1. Why is it important for Canada to cultivate large companies? Are Canadians just too shy to scale large?
There’s a wide-sweeping generalization across Canada that if you’re big, you’re bad. I’m not quite sure why. Perhaps it goes against our “nice” Canadian brand, but it is certainly no way to achieve economic prosperity.
Out of Canada’s 1.2 million businesses, only 2,900 are large businesses. This tiny fraction of all our businesses is responsible for 46% of our GDP, 75% of exports and 40% of employment. The big players do a lot of good for our economy. We need more of them.
Our growing debt does not bode well for our future. While our overall GDP grows, our per capita GDP has remained stagnant over the past decade. By developing and encouraging our home-grown Canadian entrepreneurs and recognizing the need to build more, large global players, we will create more high-paying jobs, a more resilient economy, and stronger communities right across Canada.
2. Why are successful, medium-sized businesses crucial to broad, economic growth?
Canada’s mid-sized businesses have enormous potential to evolve into large players. Our 23,000 mid-sized companies have already overcome the initial barriers to growth such as financing, fighting for market share, employee development, and now – surviving a pandemic.
If a substantial number of these companies double or triple their size by taking on a new market or embracing export opportunities, their contribution to our prosperity grows exponentially.
However, only 2% of our home-grown, mid-sized Canadian businesses make that leap. Across thousands of medium-sized businesses, we have the skills and business infrastructure to create broader prosperity within Canada, and our international reputation for integrity, tolerance, diligence, and innovative ideas gives us a head start. However, we are not seeing these advantages translate into the economic progress that we are capable of and that we need.
3. So, what’s next? What do business leaders and policy makers need to do?
Support is available, more is needed. I have seen Canada’s largest exporters share their experiences, lessons learned, and even their company resources with medium-sized players who are keen to take on the world. And there is a great deal of government support available – but more can and must be done to attack the high regulatory and other costs of exporting. The big free trade agreements do not do enough to grease the skids for our medium-sized companies so they can deliver to a global marketplace.
As we enter what we hope is the post-pandemic era, Canada’s leaders really need to think about how we are going to address our economic growth. We must become aggressive, diversified exporters; with our small population, small market, and declining US market share, Canada’s economic growth largely depends on it.
Canada is brimming with big opportunities. We have the resources, political stability, skills, infrastructure – the list goes on. But it’s up to us to ambitiously and aggressively take advantage of these opportunities to build the big, bright future that is waiting for us, and it won’t wait long. Let’s go.