Research Finds Great Hesitancy to Go Global
MISSISSAUGA, ON, July 18, 2007 - Canadian small- and medium-sized businesses (SMBs) say they are hesitant to expand their business beyond Canadian borders.
According to the UPS 2007 Canada Business Monitor, a study on SMB trends, 37 per cent of Canadian entrepreneurs surveyed believe they have enough business to deal with in Canada, while an additional 17 per cent say global trade is out of the question until they expand their business domestically.
"This is disconcerting when one considers that SMBs make up 98 per cent of Canadian businesses," said Mike Tierney, president of UPS Canada. "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."
The study indicates those SMBs that have chosen to conduct cross-border and international trade see the benefits of doing so and intend to continue the practice. Canada Business Monitor results show that almost half of SMBs trading internationally plan to expand their workforce in the coming 12 months versus 26 per cent of the SMBs who do not participate in international trade.
The results also show 65 per cent of importing SMBs and 56 per cent of exporting SMBs view globalization positively, while a little more than half of their non-importing, non-exporting counterparts are undecided.
Despite this outlook, Canadian SMBs are optimistic for success, believing the Canadian economy is more likely to grow than that of rapidly expanding markets such as India. In fact, two-thirds of those surveyed expect to see Canada growing economically over the next three years, second only to China in terms of economic growth. Equally as interesting, 24 per cent and 22 per cent, respectively, of SMBs see the Middle East and the U.S. declining economically over the next three years.
"Most Canadian businesses are positive about globalization; however, many feel challenged on how to begin international trade," said Tierney. "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."
Though they are reluctant to dive into global commerce, the vast majority of SMBs in Canada believe globalization to be positive or neutral, with only 15
per cent viewing it negatively. The favourable view of globalization is similar to data from the UPS Europe Business Monitor, in which businesses overwhelmingly said the shrinking of global commerce is a positive development - a direct contrast to Latin America, where SMBs are split down the middle on the benefits of globalization.
"There is a discrepancy between the actions of SMBs to expand internationally and their positive perception of Canada's future position in the arena of global commerce," said Tierney. "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."
Tierney is joining UPS colleagues in discussing the Canada Business Monitor study and the impact of these trends in a Webinar set to take place at 11:30 a.m. EST on July 18 at http://events.streamlogics.net/ups/jul18-07/index.asp?lang=english. The webinar will be available at this link for 90 days following the presentation.
The Canada Business Monitor study was conducted by TNS Canadian Facts on behalf of UPS Canada between March and April 2007. Research involved surveying 637 strategic decision-makers in Canadian SMBs throughout the country in both English and French. The overall margin of error is +/- 3.9 per cent.
UPS, which celebrates its 100th anniversary in 2007, is the world's largest package delivery company and a global leader in supply chain services, offering an extensive range of options for synchronizing the movement of goods, information and funds. Headquartered in Atlanta, Ga., UPS serves more than 200 countries and territories worldwide. UPS's stock trades on the New York Stock Exchange (UPS) and the company can be found on the Web at www.ups.com. To get UPS news direct, visit pressroom.ups.com/RSS.
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