Canadian SMEs warming to emerging markets

Four per cent increase in exports anticipated among SMEs in 2012

MISSISSAUGA, ON, Jan. 10, 2012 /CNW/ - Canada's small businesses say they will begin to look to emerging markets for export opportunities to supplement their trade activity with the United States, according to a recent study commissioned by UPS Canada.

The Angus Reid survey shows one in five SMEs (21 per cent) say they will consider conducting business in emerging markets such as China, India or Mexico with some looking to broaden their export practices to overseas markets.

The shift in attention is being spurred by a greater sense of optimism related to emerging markets with 59 per cent of SMEs believing blooming middle classes in these markets have a growing appetite for Canadian goods. There is also a sense that current national export activity predominantly carried out by big business is not sustainable over the long term. In fact, two-thirds of the survey respondents were unsure that Canada can remain globally competitive if export generation comes solely from large enterprise.

The survey further reaffirmed predictions by Export Development Canada from earlier in 2011 that exports would grow by seven per cent in 2012 with four per cent of SMEs claiming that they intend to begin exporting in 2012 and 14 per cent expecting to sustain existing export practices. Longer term export prospects are more modest with only eight percent planning to begin exporting in 2013 and fewer still in 2014 at five per cent.

"There's definitely been a positive shift in small businesses' perception of global trade," said Nicolas Dorget, vice-president, UPS Canada. "Hopefully the trend will continue, because the Canadian economy needs more businesses — regardless of size — to be engaged in building the country's international trade presence beyond North America."

Dorget noted that despite the growing trend toward global trade, the Angus Reid survey also revealed that many businesses prefer to keep their business practices close to home. In fact, 62 per cent of Canadian SMEs would prefer to use suppliers and partners within Canada even if they are more expensive than those from overseas.

In addition, many SMEs are also hesitant to build their businesses beyond their local areas with 50 per cent stating they intend to limit business activity to their home province over the next 10 years.

"We're seeing an emerging disparity among SMEs in Canada," said Dorget. "There are those who are beginning to realize that taking advantage of emerging markets is extremely lucrative and not nearly as complex as they had previously thought, and then there are those who are withdrawing or who feel there's no demand for their product or service beyond Canada's borders."

About the survey

From Oct. 20 - 25, 2011, an online survey was conducted among a sample of 552 Canadian small and medium business owners who are Angus Reid Forum panel members. The margin of error on the full base — which measures sampling variability — is +/- 4.1%. Discrepancies in or between totals are due to rounding.

About UPS

UPS (NYSE:UPS) is a global leader in logistics, offering a broad range of solutions including the transportation of packages and freight; the facilitation of international trade, and the deployment of advanced technology to more efficiently manage the world of business.  Headquartered in Atlanta, Ga., UPS serves more than 220 countries and territories worldwide.  The company can be found on the web at UPS.com and its corporate blog can be found at blog.ups.com.  To get UPS news direct, visit pressroom.ups.com/RSS.