Canadian Economy by rio17490


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									Strategies for promoting SME
Engagement in the e-Economy
          Sheila Smail
         SME Congress
          Mexico City
           May 2006
      e-Business has entered the
        economic mainstream
The Economist, May 15 2004

“E-commerce will continue to
change every kind of business,
offline as well as online…”

                                 Business Week, May 10 2004

                                 “The Web players new assault
                                 should keep the productivity
                                 gains coming.”                 2
ICTs essential to wealth creation in
      the global e-economy
                                The e-Economy is characterized by:
                                                       • the exchange of
                National policy                          goods and services
                  platforms for   Regional
                  e-Business , & integration             through online
                 e-government, strategies                transactions
     Greater                          Access for
    Availability,                        SME’s         • the effective use of
                                           Access to     ICTs
                  Virtuous                   global
                                            economic      – to spur product and
 Sustainability    Circle                   exchange        process innovation
                                                            across all sectors of
                                       New money
                                           and              the economy
       Increased                       profitability
      Capability of                                       – To link SMEs to the
       Networks            Generating
                       Revenue Streams
                                                            global economy to
                       for Infrastructure                   drive wealth creation
                                                          – To enable and
                                                            enhance the impact
                                                            of entrepreneurship     3
  Canada’s foundation for a 21st
       century economy

• Three strategic objectives:
  – a fair, efficient and competitive marketplace;
  – an innovative economy; and
  – competitive industry and sustainable communities
• Connecting Canadians (1990s)
  –   Canada On-Line: access to networks
  –   Smart Communities
  –   Canadian Content On-Line
  –   Connecting Canada to the World
  –   Government On-Line (GOL)
Policy framework for e-Commerce

• OECD Ministerial in 1997
• Electronic Commerce Policy (1998):
    •   Privacy protection framework legislation
    •   Cryptography policy
    •   Electronic signatures legislation
    •   Public key infrastructure
    •   Consumer protection guidelines
    •   Tax neutrality
    •   Standards roadmap
 Early efforts to raise awareness

• 1998 Electronic
  Commerce Policy
  Framework in place
• Canada recognised
  as a world-leader in
• Lack of SME uptake
• Government-led awareness . . . not terribly
   Small Firms in the Canadian
• Small enterprises (<100 employees) account
  for 98.8% of Canadian firms
• Between 1985 and 1999 Small enterprises
  accounted for 661,000 new jobs, while large
  enterprises (500+) contributed -348,000
• Contribution to Canada’s GDP 22% (2004)
• In 2002, 85% of Canadian exporters were
  small businesses.

 Private-public sector partnership

   Phase 1
• Creation of the Canadian e-
  Business Opportunities
   – Goal: to accelerate Canada’s
     participation in the Digital
   – Created e-Teams to
     implement proposed
• Regional Roundtables –
  1500 participants
• Development of the SME
  Toolkit to address identified
  barriers to use of e-

                Is about building awareness   8
SME e-business information online

•   Basic
    information for
•   Easy to
    navigate and
             By 2001, Canadian SMEs were “aware”,
            yet many were not adopting, or were not   9
                   advancing “up the curve”
       Canadian e-Business Initiative

  Phase 2
• Launch of the Canadian
  e-Business Initiative
   – Mandate: to further
     Canada's e-business
     success by focusing on
     productivity, leadership
     and innovation.

• E-Corps Pilot Launched

• Net Impact Studies

              Is about trusted advisors and ROI
Creating meaning for Canadian
     Canadian Net Impact Studies
      • Canadian SME adoption
         – 50.2% of Canadian SMEs using or implementing
      • Firms that adopted realized substantial
         – Average revenues increased 7%
         – CoGS decreased 9.5%
         – SGA decreased 7.5%

             Example: A firm with $10M in revenues, with a
             20% gross margin and 10% net margin, can
             achieve increases in net profit of up to 150% in
             the "best case" scenario with these changes in
             revenues and costs.                                11
           Sector-specific tools
  Phase 3
• Conduct e-readiness
  impact assessments in
  strategic Canadian
  economic sectors
• Develop sector
  strategies and action
• Implement the strategy results (development
  of e-solutions, policies, standards etc.)

      Is about sector-specific information      12
          SME e-business learning
  Phase 1                         Phase 2                           Phase 3
Paper-based Internal              Basic Web-site                    Basic eCommerce site
Processes (no website)            (Brochure-ware)                   (secure transaction
                                                                    processing/order entry)

                  Increasing e-Business capability

Low or no awareness of            Understanding of need of web       Awareness of benefits
benefits of e-Commerce            presence, if only for providing    increasing, also investment risk
                                  information                        and security risks increasing

                          Learning Activities

Awareness-raising through        Computer literacy & Web savvy      Understanding of
media coverage of events,        – information sources and tools    security issues and high level
magazine articles, information   can now be web-based               of knowledge or trusted advisor
kiosks as SME fairs and                                             – information is web-based and
presentations at events                                             from advisors and experts      13
     Multi-stakeholder partnership is
•   A multi-sector approach is essential to the successful development and
    implementation of any national strategy
•   Multi-sector participation in the development of a national strategy will
    ensure a less interventionist and more industry-lead approach to policies
    and initiatives
•   The value of multi-sector partnership comes from leveraging partner
    networks and investments – not a cycle, it's a symbiotic relationship

    Public sector value      Private sector value Not-for-profit value
    supportive policy and    capital investment, R&D Critical role in
    regulatory environment   investment and          addressing economic
                             innovation              issues, i.e., skills
    strategic investment     “agent of reality”      commercialization
    trusted information      sound business advice   research
                             for SMEs
           Canada’s challenges

Uneven take-up of electronic commerce
   – SMEs lag behind larger firms in Internet access, web
     presence and online selling and purchasing
   – Only six sectors of the economy account for 80% of all
     Internet sales
   – Adoption rates vary by region: Atlantic Canada lags the rest
     of the country
Supply chain transformation
   – Canadian firms with their suppliers and clients are facing
     mounting pressure to co-ordinate and increase collaboration
     in their business activities and processes
   – The inability to modernize will drive Canadian companies out
     of global supply chains
Competition for attention on the political agenda
Muchas Gracias

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