The following is from the 19 October 2010 edition of “montrealgazette.com”.
The small business sector’s reluctance to pursue international trade is hurting the economy, and could have cost 300,000 jobs in missed opportunities and positions in the past decade, says CIBC World Markets.
The number of small-and medium-sized businesses involved in export activity has fallen to nine per cent from 10.7 per cent since 2000, despite the growth in globalization, the report says.
“This low level of internationalization carries a significant … economic cost given the importance of emerging markets to the global economic recovery,” said CIBC deputy chief economist Benjamin Tal.
As Bank of Canada governor Mark Carney warned in a recent speech, Canadian companies now face an American economy expected to show slow growth over the next decade, along with the increased risk of U.S. protectionism.
Tal concurs, saying “the traditional engines of growth during recoveries (housing and consumer) will not be able to fulfil their usual role.”
But opportunity exists for Canadian firms in the reorganization of production at the international level, through outsourcing and the development of global value chains, he said.
“Increased U.S. exports to emerging markets means increased options for Canadian SMEs (small-and medium-sized businesses) to participate in the supply chain momentum that this trend generates,” adds Tal.
“Currently close to 30 per cent of Canada’s trade is being sold as inputs into global supply chains. The changing engine of growth south of the border can provide SMEs with a golden opportunity to become a larger player in this expanding space.”
SMEs currently generate one third of the total value of Canadian exports with an average value of $4.6 million per firm, Tal said.
