With slower economic growth expected among developed countries over the next few years, Canadian small and medium-sized businesses will become key job creators, according to Scotia Economics.
Its report said that Canadian businesses will need to focus on high value-added, skill-based products and services that can plug into global supply chains or take advantage of unique local or international niche markets.
"At a time when the auto sector and other traditional manufacturing sectors are shedding jobs, new enterprises associated with environmental remediation, global infrastructure development and emerging market demands have the potential for sustained, rapid growth," Scotiabank chief economist Warren Jestin said in his report.
With foreign sales accounting for a third of Canada's GDP, Jestin said Canada's economy will remain dependent on the strength of economic growth in the U.S.
But gains will be tempered by as the loonie approaches par with the greenback as commodity markets strengthen and the U.S. dollar comes under pressure on global currency markets.
Canadian businesses would be wise to focus in markets other than the U.S. as most of the world's economic growth will remain in emerging markets like China, India and Brazil. Jestin noted that intra-regional trade in Asia is already double the trade flows between Canada, the U.S. and Mexico under the North American free Trade Agreement.
Said Jestin, "For many Canadian businesses, these new world realities point to tougher competition in traditional markets, but a world of opportunity in emerging ones."