Self-employment
Global market awaits Canadian entrepreneurs who are willing to seize new opportunitiesSmall can be bigToo many barriers and too much opportunity at home are keeping Canada's small- and medium-sized business from expanding into the global market, says Mike Tierney. |
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 [ 2007-07-22 ] |
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The study, called the UPS 2007 Canada Business Monitor, shows that 37% of Canadian entrepreneurs surveyed believe they have enough business to deal with in Canada, while an additional 17% say global trade is out of the question until they expand their business domestically.
"This is disconcerting when one considers that SMBs (Small-and Medium-sized Business) make up 98% of Canadian businesses," he said during a web presentation of the survey. "Canada runs the risk of being left behind in the increasingly competitive global market unless there is a shift in the practices of our entrepreneurs to capitalize on the international trade opportunities available to them."
EMERGING MARKETS
Pat Stanghieri, UPS Canada's vice-president of marketing, underlined the importance of thinking big, even if your business is small.
"With emerging markets, such as China and India, growing their trade exponentially, it is imperative Canadian businesses follow suit or risk becoming irrelevant in a global commerce," he said.
Of great concern, said Stanghieri, is "Canadian entrepreneurs belief that Canada is set for significant economic growth, second only to China, without necessarily having to go beyond the boundary of the 49th parallel," he said.
Tierney pointed out that the Conference Board of Canada last month reported that Canada placed 11 out of 17 developed countries for its economic growth, citing complacency as the number one reason behind its performance.
"If you just look at ... China or India, they are massive markets," said Tierney. "They really remain unexplored for Canada. We exported $556-million between Canada and China in 2006, which represents less than 1% of China's overall world imports."
However, the small number of companies -- less than a quarter -- that have expanded beyond the nation's border have met success, the study shows.
"Companies that have expanded globally are benefiting from the effort," said Tierney.
"We've seen that once companies move their business beyond Canada's borders, they're more likely to experience the financial growth needed to allow a greater expansion (domestically and internationally)."
Despite the reluctance to enter the global market, most businesses either agree with the basic idea or are neutral about it, said Tierney.
"Most Canadian businesses are positive about globalization, however, many feel challenged on how to begin international trade. This matches the Canada Business Monitor results, which identified sourcing with trustworthy suppliers and understanding complex trade practices as major barriers to SMBs expanding globally."
This favourable view of globalization is similar to a European study carried out by UPS that showed businesses there also see globalization in a positive light, said Tierney.
"There is a discrepancy between the actions of (Canadian) SMBs to expand internationally and their positive perception of Canada's future position in the arena of global commerce."
"There is opportunity for Canadian business to achieve the anticipated success expressed in the research. To do so, businesses must leverage the wealth of resources available to them, taking a determined approach to global trade."
Kyle McNamara, head of customer segments and small business with Scotiabank said he wasn't surprised with the UPS study's findings.
"The vast majority of our small- and medium-sized businesses are small -- about 80% of them employ five people or less and there isn't a huge opportunity for them to grow globally," he said.
But for the other 20%, there are real barriers, with the biggest one being education about the opportunities available to them and the knowledge of how to tap into those opportunities.
"Expanding globally is something they should definitely explore," said McNamara. "Depending on what their business is, they might find it very worthwhile."
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