Dig­i­tal ma­tu­rity

Busi­ness Devel­op­ment Bank of Canada mak­ing $250M avail­able for busi­nesses to in­vest in tech­nol­ogy

The Guardian (Charlottetown) - - BUSINESS - BY TER­RENCE MCEACHERN ter­rence.mceachern@the­guardian. pe.caTwit­ter.com/ter­ry_mcn

In life, the more ma­ture you are the more likely you are to be suc­cess­ful.

For the Busi­ness Devel­op­ment Bank of Canada, the same can be said for small-to-medium sized busi­nesses.

Re­cently, the BDC an­nounced it was mak­ing $250 mil­lion in fund­ing avail­able for busi­nesses that want to be­come “dig­i­tally ma­ture” and in­vest in tech­nol­ogy.

“What we re­al­ized is that the cul­ture is as im­por­tant as the money you in­vest. The cul­ture is not only to have a web­site, but what kind of value are you go­ing to bring to your con­sumer. And, how does this fit in your busi­ness model,” said Pierre Cler­oux, chief econ­o­mist with the Busi­ness Devel­op­ment Bank of Canada.

The BDC sur­veyed 2,000 com­pa­nies across Canada – all sizes and sec­tors – and found those with higher dig­i­tal ma­tu­rity also had higher sales and higher profit growth.

“Busi­nesses that are dig­i­tally ma­ture, they per­form bet­ter,” he said.

At­lantic Canada’s dig­i­tal ma­tu­rity, based on the sur­vey re­sults, was 15 per cent while the Cana­dian aver­age was 19 per cent.

Com­pa­nies that are dig­i­tally ad­vanced are in­volved in areas like on­line mar­ket­ing and sales and con­sumer data col­lec­tion that in­form changes to mar­ket­ing strate­gies. At the other end of the spec­trum are com­pa­nies that don’t have a web­site.

Cler­oux said man­u­fac­tur­ing and con­struc­tion are the least dig­i­tally ma­ture sec­tors whereas re­tail and busi­ness-to-busi­ness trans­ac­tions ranked the high­est.

Erin McGrath-Gaudet, P.E.I. di­rec­tor for the Cana­dian Fed­er­a­tion of In­de­pen­dent Busi­ness (CFIB), said the BDC has a point about the need for new tech­nol­ogy – as well as new equip­ment, train­ing and more ef­fi­cient pro­cesses – to im­prove pro­duc­tiv­ity, es­pe­cially as labour be­comes scarce as baby boomers con­tinue to re­tire.

“That’s go­ing to be a re­ally big, defin­ing trend over the next 10, 15, 20 years – how do we con­tinue to be pro­duc­ing goods and ser­vices and how do we con­tinue to grow our econ­omy and busi­nesses in an era where labour is go­ing to be less avail­able?”

She said be­com­ing dig­i­tally ma­ture can come at a cost, and busi­ness own­ers need to de­cide whether adopt­ing the new tech­nol­ogy is worth it and whether they can re­coup the costs of the in­vest­ment.

McGrath-Gaudet said smallto-medium sized busi­ness own­ers on the Is­land tend to fund in­vest­ments with their own prof­its rather than through a pro­gram.

“You have small busi­ness own­ers who are work­ing 70 hours a week. To then go on top of that… and to go through an ap­pli­ca­tion process and to wait maybe a cou­ple of months to see if you’re ap­proved — there’s a lot of red tape that goes along with ac­cess­ing those types of pro­grams.”

MITSUKI MORI/THE GUARDIAN

Erin McGrath-Gaudet, P.E.I. di­rec­tor for the Cana­dian Fed­er­a­tion of In­de­pen­dent Busi­ness, says busi­nesses need new tech­nol­ogy to im­prove pro­duc­tiv­ity, es­pe­cially as labour be­comes scarce as baby boomers con­tinue to re­tire.

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