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Canadian SMEs Remain Skeptical About International Trade

Lack of interest and investment despite countless opportunities overseas

flagsNewly-released data shows that small to medium-sized enterprises (SMEs) are still hesitant to engage in international trade, despite the vast opportunities in the worldwide marketplace.

In part two of its three-part series to study SMEs’ global trade habits and attitudes, the survey, commissioned by UPS Canada, revealed that 52 per cent of SMEs would not take advantage of a free-trade deal with the EU — not because it’s with the EU, but because they have no interest in engaging in trade activity at all.

UPS Canada President Mike Tierney said the results are not surprising, but do present a concern about the future economic competitiveness of Canada’s businesses. “Given the turmoil taking place in the U.S. and European markets and much talk about the possibility of a double-dip recession, it’s understandable that many SMEs are reluctant to invest in expanding their enterprise beyond Canada,” said Tierney. “However, it’s very important that Canadian SMEs realize that in order to remain relevant and competitive in the future, they should leverage the economic opportunities emerging in overseas markets.”

Despite consistent encouragement to go global, the survey found that 61 per cent of SMEs would not be willing to invest – at all – to take their business beyond Canada. Just more than a quarter would only be willing to invest less than 20 per cent of their business capital.

In addition, almost 40 per cent of respondents believe that businesses should confine their commerce within Canada in order to sustain the country’s currently strong level of competitiveness. The numbers do not bode well for Canada’s growing trade deficit, which currently stands at record levels.

Tierney said he empathizes with the struggles that many businesses go through when it comes to expanding their businesses and notes that entrepreneurs are often discouraged from investing because they mistakenly believe they have to make massive investments into their own proprietary supply chain infrastructure.

“It’s important that SMEs understand that as Canadian businesses they are currently in a very competitive position to enter the global market,” said Tierney. “There are many organizations, such as UPS, that can provide resources to help them identify new, strategic markets, plan strong supply chains and realize cost efficiencies that will expand the profit margins of their global commerce.”

The survey was commissioned by UPS Canada and completed by Leger Marketing. It was conducted among a random sample of 300 small business respondents across Canada between August 31 and September 13, 2010. This method simulates a probability sample, which would yield a maximum margin of error of +\-5.7%, 19 times out of 20.

The full second survey is posted on the UPS Pressroom website. The first survey, conducted in June 2010, is also available. Stay tuned for survey three, which will be available in November.

Category: Business Insights, Global Impact, UPS News
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    Comments [1]

  1. The global export business are one of the business around
    the world today, but the question is how it is being
    trade well to other country with a transparent results. In
    addition, almost 40 per cent of respondents believe that
    businesses should confine their commerce within Canada in
    order to sustain the country’s currently strong level of
    competitiveness. These are important matter to look at.

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