changes and improvements with the ultimate goal being to add value to the processes, products or services and bottom-line of the business.

• Success involves the successful attainment of some goal. The study assesses the subjective views of business owners/managers related to the degree to which they have reached their stated goals. Further it looks at more objective measures of success based on potential goals of profit, innovation, and survival. Finally it models an overall indicator of success based on subjective and objective measures and business characteristics.

• Growth is potentially a goal, measure of success, and characteristic of the business. We look at growth in terms of an increase in employment, sales, profit, exports, innovation, and technological adoption.

Key findings (in italics) from the study and associated recommendations (in bold) are presented within three themes: past support, gaps in support and future support. More detail may be found in later chapters.

Past support has been good...

• Past ABC support has led to success. ABC clients are more successful than non-clients. ABC should continue to provide the supports that have led to success in the past.

• ABC supports firms in financial need and does a good job screening out those not in need. ABC should continue to screen out those who do not need its help.

• ABC client businesses demonstrate more advanced business practices in areas promoted by ABC. ABC should continue to encourage good business management practices.

• ABC clients display a higher level of employment growth, sales growth, exports and innovation. It is unclear whether these differences are due to ABC support or support is due to these differences. Nevertheless it is clear that such firms are more likely to need support and do well when receiving support. ABC should continue to support such firms.

...but gaps in support remain...

• Lack of support may limit innovation, which the study indicates is a determining factor of business success. ABC should continue to target firms that are interested in innovating. ABC should help provide the assistance businesses say they need to achieve their innovation goals.

• Deficits were identified in business managers' marketing, sales and communication skills, and in financial experience. However, a gap exists in support for management skills training. ABC should work with human resource organizations to identify how best to address Aboriginal business training needs. ABC should provide support related to the identified methods to overcome managers' skill deficits.

... and some issues warrant attention related to future support.

• ABC clients well represent the population of Aboriginal firms in terms of most characteristics. Although past support has been equitable there may be value in more strategic targeting of areas of growth and opportunity. To identify areas of growth and opportunity that might be suitable for future targeting ABC should investigate trends in the Canadian and Aboriginal economies.

• Women owners and businesses from urban or remote areas seem under-represented among ABC clients. ABC should determine whether these short falls are due to program delivery characteristics and, if so, program delivery should be corrected.

• It is unclear whether client success is due to ABC support or to the activities promoted by that support (i.e., greater innovation, adoption of technology, export orientation, and growth). ABC should consider further research involving the tracking of firms over a longer period and analysis by characteristics of support. This type of research would more definitively assess which support characteristics should be promoted.

• Some Aboriginal businesses appear to have needs but lack sufficient awareness of ABC to enable them to assess their fit with ABC. ABC should study how to improve its marketing efforts with the goal to increase awareness and thereby support to eligible businesses with unmet needs. ABC should make changes as appropriate.

• The funding decision by ABC involves balancing the risk that public funds will be spent on business that will not succeed against the reward that supported firms will flourish and bring benefits to the Canadian economy. Evidence suggests the current balance is positive - the reward exceeds the risk. However, evidence does not indicate whether the current situation maximises the net reward. ABC should consider testing small step-wise expansions to its support, reviewing the risk-reward balance after each step, before it considers the direction of its next step.