At a time when business optimism is starting to return (however cautiously), ScaleUP Week 2025 opened with something that’s looking to help Canadian firms turn that optimism into outcomes.
That something is a new report called ScaleUP Drivers 2025, which is focused on the strategies, barriers, and conditions that shape whether a company grows or stalls.
Published on June 2, the report was developed by a national network of researchers, economists, and business leaders to give founders, executives, and policymakers a look at the conditions, choices, and capabilities shaping Canada’s scale-up economy.
If you’re running a business that’s past the startup scramble and you’ve built something that works, what’s stopping it from getting bigger? While it’s not a full blueprint, this report flags what’s holding Canadian companies back from growing on their own terms.
Before we get into the how, let’s look at the why. Because the scale-up gap is a daily reality for business owners trying to do more with limited time, talent, and capital.
Why scaleups matter
It’s been said many times before, but Canada doesn’t have a startup problem. In fact, according to global comparisons, it consistently ranks near the top in early-stage entrepreneurship. What it lacks is follow-through.
According to OECD research, only 5% of Canadian start-ups grow beyond their start-up size within three years. And the report notes that only 2% of mid-sized firms go on to become large corporations. That matters because the vast majority of Canada’s companies (over 99%) are small or mid-sized. According to the report, small and medium-sized businesses (SMBs) generate more than half the country’s GDP and are responsible for more than two-thirds of new job creation.
But most of them never scale.
“Despite their foundational role in the economy, most SMBs start small, stay small, and ultimately exit without ever realizing their growth potential,” Simon Raby, professor at Mount Royal University and founder of ScaleUP Week, wrote in the report.
That’s a missed opportunity for those firms, but when you look at the bigger picture, it contributes to a national productivity issue.
Recent reports from the Bank of Canada, TD Economics, and the Canadian Federation of Independent Business all point to lagging SME performance as a drag on the entire economy. High-growth enterprises (HGEs), though rare, punch far above their weight when it comes to job creation, exports, and innovation. If we want a stronger economy, we need more companies that know how to grow (and do).
So what’s getting in the way?
The four drivers of scale
The report organizes its findings around four core drivers of business scale:
- Leadership and people
- Innovation and technology
- Market diversification
- Capital and valuation
Whether you’re managing your first real team, entering a new market, or figuring out how to raise capital without losing control, these are the areas where strategy either kicks in or falls short.
1. Leadership and people: Hire for tomorrow, not just today
“Scaling up starts — and often stalls — with people,” the report notes. That includes everything from hiring infrastructure to governance to founder mindset.
One of the most common pitfalls among scaling firms is holding onto early-stage hiring habits well past their expiry date. CVs and job titles become less reliable indicators of fit.
Performance starts to lag. Culture frays under pressure.
But traditional hiring methods continue to dominate, even though, as the report points out, CVs score below 0.2 (on a 0-1 scale) in predicting job performance. And hiring based on familiarity often reinforces sameness rather than building capability.
What works better is hiring for values alignment and defined competencies. That means being clear about the skills and behaviours your business actually needs, and building a hiring process that reflects that (instead of whether or not they told you a good joke in the interview).
It’s a shift from hiring who you like to hiring who can help you grow.
The report highlights Talent Pipeline Management (TPM), a U.S.-based model now being piloted in Alberta, which helps employers define the specific skills they need and map them to training and education pathways.
The report also puts governance as a strategy in the spotlight. Boards should be asking, ‘Are we allocating capital and resources consistent with our strategy?’ Not just, ‘Are we compliant?’ Governance is repositioned as a growth enabler, not a box-checking exercise.
Finally, the report doesn’t shy away from the personal toll of leadership. Long hours, isolation, and burnout are common. Entrepreneurs are often the last to ask for help, and the first to internalize failure.
The takeaway here is that scaling requires strong networks on top of strong teams. Social capital, mentorship, and peer learning are presented as core ingredients for resilience.
2. Innovation and technology: Invest in systems, not gadgets
Canadian firms have strong incentives to invest in R&D, at least on paper. Canada ranks fifth globally in R&D tax generosity, but actual business R&D performance and technology adoption, especially among SMEs, remains stubbornly low.
Canadian firms are good at R&D — at least on paper. Canada ranks fifth globally for R&D tax incentive generosity. Yet according to the report, business adoption of technology (especially among SMEs) remains stubbornly low.
Just 5% of Canadian SMEs are considered digitally advanced, Curtis Griffith of Copoint wrote in the report. Only 34% analyze customer data. And fewer than 1% use equity financing to support technology investments.
The problem comes down to mindset.
Most firms treat technology as a cost, not a strategic asset. And when it comes to artificial intelligence, that gap widens.
Canada is strong in AI research but slow in commercial adoption. The report suggests reframing AI investments not in terms of traditional ROI, but in terms of confidence-building experiments. Instead of asking if this will guarantee results, leaders should be asking themselves what they can learn quickly and affordably.
If you’re trying to grow without giving up ownership, non-dilutive funding should be on your radar. Programs like Scientific Research and Experimental Development and Industrial Research Assistance Program can offset costs for R&D and commercialization — but too many companies write them off as too complicated.
The better move? Don’t go it alone. Work with advisors or accountants who know the system and can handle the paperwork. It’s about not leaving money on the table. Even one successful claim can free up capital to test new products, hire technical talent, or take a bigger swing in the market.
3. Market diversification: Stop relying on home-field advantage
Canada’s domestic market is simply too small to sustain most high-growth firms. Still, many companies stay local longer than they should, delaying their exposure to global competition and missing out on export opportunities.
Exporting firms, the report notes, generate 121% more revenue on average than their domestic-only peers. Yet many Canadian SMEs avoid international expansion due to uncertainty, regulatory complexity, or lack of internal readiness.
The report introduces the concept of “exporter stages,” from future exporter (planning) to direct exporter (earning revenue abroad). Knowing where you are helps clarify what risks and supports are relevant.
Programs like EDC, CanExport, and Global Affairs Canada offer financial and strategic support, but many businesses either don’t know about them or assume they won’t qualify.
Another overlooked growth lever is intellectual property. Trademarks, trade secrets, and patents help boost your valuation, and reduce risk when entering new markets.
If you’re expanding outside Canada, your IP protection doesn’t automatically follow. You’ll need to register in each jurisdiction, and waiting until you’ve gained traction makes you a target, not a priority.
Not everything needs a patent. In some cases, trade secrets or strong contracts do a better job of keeping your competitive edge intact. The key is to treat IP like a strategic asset, not a legal afterthought. A proactive IP strategy can help you move faster, negotiate better deals, and avoid costly surprises — especially as your business scales.
4. Capital and valuation: Don’t wait until you’re ready to sell
Of course capital is a key component to success, you need it to survive after all, but it also sets the pace and direction of growth.
Too often, companies wait until they need capital to think seriously about how they’re raising it. The report outlines several forms of capital — equity, debt, vendor financing, and newer options like entrepreneurship through acquisition (ETA). Each comes with trade-offs, and the goal is not to choose the “right one,” but to understand what you’re building toward.
One eye-opening stat that Charles Plant shared in the report is that the average SaaS company has $2.18 in capital for every $1 in revenue. But the most efficient firms (those that use just $0.50 to $1.00) get significantly higher valuations at IPO.
“Capital isn’t just fuel,” Plant wrote. “It’s direction-setting. And how you raise early on shapes your trajectory.”
Read more: Why Canada struggles to scale and what Charles Plant wants founders to know
The report also challenges the assumption that valuation only matters at exit.
Valuation discipline can influence how you structure teams, track metrics, and make operational decisions long before a sale. CEOs who think in terms of “enterprise value,” and not just revenue, are better positioned to navigate funding, growth, and succession on their own terms.
Scale is not a phase. It’s a system.
You don’t have to romanticize entrepreneurship to take scaling seriously.
Scaling is hard. There’s no silver bullet. And, while the barriers are real (think capital gaps, talent shortages, and regional fragmentation), so are the levers for change.
The firms that grow beyond their founders aren’t necessarily more innovative or better funded. They’ve built systems that support decision-making, attract the right talent, and align capital with strategy.
That takes uncomfortable conversations about leadership gaps, misaligned markets, or capital inefficiencies, and a willingness to stop relying on what worked in the early days.
For founders, the real work of scaling often begins when instinct takes a back seat to structure. That means hiring people who are better than you at specific things. It means building internal financial literacy so you’re not flying blind. It means setting up your business to thrive even when you’re not in the room. There’s no formula, but there is a pattern.
Scaleups create jobs, attract capital, deepen innovation, and accelerate exports,” wrote Raby. “But scaling is hard. It demands more than ambition — it requires intention, structure, leadership, and support.”
The report is available now at scaleupweek.ca. ScaleUP Week runs from June 2 to June 5.
Digital Journal is the official media partner of ScaleUP Week 2025.
This coverage is supported by the Calgary Innovation Coalition (CIC), a network of 95+ organizations working to accelerate innovation and entrepreneurship across the Calgary region.
