Introduction

As the COVID-19 pandemic recedes, the biggest challenge for small businesses is the financial risk associated with insufficient demand, cash flow difficulties, and low profitability (Arora, 2022). During the pandemic crisis, the survival rate of new small enterprises in Canada was 11.1%: on average, 101,324 enterprises were opened annually and 90,151 were closed (Government of Canada, 2023b). In 2021, almost a quarter of small businesses reported an increase in their prices by 20% or more (Levine, 2022). In particular, Alberta experienced a significant recovery after the COVID-19 crisis in 2021. The recovery was mainly due to the resumption of crude oil prices and a considerable increase in the proportion of vaccinated Albertans. These factors contributed to an increase in business activity. The main driver of the steady increase in oil prices is the geopolitical instability in Eastern Europe. The main factor that fosters the lifting of restrictions (mask regime, requirements to work at home, and restrictions on public gatherings) is the official completion of the COVID-19 vaccination program (February 8, 2022). The forecasts say that in the future, volatility in energy markets and restrictions on public health policies will be decisive in the growth of Alberta’s economy (Calgary, 2022). It is worth noting that among all the provinces of Canada, Alberta is the national leader in the extractive industry. At the same time, this province is most susceptible to strong fluctuations in global economic changes related to the natural resource market. Therefore, diversification is necessary in this province, and one of the pathways is through the development of long-term small business activity, particularly utilizing innovative practices to support the population and attract private investment to strengthen Canada’s economy (Government of Canada, 2023a). As noted by (Tarabishy, 2024), the continually evolving practice of innovation, entrepreneurship, and adaptation will stimulate sustainable growth and social responsibility in business conduct, ensuring the prosperity of small businesses in rapidly changing economic conditions. This research primarily focuses on the economic principles of measurement and monitoring. These principles determine the development of complex of measures (tools) for mobilizing small businesses for economic stabilization according to the priorities of the country’s economic policy. The novelty of the research is a policy tool for involving small businesses and strengthening the positive impact of innovative practices on strategic business development. It applies to regional borders and the country as a whole, given the potential economic conditions and risks of the external environment.

Literature review

Small business is the most important participant in the economy and society all over the world. It represents about 90% of enterprises and more than 50% of jobs worldwide, providing up to 40% of GDP in emerging economies (The World Bank, 2023) and more than 50% of GDP in high-income countries (Lin et al., 2022). However, recent events, especially the introduction of quarantine restrictions to prevent the spread of the COVID-19 pandemic, have complicated business conduct (Ali et al., 2023). This situation contributed to a drop in GDP and income from 30 to 50% among 70–80% of small businesses (Lin et al., 2022) since they have limited financial reserves and tend to be financially unstable (Fairlie and Fossen, 2022). Canada’s National Policy (Government of Canada, 2023b) characterizes small business as a business sector with an emphasis on small and medium-sized enterprises (SMEs), defining a business based on the number of paid employees. Small businesses have from 1 to 99 paid employees; medium-sized businesses have from 100 to 499 paid employees; large businesses have 500 or more paid employees. As a rule, small businesses cover all sectors of the economy and can drive the growth of the economy and the labor market, for example, for young people and immigrants. Researchers (Klofsten et al., 2021) emphasize, that small enterprises are not smaller versions of medium-sized and large enterprises, but rather independent and diversified participants of the business landscape. An unexpected shock during the COVID-19 crisis, according to Bruhn et al. (2023) stimulated the economic activity of small enterprises toward the redistribution of enterprises with higher pre-crisis labor productivity. This process involves mobilization-involved processes that contribute to improving social relations through social innovations (Cattivelli and Rusciano, 2020). The obtained (Adam and Alarifi, 2021) indicate that marketing and social innovations implemented by small business leaders in response to the consequences of the COVID-19 crisis had a positive impact on the performance and survival of enterprises. From the perspective of small businesses, researchers define innovations as new products or processes that meet consumer needs and are based on determinants of social responsibility, presenting more competitive and profitable alternatives to existing practices (Scarpato et al., 2020). According to the research data from the York Entrepreneurship Development Institute (YEDI) obtained by Konikov (2023), the innovative practice of small enterprises serves as a variant of cooperation between startups and large and medium-sized enterprises. These practice helps to introduce innovations, master new technologies, and conduct experiments, expanding small businesses as a competitive sector in the business landscape. To achieve the above goals, it is necessary to organize an educational space that will provide the knowledge, skills, and thinking necessary for business practice. An educational office and coworking in Alberta are an option (Konikov, 2023; YEDI, 2023). In this context, the educational space model allows for additional professional education. This model implies a mentoring approach aimed at commercializing small businesses for their balanced growth in the future (Ressin, 2022; Topa et al., 2023). Since small business is a part of all economic sectors, it is relevant to understand the problems of small businesses in the post-pandemic period. In this regard, Nye (2021) identified three main problems of small businesses:

  1. 1.

    the debt burden, according to the national trend, the share of unpaid loans in small businesses in 2020 was 11.7% against 11.1% in 2019 (OECD, 2021);

  2. 2.

    a supply chain failure due to pandemic and export disruptions caused by geopolitical instability in Eastern Europe since 2022 (Calgary, 2022);

  3. 3.

    the transition to digital technologies against the background of two global changes, requiring small enterprises to introduce innovative practices and investments.

The current situation has forced national governments to adjust economic policy measures toward financial support for small businesses through such programs as direct financial assistance, state-guaranteed loans, and tax incentives (Li et al., 2022). However, a review of research on the economic feasibility of financial measures to support small businesses (Adam and Alarifi, 2021; Bruhn et al., 2023) showed that government support measures towards crisis mitigation can negatively affect competition and business growth. These measures aim to support less productive and larger enterprises, regardless of their pre-crisis innovations. In addition, financial assistance enhances the positive impact of innovative practices at small enterprises on business survival, but not on their productivity. As a result, the economic downturn affects labor market statistics.

Macroeconomic statistics for 2020–2021 allowed for the analysis of government measures to support small businesses in Alberta. The analysis demonstrated that this province showed the highest annual growth of 9.5% among all Canadian provinces in the small business sector against the Canadian average of 6.4%. At the same time, the contribution to the net change in employment was 101.8%, while the average was 69.0%. It is worth noting that more than half of the population (total population of about 4.54 million people) lives and performs economic activities in the capital, Edmont, (about 1.52 million people), and the largest city – Calgary (about 1.61 million people) (Statista, 2023a). Gross domestic product (GDP) created by the small business sector serves as a measure to evaluate COVID-19 response measures in the local economy against the background of global changes in Statistics Canada (Government of Canada, 2023b). Mathai (2023) argues that GDP is a value that measures the volume of production. It is a fixed indicator that characterizes the economy in terms of stabilization. Therefore, during a recession, when there is a decrease in total or aggregate demand, phenomena such as low consumer capacity a decline in the sectoral structure, the government may take measures that do not align with the overall direction of the economy. In this context, monetary policy is considered the preferred countercyclical instrument (Government of Canada, 2023b; Mathai, 2023). The research findings by Dobarrio and Ciccarino (2023) emphasize that progress in overcoming social and economic problems is achieved through entrepreneurial innovation initiatives aimed at addressing social challenges and reflecting collective interests.

Summing up the above, it becomes clear that financial support programs are coming to an end and enterprises will need to review their business activities in the absence thereof. To ensure continuous support of small businesses, a complex of measures is required aimed at diversification of relations in cooperation models between businesses, government, the sectoral structure, and educational institutions. The result of these measures should be the scaling and growth of small businesses in the economic structure of Alberta and, overall, Canada.

Problem statement

Most studies limit their analysis to the national or provincial economy and a few urban areas in the provinces against the background of COVID-19. Instead, this study provides qualitative statistics on the small business landscape in the regional borders of Alberta and in Canada as a whole in the context of global economic changes. The study rests on the results of measurements and monitoring regarding the key indicators of the economy, demography, and industry business landscape. However, we supplement the empirical literature with an economic policy tool to involve small business development within regional borders. This tool allows for the responsible planning of the economic path and reveals the potential economic opportunities and risks. Practical conclusions are important for the potential control, preservation, and growth of small enterprises in the structure of the economy. The findings may be useful to attract the population as consumers and suppliers of talent.

The purpose of the study is to develop a set of measures (tools) for involving small businesses in stabilizing Alberta’s economy. Research objectives:

  1. 1.

    monitor the economy within Alberta’s regional borders;

  2. 2.

    analyze the small business sector in the structure of the provincial economy before and during the spread of the pandemic;

  3. 3.

    develop a set of measures (tools) for involving small businesses in stabilizing the local economy.

The structure of the article

The first section includes the Introduction and such subsections as Literature Review and Problem Statement. The Introduction describes global problems and trends related to small businesses, as well as local issues in Canada, using the example of Alberta. The Literature Review subsection examines previously published theoretical and empirical studies. The Problem Statement subsection justifies the motivation of this research and defines the purpose and objectives. The second section describes the research methods and methodology. The third section contains empirical results. The fourth section discusses and compares the results of the study with similar ones in other articles. The fifth section presents a summary of the conclusions with an emphasis on the practical application of the results and the direction of further research.

Methods and materials

The study provides a detailed analysis of Alberta’s small business sector. The economic principles of the analysis underlie the developed tools aimed at involving small businesses in the local economy. The tools correspond to the priorities of the country’s economic policy and global economic changes.

The theoretical basis rests on the concepts of Adam and Alarifi (2021), Bruhn et al. (2023), and Calgary (2022). Calculations and the experimental part are based on Statistics Canada (Government of Canada, 2023a). The study uses the example of Alberta (Alberta Government, 2023; Statista, 2023a). The data presented at the time of publication are the most recent statistics available to the Ministry of Innovation, Science and Economic Development of Canada, including the Province of Alberta.

Research stages

The first stage is the monitoring of the economy within the regional borders of Alberta based on economic Gross domestic product (GDP) and demographic (population size) indicators. These indicators characterize the sustainable state of the economy and society over time (Alberta Government, 2023; Statista, 2023a, 2023b, 2023c, 2023e). GDP represents an economic indicator reflecting the value of all goods and services, created by a region within its borders; population size is a demographic indicator measuring the quantitative size of the population residing in the area under consideration (Calgary, 2022). The results of this stage are visualized using two graphs, providing an overview of Alberta’s economy over the past ten years (2011–2021).

The second stage

The analysis of economic statistics values of the small business sector in the context of the Alberta industry business landscape (Government of Canada, 2023a). First, business activity is examined (Government of Canada, 2023a), measured by size into small, medium, and large enterprises; the numbers of employer enterprises per 1000 people (18+) and the overall employment growth in three periods: 2018, 2020, and 2021. This selected time frame reflects the most recent available data for Alberta’s statistics and underscores the dynamics of small business development in the context of the province’s economy, including the redistribution of enterprises from less productive to more productive ones before and during the pandemic. Next, the analysis of these data is visually presented using a combined histogram with grouping and a graph that illustrates the size of small, medium, and large businesses, as well as business and economic activity, taking into account the size of the business.

Then, the sectoral structure is examined (Statista, 2023a, 2023b, 2023c, 2023e), measured by the number of enterprises with employees in Alberta by types of economic activities, and the contribution of small businesses to Alberta’s GDP by industry.

The analysis of this indicator covers the period 2021. The selected period reflects the result of economic development under stabilization. The results of the analysis are presented using a combined histogram with grouping and bubble chart using an auxiliary axis to demonstrate the relationship between the production of the industry and its added value to the economy.

The third stage is the development of tools for involving small businesses in the process of stabilizing the economy. The grouping method is used, as well as the conversion of quantitative measurements obtained in previous stages, into qualitative definitions as economic principles. To visualize the result, the study uses a tabular matrix, containing an adapted list of key convertible qualitative definitions. These definitions characterize the economy in the stabilization process in three directions: the content of the business landscape, targeted measures to involve small businesses in the structure of the economy и the result of the comprehensive tool. For ease of analysis, a three-level approach is used: at the first level, macroeconomic conditions and large-scale initiatives; at the second level, basic conditions and small-scale initiatives; at the third level, diagnosis of the business landscape, including monitoring assessment, strategic management, and statistical analysis.

The research object: the means and methods of involving small businesses in stabilizing the economy in the region of Alberta.

The research subject: the process of stabilizing the economy in the region of Alberta.

Results

The analysis of the literature showed that the stability of the economy fosters the development of the business environment. Stability helps enterprises to grow and create jobs, benefiting from a smart and skilled workforce. Alberta plans to support this workforce through educational offices and coworking. Thus, the economy tends to have stable or slightly fluctuating values of population, GDP, business activity, and sectoral structure. Therefore, it is crucial to monitor the indicators of the economy (GDP) and demography (the population within the regional borders of Alberta over the past ten years). The monitoring can give an insight into economic stabilization influenced by external factors of the global economic landscape (Fig. 1). Critical external factors causing changes in global economic growth or decline as of 2022 include the duration of the COVID pandemic and changes in oil tariffs associated with political instability in Eastern Europe. In a globalized world, it had an impact even on a country on another continent.

Fig. 1: An overview of Alberta’s economy for 2011–2021.
figure 1

Source: developed by the authors based on Alberta Government (2023), Statista (2023a, 2023b, 2023c, 2023d, 2023e).

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The analysis of monitoring data (Fig. 1) shows that Alberta’s GDP for 2011–2021 had a growth rate of 102.0 to 105.8%, except for two periods: from 2015 to 2016 (the global financial crisis) and from 2019 to 2020 (global epidemic crisis). These periods demonstrate a decline in the economy worldwide and an average growth rate from 95.9% to 96.4%. In 2021, Alberta’s GDP amounted to 323.06 billion Canadian dollars and grew by 5.1% year-on-year, exceeding the pre-pandemic level by 3.0%. This trend indicates an increase in business activity in all sectors of the economy. According to the population estimates, the analyzed period had a constant annual population growth from 1.1 to 5.0%. According to the data for 2021, there were 4,647,178 people in Alberta and an annual population increase was 3.7%. In 2021, international net migration facilitated population growth by 0.65%. It was the largest driver of Alberta’s growth, followed by an inter-provincial net migration (0.25%) and a natural increase (0.10%). Thus, the economy within the regional borders of Alberta against the background of the global economic landscape has a favorable economic basis. The data on economic (except for two world crises) and demographic growth supports this conclusion. With the development of the economy, the importance of entrepreneurship among the population increases, which actively influences the indicators of growth of the national economy and society, especially through the contribution of the small business sector. To confirm this fact, the analysis of statistical data of the sectoral business landscape of Alberta is provided. Figure 2a represents the business activity of enterprises, while Fig. 2b denotes the sectoral infrastructure.

Fig. 2: Alberta Market Conditions.
figure 2

а Alberta business activity for 2018, 2020–2021. Source: developed by the authors based on Calgary (2022), Government of Canada (2023a). b Alberta’s sectoral structure, 2021. Source: developed by the authors based on Statista (2023a, 2023b, 2023c, 2023d, 2023e).

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Figure 2а shows that the business landscape of Alberta is dominated by the small business sector, with a focus on enterprises with the number of paid employees from 1 to 99 people. At the same time, the number of enterprises per 1000 people aged 18 and older against the background of the pandemic (2020–2021) demonstrates a tendency to decrease by 3.1%. This trend indicates that in the business landscape, quality but not quantity prevails. The direction toward quality implies the redistribution of economic activity in favor of productive enterprises. Thus, a modification of enterprise practices towards effective implementation of innovative solutions to address social and economic problems is observed. In this case, the key force is compensation in the form of increased productivity. Despite the long-term pandemic in 2021, the employment sector also demonstrated significant improvements, manifested in the increase in the level of economic activity by 5.1%. The growth in employment in the labor market is mainly driven by growth in professional, scientific, and technical services; construction; and retail trade. The local economy also contributed through the mining industry, quarrying, the production of oil and gas (accounting for 21.8% of GDP); real estate industry, renting, leasing (11.5% of GDP); construction (7.9% of GDP); production (7.7%); health and social care (6.7%); public administration (5.2%). These data are visually presented in Fig. 2b.

In general, the results of the study on the small business sector under economic stabilization show, that achievement of this goal requires the formation of a business environment where the small business sector becomes a dynamic element aimed at satisfying the interests of the local community. Therefore, the toolkit for involving small businesses in Alberta’s economy will be aimed at stimulating the growth of small enterprises and capitalizing on new opportunities created by external factors. To achieve this goal, a complex of measures and tools for involving small businesses is being developed, encompassing both aspects of the content of the business landscape in the process of economic stabilization and mechanisms for involvement to develop business opportunities. The proposed concept can be visually represented in the matrix (Table 1), highlighting three main directions: the business landscape content; the guidance with targeted measures to involve small businesses in the structure of the economy; and the result of the comprehensive tool in the context of a three-level approach: macroeconomic conditions, basic conditions, and diagnosis of the business landscape.

Table 1 Matrix of small business involvement Toolkit in the province’s economy.
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In a general sense, the presented toolkit for small business impact on the province’s economy (Table 1), is based on a three-level approach and includes the following instruments:

  1. 1.

    Macroeconomic conditions (Level 1): Creating favorable conditions for small business development at the national level. The toolkit includes support for economic stability and growth, entrepreneurship education, and ensuring access to services and financing for small businesses.

  2. 2.

    Basic conditions (Level 2): Aimed at the development and maintenance of small businesses in specific conditions of the local economy. The toolkit includes resource provision, property rights, and patent rights to support the entrepreneurial process and productive enterprises.

  3. 3.

    Business landscape diagnosis (Level 3): Systemic evaluation of the effectiveness of the small business impact mechanism on the economy, including facilitation at the provincial level. The toolkit includes monitoring, strategic management for long-term small business activity, and statistical analysis to track economic stability and identify new opportunities.

The implementation of the proposed mechanism for impacting small businesses in the economy of the province of Alberta contributes to the stabilization of both the local and national economies, providing the following positive aspects:

  • Supports stabilization and strengthening of the national economy;

  • Creates favorable conditions for the development of small businesses, ensuring access to resources and financing;

  • Reduces the impact of global factors;

  • Mobilizes economic activity, contributing to the creation of quality jobs and value addition, which promotes social and economic well-being.

The comprehensive set of measures proposes the following recommendations for improving the business environment:

  • Implementation of the proposed toolkit aimed at streamlining processes and reducing bureaucratic barriers;

  • Facilitation of the creation of favorable conditions for the development of small businesses, with particular attention given to providing access to resources and financing;

  • Development of innovative support mechanisms for small businesses, stimulating their technological advancement;

  • Implementation of programs and support measures aimed at strengthening economic activity and creating high-quality jobs;

  • Enhancement of the system for protecting small businesses from the impact of global economic factors.

The effective implementation of the above-mentioned recommendations will foster a dynamic and innovative business environment conducive to the sustainable development of small enterprises. This environment not only contributes to stabilizing the economy at the local and national levels but also opens up new prospects for entrepreneurship, supporting growth and competitiveness in the contemporary business world.

Discussion

The results presented in this study rely on the measurements and monitoring of traditional economic indicators: GDP and the employment market, as well as the indicators of demography and industry business landscape. These indicators underlie the traditional measures. They characterize business activity by business size and the number of businesses and households in the province, regarding economic activity by sectors. This study also considers recent global economic events that stimulate Canada to economic shifts. These events are the transition toward a zero economy and the restructuring of global trade relations with a focus on neighboring economies (Government of Canada, 2023a). The results of this study are consistent with the earlier conclusions (Korinek and Stiglitz, 2022). Previous researchers described strategies applicable to periods of major structural shifts in the economic system, for instance, the post-pandemic period. They emphasize the need to understand the changes in traditional economic measures and develop an effective economic policy. To this end, it is necessary to conduct a detailed analysis of business productivity and the population’s economic activity, regarding external macroeconomic factors. Therefore, to determine the state and development of the Alberta economy within the regional borders, this study, at the first stage, monitored the population and GDP over the past ten years. At this stage, the authors focused on the events of the last two years: the COVID pandemic and changes in oil tariffs. Data analysis showed that except for two periods characterized by global economic crises (2015–2016; 2019–2020), Alberta experienced an increase in economic development, which correlates with population growth. The resulting conclusion is consistent with the results of Kammer et al. (2022). The researchers reported that the economic environment in Alberta remains relatively favorable, mitigating the direct effects on the local economy. Sustainable development management in an unstable global economic landscape at the second stage predetermined the analysis of Alberta’s current business landscape by sectors. It revealed its two sides: business activity and sectoral structure. The results of the analysis showed that the business activity of Alberta focuses on the efforts and strength of small businesses. They strive toward economic growth through productivity and innovative practices. Our findings are consistent with Omar et al. (2020). The researchers claim that enterprise productivity is due to innovations introduced by small business leaders. These innovations imply financial and marketing strategies to ensure that business activity remains relevant in the face of external factors created by the COVID-19 crisis. At the same time, Muzi et al. (2023) assume that in times of crisis, less productive enterprises are more likely to close. The reason is a process of eliminating unproductive activities or Schumpeter’s “purge” of less productive enterprises. Unlike large businesses, small-sized enterprises have high flexibility to technical changes, a more active distribution of income, and better adaptability to market fluctuations. In addition, their organizational structure allows them to solve new problems faster (Gherghina et al., 2020). However, to realize this potential, according to the researchers, small businesses require a constant source of long-term external support to invest in growth opportunities (Ressin, 2018; OECD, 2021). The findings of Adam and Alarifi (2021) confirm this statement. Researchers believe that external support during the spread of the COVID-19 pandemic strengthens the correlation between survival and innovative small business practices. At the same time, the authors considered the relationship between innovation practices and the effectiveness of these enterprises. According to the results, external support is less important in the short term. An expert from YEDI supported this conclusion (Jones, 2023).

The analyzed literature focuses on external support for small businesses. This study, in turn, emphasizes small business involvement in the economic structure to maintain long-term business regarding the priorities of the sectoral structure in the province and the country as a whole. Thus, in the third stage, the study evaluated and analyzed the state and development of the economy and the sectoral business landscape in Alberta. As a result, it was possible to develop a set of measures for involving small businesses in stabilizing the economy. In general, to mobilize small businesses, it is necessary to consider four targeted policy measures within the framework of macroeconomic conditions and basic foundations. As noted by Wang et al. (2023), in the current macroeconomic situation, policymakers are striving to create dynamic entrepreneurial ecosystems to promote innovative entrepreneurship. In this context, entrepreneurial ecosystems will support technological startups aimed at high technology production at early and later stages. This approach will mitigate the macroeconomic external factors affecting national economies and increase economic activity. The measures developed in this study imply expanded interaction in the business landscape between all players. It moves large and medium-sized businesses from the vertical structures of the ecosystem to the horizontal structure of enterprises. In this structure, small businesses focus on the business productivity needs of large and medium-sized enterprises in terms of economic policy trends and potential economic opportunities and risks.

Conclusions

This study presents an analysis and economic principles that formed the basis of measures for involving small businesses in stabilizing the economy in the context of global economic problems. The study used monitoring data on GDP and population over the past ten years. As a result, it found that the economy within the regional borders of Alberta has a favorable economic basis for the development of small businesses against the background of global economic changes. The authors studied the distribution of business activity by business size, employment, and density of enterprises in the province. They revealed that the small business sector prevails in the structure of the local economy. This sector demonstrated high adaptability to the global economic downturn, as evidenced by the intensity of business activity aimed at economic growth and innovative practices to address societal issues. The largest contribution of small businesses to GDP during the spread of the pandemic was made by the mining industries, real estate industry, construction, and production. In other words, small enterprises in these industries accounted for about 50.0% of the added value in Alberta. The study focused on the economic sustainability of small businesses in the structure of Alberta’s economy and its response to global economic challenges. The results provide tools for involving small businesses to ensure the macroeconomic and basic conditions of the business landscape. The developed tools will strengthen Canada’s economy by stimulating the dynamics of the local economy. The tools rest on targeted economic policy measures aimed at mobilizing small businesses. The study also pays attention to the development of business landscape diagnostics, including monitoring; strategic management, which goes beyond quantitative indicators; and statistical analysis by experts in this field to measure the quality of the provided services. The implementation of the policy tools will create a healthy business environment for all players in the business landscape. As a result, the tools will improve the competitiveness of the economy of the province and the country.

The practical application of the results is potentially important for providing effective services. They may enhance the development and competitiveness of small businesses and the jobs they create in the prospects of economic policy at the level of local and national government. The direction of further research will focus on studying the differences between small, medium, and large businesses in terms of labor organization.

Further research may focus on analyzing factors influencing the successful integration of small businesses into the province’s economy. Evaluating changes in economic indicators, considering social innovations and corporate social responsibility is a key component for providing meaningful insights into the impact of innovative practices on various societal spheres. However, it is important to note a limitation of the current study, which is associated with limited access to statistical data on the business landscape of Canada in the province of Alberta, particularly regarding the small business aspect. This limitation may affect the relevance and accuracy of analyzing the current state and trends in the small business field in this region.