From beaver pelts to auto parts and yoga pants, Canada has always been a trading nation. But do we have what it takes to compete in the global marketplace?
In recent years, Canadian exports have been hard hit by declining commodity prices and the shrinking manufacturing base left behind as commodity production shifts to lower-cost countries. Without robust exports, Canadians will be hard-pressed to sustain the economic growth that has made this country one of the world's most prosperous - and most envied - nations.
But here's the good news. Canada's biggest trading partner, the United States, is enjoying robust economic growth. And a recent study by the Conference Board of Canada identifies key opportunities for growth of exports to the U.S. that Canadian companies aren't sufficiently pursuing. Significantly, many of these opportunities don't involve products, but services, meaning that Canadian businesses can flourish in the fastest-growing parts of the economy - the service sector, where brainpower and creativity matter more than labour costs.
The study, entitled "Taking Advantage of the U.S. Economic Rebound," identifies 11 Canadian industries that are well prepared for expansion and competitiveness in the U.S. Of those, the study finds five broad sectors that are best positioned to take advantage of growing U.S. demand:
• Transportation and government services;
• Other commercial services (e.g., wholesale trade and administration);
• Computer and information services;
• Food manufacturing;
• Finance and insurance services.
To learn what it takes to crack U.S. markets, the study, takes a close-up look at three current Canadian success stories: Spin Master, a Toronto -based toy and media company whose top brands include Air Hogs and Paw Patrol; Vancouver-based Global Relay, which provides message-management services for major corporation, including 22 of the 25 top global banks; and McRae Imaging, an innovative digital-graphics printing company based in Mississauga, Ont.
The report notes four key characteristics of winning exporters:
• they have skilled executives with strong vision and a growth mindset;
• they create competitive advantage through a proven capability to innovate;
• they identify export opportunities through their practical knowledge of foreign market;
• and they access support through international contact networks.
So interesting to see that export success isn't based on size, clout, or legacy brands. Market-driven innovation and attention to details makes all the difference. Through doable tactics such as implementing new internal processes and leveraging external partnerships, companies can make the decision to grow.
This encouraging news is especially important today because the Canadian export narrative in recent years has been so negative: shuttered factories, lost jobs, chatter that we're no longer competitive. Combine that with recent protectionist trends such as Brexit and shrill calls to build "walls" between nations, and it's no wonder many Canadians - including business leaders - question our ability to compete.
Studies such as this, which was commissioned by HSBC, prove that export success can be a choice, not a fluke, for Canadian companies that are serious about growth.
Canada has a robust entrepreneurial ecosystem, but only one firm in 10 exports its goods or services abroad. This new study reminds us that other markets are hungry for goods and services Canada can provide. But if individual businesses and entrepreneur don't actively study new markets, and develop the capability to serve them, then potential customers will buy from someone else.
To learn more about how to take advantage of U.S. export opportunities, HSBC is conducting a webinar on "Connecting for Growth" on Oct. 27, 2016. 2 pm Eastern time, 11 am Pacific time.
Register for the webinar here