Small business in Canada has a problem with adopting digital technologies, and one of the worst offenders is Atlantic Canada.
That is the finding of a new report by the Business Development Bank of Canada that assesses the digital maturity of small and medium-sized businesses in this country. It found that 15 percent of SMEs in Atlantic Canada could be considered digitally mature. That ranks with British Columbia and the North as the worst rating in Canada, well below the national mark of 19 percent and Quebec’s first-place mark of 26 percent.
BDC, the federal agency that finances business, released the report to launch its Small Business Week. The bank also announced it would set aside $250 million to lend to SMEs to help them improve their adoption of digital technologies.
“Technology is changing investment patterns,” said the bank in a statement. “The goal of BDC’s additional financing envelope is to help Canadian entrepreneurs increase their digital adoption, fuel market expansion, launch new marketing campaigns, develop new products or hire and train additional employees to enhance productivity, growth and success.”
The report stresses that digital maturity is important, as businesses that adopt new technologies out-perform those that don’t. It said businesses with higher digital maturity are 62 percent more likely than their peers to have higher sales growth and 52 percent more likely to increase profits.
The flip side of this, of course, is that companies with low digital maturity have problems. One quarter of these SMEs have suffered falling sales in the last few years, said the BDC.
The bank is basing its data on a survey of 2,000 Canadian SMEs. For the sake of comparison, it also surveyed 600 American small and medium-sized businesses, and concluded the digital maturity is about the same on both sides of the border.
Material on the bank’s website indicates that the factors it considers in assessing digital maturity include a company’s use of tools for communication, marketing, eCommerce, data analytics, productivity and digital manufacturing.
The bank is now offering SMEs loans to help them invest in intangible assets that can help improve their use of these products. It has also released a free online digital maturity assessment tool to help businesses compare their use of technology with their peers.
“Today, almost 40 percent of all business investments are intangible assets such as technology, research and development, innovation, intellectual property and employee training, as opposed to tangible assets like equipment and real estate,” said the bank.