The number of Canadian small and medium-sized enterprises (SMEs) engaged in export activity has fallen over the past decade, which does not bode well for future growth, according to a report by CIBC World Markets.
The number of SMEs engaged in exports has fallen from 10.7% in 2000 to 9%. This declining level of internationalization carries significant economic costs given the importance of emerging markets, according to Benjamin Tal, deputy chief economist at CIBC.
“Canadian SME’s have not responded in a way that optimizes their long-term growth potential and their contribution to the Canadian economy as a whole.”
While Canadian SME’s were insulated from the global recession, Tal suggests, the same local focus will likely hinder them during the recovery.
He noted several global studies that have shown internationally active SMEs generally outperform their domestic counterparts, creating significantly more jobs and are far more innovative.