Canada’s economic recovery needs a small business rebound
RBC releases a five-point plan to help small business pivot to a post-pandemic economy.
TORONTO — RBC has released a five-point plan to help Canadian small businesses thrive in a post-pandemic economy.
The bank’s report includes economic research and analysis from a survey of small businesses, which generated 22,000 responses. It cites two core challenges facing the country’s million plus small (up to 100 employees) businesses. The sector recorded almost double the rate of job losses as mid-sized and large firms during the first two months of the global pandemic.
RBC says the health crisis has created new economic trends such as a swing to online purchasing and is accelerating others, which requires small businesses to pivot into a more virtual, local and fragmented operating environment. But Statistics Canada has noted a significant number of small firms are without a website, or the ability to facilitate online payments.
“Small firms will need to seize on new technologies and permanently altered consumer preferences to attack markets and build brands in entirely new ways,” says John Stackhouse, a senior RBC vice-president. “While resilience will be important, adaptability will be critical.”
Here’s RBC’s five-point plan:
Streamline relief programs for the recovery. Ottawa’s relief programs are helping to keep small companies in business. But some of the programs are too complicated or too dependent on debt instruments. With a shift from relief to recovery and a slow rebuild, the federal government has an opportunity to refresh and streamline those relief efforts.
Invest in capacity to reopen safely. Many smaller businesses, experience or expertise to operate in a transformed economy and work environment, will be challenged to reopen. Provincial governments, which have been more focused on public health than private enterprise, can help both by investing in broad-based programs to assist employers as they try to get back to business.
Create new networks for a massive digital push. The pandemic has led to a big increase in cross-border data flows, and a greater concentration of power among global platforms that are helping consumers search, share and shop from a distance. Canadian enterprises need to pivot to this growing reality.
Implement new economic strategies to scale small business. Small firms will need to form alliances to compete in the global platform economy that will be more fragmented, more localized and more challenging. Scale will matter to drive efficiencies for consumers who may want local for less. Governments and large enterprises may have the opportunity to create Canadian alliances for procurement and supply chains that will strengthen the economy and communities across the country.
Adopt a more strategic approach to globalization. The pandemic upended supply chains and exposed some of the unintended consequences of globalization. Small firms that retooled to produce critical products such as masks and ventilators highlighted the capacity of Canada’s manufacturing sector to pivot and innovate quickly. Small firms will need to do a lot more of that, and not just for the domestic market. In a world that is likely to be more fragmented, and perhaps less welcoming to foreign firms, Canada will need a more focused approach to trade.