Small businesses in Canada will begin to look to emerging markets for export opportunities tosupplement their trade activity with the United States, according to a recent study commissioned by
UPS Canada.One in five SMEs (21%) say they will consider conducting business in emerging markets such asChina, India or Mexico with some looking to broaden their export practices to overseas markets, theAngus Reid survey showed.
The shift in attention is being spurred by a greater sense of optimism related to emergingmarkets with 59% of SMEs believing blooming middle classes in these markets have a growing appetitefor Canadian goods. There is also a sense that current national export activity predominantlycarried out by big business is not sustainable over the long term. In fact, two-thirds of thesurvey respondents were unsure that Canada can remain globally competitive if export generationcomes solely from large enterprises.
The survey further reaffirmed predictions by Export Development Canada from earlier in 2011 thatexports would grow by 7% in 2012 with 4% of SMEs claiming that they intend to begin exporting in2012 and 14% expecting to sustain existing export practices. Longer term export prospects are moremodest, however, with only 8% planning to begin exporting in 2013 and fewer still in 2014 at just5%.
“There’s definitely been a positive shift in small businesses’ perception of global trade,” saidNicolas Dorget, vice-president, UPS Canada. “Hopefully the trend will continue, because theCanadian economy needs more businesses – regardless of size – to be engaged in building thecountry’s international trade presence beyond North America.”
Dorget noted that despite the growing trend toward global trade, the Angus Reid survey alsorevealed that many businesses prefer to keep their business practices close to home. In fact, 62%of Canadian SMEs would prefer to use suppliers and partners within Canada even if they are moreexpensive than those from overseas. In addition, many SMEs are also hesitant to build theirbusinesses beyond their local areas with 50% stating they intend to limit business activity totheir home province over the next 10 years.
“We’re seeing an emerging disparity among SMEs in Canada,” said Dorget. “There are those who arebeginning to realize that taking advantage of emerging markets is extremely lucrative and notnearly as complex as they had previously thought, and then there are those who are withdrawing orwho feel there’s no demand for their product or service beyond Canada’s borders.”
For the survey, an online survey was conducted from October 20 – 25, 2011, among a sample of 552Canadian small and medium business owners who are Angus Reid Forum panel members.
