Small and medium-sized businesses (SMBs) are eager to jump onto the digital transformation train, but need support from both industry and the government, according to a new report from Startup Canada.
According to “The Effects of Advanced Digital Technologies on Canadian SBOs (small business owners),” released last week by the Ottawa-based advocacy organization, 83 per cent of Canadian SMBs surveyed believe that digital technology advances over the next decade or two will have a positive impact on their business growth, while 77 per cent said they were adopting advanced technology to improve productivity; 67 per cent said they were using advanced technology to improve their customer experience; and 61 per cent said they were using it to reach new customers.
However, 79 per cent of respondents also believed there were disadvantages to adopting cutting-edge technology, including security risks, maintenance costs, and technological failures; and the majority also reported believing the government and technology industry have leading roles to play in closing the so-called skills gap, by investing in digital literacy training for mature workers; supporting students who pursue Science, Technology, Engineering and Mathematics (STEM) fields; and adopting the newest technology themselves.
In a Nov. 16 statement, Startup Canada CEO and co-founder Victoria Lennox said that while advanced technologies such as AI and machine learning are redefining entrepreneurship in Canada, the report makes it clear that small businesses need support from the industrial, government, and technology sectors if they truly want to build companies capable of competing in the 21st century.
“Canadian SBOs must keep pace with the rapidly evolving digital ecosystem if Canada is to maintain a competitive edge in the digital global economy,” Startup Canada mMarketing, communications, and digital​ production​ administrator Lindsay Bright wrote in the Nov. 16 report. “The fusion of technology across the physical, biological and digital worlds creates immense opportunities for Canadian SBOs, but only if they have the skills and access to the tools necessary to capitalize on these new possibilities.”
The study, the last of a four-part series that included the reveal of a gender divide between digital-native small businesses and their more Luddite counterparts, was based on research conducted between June 29, 2017 and July 31, 2017 of 428 small business owners across Canada.
More digital than you’d think
For advocates of digital transformation, the report contains welcome news: approximately 65 per cent of respondents reported incorporating cloud services and data centres into their operations; 34 per cent incorporated mobility solutions; 28 per cent incorporated the Internet of Things (IoT); and 15 per cent incorporated artificial intelligence (AI).
Moreover, 42 per cent indicated plans to adopt AI-based machinery in the future; 40 per cent said the same of cloud services and data centres; 33 per cent indicated plans to adopt IoT; and 31 per cent plan said they planned to adopt mobility solutions.
However, the report also found that with the digital economy evolving at such a rapid pace, SMBs are having difficulty locating the resources needed to keep up, with 27 per cent of respondents saying they lacked the necessary tools and training, including funds, mentorship, and training information.
In all, 44 per cent of respondents cited the high cost and time associated with updating and maintaining new technology platforms as their main barrier to digital adoption.
The solution, Startup Canada’s Bright wrote in the report, lies with government and industry: 76 per cent of respondents said they believe government can help by investing in digital literacy training for mature workers; 71 per cent suggested supporting digital skills building opportunities for Canadians in elementary and high school; 61 per cent suggested encouraging students to pursue post-secondary studies in STEM fields; and 38 per cent suggested creating incentives for small business owners adopting digital tools.
Another 18 per cent also said they believe industry can lead by example by adopting the newest digital technology first.
“As technology advances, SBOs need to ensure that they are able to keep up with the rapid rate of change,” Bright wrote in the report. “Falling behind on these critical skills can be detrimental to the success of Canadian businesses, and since small businesses are responsible for employing more than 90 per cent of the Canadian private sector workforce, it is important that government and industry partners invest in and incentivize advanced technology use amongst SBOs.”
You can read the full report here.
