Businesses need to look elsewhere
Trump actions may impact small businesses
With U.S. President Donald Trump taking a heavy-handed approach and raising import barriers and cancelling free-trade agreements during his first week in the White House, it may be time to convince Canadian small businesses to look more closely at other markets.
That is the view of officials from the Asia Pacific Foundation of Canada, who on Monday released a series of 10 reports looking at how governments in seven other nations encourage small and medium-sized enterprises to do business in foreign countries.
Eva Busza, vice-president of research at the foundation, said the organization hadn’t planned on releasing the reports during Trump’s first week in office. But Busza felt the recent news out of the White House — from the United States pulling out of the 12-nation TransPacific Partnership to the threat of a 20-per-cent tax on Mexican imports — may jolt some Canadian businesses out of the complacency that comes with easy access to the largest economy in the world.
“We’ve all been talking about the need for greater diversification, that it’s just unwise to ever depend on a single market for the majority of your goods,” she said. “And I think what’s happening now — obviously, we don’t yet know how all the policies in the U.S. will take shape and affect us — but it does suggest some of the dangers of relying so much on one market.”
The foundation commissioned the reports, collected under the title Learning from Global Innovative SME Export Assistance Programs, in early 2016 through federal grant funding. The result is 10 documents, written by researchers at Ryerson University and California Lutheran University, that look at moves made by Britain, India, Australia, Austria, South Korea, Israel and Germany to encourage small businesses to internationalize.
Gerhard Apfelthaler, dean of California Lutheran’s School of Management and author of several of the reports, said the key value for Canada is to see what other countries are doing to get foreign business. He noted that India operates a foundation solely for fostering the country’s “brand equity” to counter perceptions of the country producing inferior goods.
For Austria, the strategy is to embed its tech-sector start-ups directly into Silicon Valley by monitoring the needs of the U.S. industry and selecting the right Austrian firms to send to California incubators. Germany, meanwhile, offers full accounting services to small businesses going abroad.
“It’s about listening to your companies,” Apfelthaler said. “I think the German Accounting Service is an interesting example of that. Few companies have the resources and the knowledge to start a fully integrated operation abroad from the get-go.… Typical support functions like accounting are often overlooked, but desperately needed. That’s why the Germans offer that service which allows German subsidiaries abroad to have more focus on their core activities.”
Busza said some of the ideas presented are applicable in Canada and B.C., such as the British “Ex- port Communication Review,” which links up small businesses looking to go into certain countries with international students from those countries studying in the U.K.
“The student helps review all the communication strategy, translate materials and websites,” Busza said. “Particularly for Canada, where we have so many students in our universities and institutions with those languages and cultural knowledge, that idea is almost a no-brainer for creating the links (needed by small business).”
She added that Canadian firms will likely remain cautious about going into markets other than the U.S., unless the Trump administration’s trade policies start to erode profit levels. Nevertheless, recent events may mark a turning point.
“At this point, there are probably people who are watching or reading what is happening in the States, and they are getting nervous,” Busza said. “It may start drawing them to think about some of these other opportunities.”