Digital technologies, from email newsletters to project management software, have become central components of how businesses operate, market themselves, and generate sales. With COVID-19-related restrictions forcing businesses to move their operations online, digital management and communications tools have become even more integral in helping companies stay afloat. In particular, e-commerce functionality is becoming essential as Canadians’ online spending grew to $84.4 billion in 2020, up 47 percent over 2018.
But not all Canadian businesses are making the most of these digital technologies. Small and medium-sized enterprises (SMEs) in Canada are lagging bigger firms in terms of digital maturity, with 57 percent scoring low in both technological adoption and digital skills, and only 19 percent scoring high on both, according to a 2018 BDC survey. This means that SMEs lack both the technologies they need to compete in a post-pandemic environment, as well as the knowledge and leadership to successfully integrate it.
SMEs make up a significant part of Canada’s economy, comprising 99.8 percent of all businesses and employing 10.8 million people. SMEs represented 70 percent of hours worked in Canada in 2008, versus 56 percent in the U.S. Yet compared to our U.S counterparts, Canadian SMEs are not investing as much into digital technology, missing out on opportunities and growth in a range of their business operations.
A recent report from the Brookfield Institute, Picking Up Speed: Digital Maturity in Canadian SMEs and Why Increasing it Matters dives into the state of digital maturity among Canadian SMEs, some of the barriers businesses face in digitizing, and why increasing digital maturity matters. In the report—produced in partnership with the Toronto Regional Board of Trade, World Trade Centre Toronto, and the Scale-Up Institute Toronto, and sponsored by Xero—the research found that digital maturity among SMEs benefits not only individual businesses but local communities, and the economy at large as well. Here’s why: