We’re digital laggards: 60% of SMEs don’t have web sites

Canadians are heavy users of social media, they do a lot of buying online and they’re actively embracing mobile technologies. But a whitepaper says SMEs’ digital engagement is way behind.

The current competitiveness gap between Canada’s digital economy and the gaps of other G20 nations can be closed with smart public policy, according to a whitepaper by The Internet Association, a group that calls itself the voice of “America’s leading internet companies.”

Reasserting Canadian Internet Competitiveness cites a 2014 report by Comscore that ranks Canada first overall in the number of web pages visited per month. A separate report by the Canadian Internet Registration Authority (CIRA) reveals Canadians are second to the US for the average number of hours spent online per user. Yet just 41.1% of Canadian SMEs have a website.

The whitepaper concludes that increased adoption of online activity by small and medium-sized businesses is desperately needed to encourage economic growth.

According to CIRA, the digital economy already accounts for 3% ($49 billion) of Canada’s GDP, which is 25% in other G20 nations.

The whitepaper says Canada’s digital challenges stem from at least three factors: firms chronically underinvest in digital technologies; a lack of access to capital investment from domestic and foreign sources that creates a drag on dynamism in the digital economy; and policy-makers have been slow to embrace the internet economy as a source of dynamism, innovation and productivity.

Invest in technology
Digital Canada 150, a national digital strategy announced last April by the federal government, lists 39 initiatives, including a $305-million investment to increase internet and wireless service accessibility to 98% of the population.

It also calls on the Business Development Bank of Canada to invest $300 million in digital technology companies and $200 million more in businesses looking to adopt the internet in business models.

An additional $40 million would support up to 3,000 internships in high-demand fields with another $15 million going to internships with SMEs.

Funding for the Canada Accelerator and Incubator Program will increase to $100 million, and there’s $20 million over two years for the Business Innovation Access Program, which supports R&D by connecting SMEs with universities, colleges and other research institutions.

But the report warns the digital strategy won’t be enough to bring Canada up to speed in the fast-moving digital world.
Among other recommendations, it notes Canada’s rules governing the digital economy are unnecessarily complex and warns against introducing new barriers to digital commerce, citing CASL (anti-spam legislation) as an example.

“The government can grow the internet economy with supportive policies like tax credits that encourage small and medium sized businesses to adopt digital technologies,” said Michael Beckerman, CEO of The Internet Association.

Visit www.internetassociation.org for a copy of the report.

This article appears in the March 2015 issue of PLANT.