Still, the ranking is lower than last year’s, which was A minus.
The drop, CeBI said, is due to key elements of Canada’s e-business infrastructure that remain and must be addressed before Canada can ensure its global competitiveness.
While the small to medium enterprise sector accounts for 60 per cent of Canada’s economic output, 80 per cent of overall national employment and 85 per cent of all new jobs, overall Internet business adoption among the smallest firms (fewer than 50 employees) continues to lag on a global scale.
Moreover, 28.4 per cent of Canadian firms have no plans to implement an Internet business strategy within the next three years.
The report said that this is the result of a lack of skilled talent and a shortage of time and money. For many SMEs, the report continued, there is a lack of scalable and SME-tailored e-business products.
But e-businesses have found that the Internet is paying off. On-line SMEs are achieving superior average decreases in cost of goods sold (10.7 per cent) versus the United States (6.9 per cent) and the European Union (1.3 per cent).
Further, a typical Canadian firm with $10-million in revenue, $8-million in cost of goods sold and $1-million in general expenses could see profit increases of 158 per cent, compared with 153 per cent in the United States and 114 per cent in the EU. As well, there is considerable public-sector support for e-business, with Canada ranked number one in the world when it comes to Net readiness and Net usage.
This study defined small and medium-sized enterprises (SMEs) as firms with 500 employees or fewer. Stratified samples were taken from five industry sectors: manufacturing, financial services, retail/wholesale and distribution, communications and Internet service providers (ISPs), and the public sector.
Despite a legal and policy environment favourable to privacy and security, the commitment to on-line privacy and security practices among mainstream businesses remains low.
Canada’s strong economic performance is not well understood internationally, CeBI stated.
Studies of U.S. business show investor and general public perceptions of Canada’s economy as primarily resource-based and that “Canada’s innovation image is weak.”
Image and perception and not performance, CeBI concluded, are the major hindrances to attracting additional investment and skills to the Canadian market.
A related CeBI report, called Net Impact Canada: The International Experience, compared Canada’s e-business adoption of e-commerce among small to medium enterprises to three leading European countries and the United States. That study revealed that Canada compares very favourably, and even leads in key areas such as e-government.
The studies “clearly illustrate that governments and business in Canada must work to address the weaknesses which are holding us back from creating a dynamic, robust and productive e-business climate,” CeBI co-chairman Pierre Paul Allard said.
“We need a common understanding of strong, positive benefits of [Internet business products] adoption at all levels to push our economy forward.
“But the reality is that SMEs are operating in an environment that is missing consistency, resources and the stimulants needed to foster continued growth. The report acknowledges these obstacles and offers solutions to overcome the hurdles.”
The Fast Forward report recommended legislative change and an increased effort by government, industry associations and large firms to enhance SME e-business preparedness and meet privacy and security obligations.
The report also recommended that the federal government extend the capital-gains tax break to professional investors and institutions, so they can re-invest in e-business. The report also suggested the federal government should implement the announced changes to the rules governing qualified limited partnerships.
Finally, the CeBI report recommended that Canada needs to co-ordinate a marketing campaign for the digital economy that highlights the country’s connectivity, education levels and technological capabilities.
“After reviewing the research, it was apparent what Canada’s strengths and weaknesses are from an e-business perspective,” Canadian e-Business Initiative co-chairwoman Nancy Hughes Anthony. “We believe that the recommendations that have been developed, if implemented, can quickly put Canada back into the forefront of the global digital economy.”
The CeBI report was conducted in collaboration with Industry Canada, Cisco Systems Canada Co., the Schulich School of Business at York University, Momentum Research Group and IDC Canada.
Quelle: Globetechnology
