Technology is rapidly changing the way we do business. Fortunately, there are tools to help businesses of all sizes innovate, increase productivity, streamline operations and do business online.
However, Canadian entrepreneurs are not investing as much in technology as their counterparts in other countries. Are we missing out on opportunities?
Based on data published by the Centre for the Study of Living Standards, Canadian firms invested an average of $2,553 US per worker in technology in 2011.
Canadian companies lag behind
During the same period, American firms invested an average of $3,938 US per worker. Thus, Canadian companies invested only 65% as much as their American counterparts.
Technology investments can be broken down into computers, communications and software. For computers, Canadian businesses spend about as much per worker as those in the U.S. However, Canadian companies lag seriously when it comes to investing in software. Overall, Canadian businesses have invested so much less over the past two decades that the cumulative value of Canadian technology assets was just 48% that of the U.S. in 2011.
Tech investments are crucial
This gap is surprising and worrisome because these investments are crucial to business success. A good example of this is in the manufacturing sector.
Manufacturers are changing the way they do business, including by offering services to complement their products. Indeed, services accounted for 21% of the export earnings of Canadian manufacturers in 2012. Technology plays a crucial role in providing those services.
I recently met with a group of successful entrepreneurs who told me how critical technology is to their success in today’s business environment. One of the entrepreneurs, a furniture manufacturer, offered a great example of how it can transform a business.
Company transforms itself
Established more than 70 years ago, this business was struggling with new competitors, especially those in China. Then, in 2007, it transformed itself by adding a service component to its manufacturing business.
The company now has the capability to receive orders directly from shoppers via the e-commerce websites of retailers. It then manufactures the furniture and ships it directly to customers anywhere in North America within 48 hours.
They are no longer just a furniture manufacturer. They are a full service provider to furniture retailers.
Technology made it happen
This Canadian company is now growing rapidly in a market that has been losing ground in Canada.
Its transformation wouldn’t have been possible without major technology investments. These systems have allowed it to differentiate itself in the market and move away from competing purely on price.
Technology is changing our world and ratcheting up the competition on your business. You can make up for lost ground and win the race, but you’ll need to invest to compete and seize new opportunities.
There’s no better time to start than right now.
This article was published in BDC’s Profit$ magazine.
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