Canadian e-business gains ground

Canada closed in on the United States in some areas of e-business but experts say the gap remains substantial, and U.S. companies are much more optimistic than their Canadian counterparts about the expected payoff from their e-business investment.

The findings are part of on-going research, released by the Canadian e-Business Opportunities Roundtable’s e-Business Acceleration team, led by John Wetmore, vice president of and IBM Americas. The research was conducted by IDC Canada and its U.S.-based parent, International Data Corp.

IDC projects a compound annual growth rate for the Canadian e-Business sector of 63.1 per cent through 2005, compared to 62.3 per cent in the U.S.

However, U.S. businesses expect to see strong returns from their investments in e-business, much more so than their Canadian counterparts. U.S. small businesses said they expect 17 per cent of their 2001 revenues to come via the Internet, compared to just over 3 per cent for Canadian small businesses; U.S. medium businesses said 6.5 per cent compared to 3 per cent for Canadian medium businesses; and U.S. large businesses said 5 per cent compared to just 1 per cent for Canadian large businesses.

A closer look at the research reveals that it’s the business-to-consumer sector where Canadian firms are gaining the most ground. IDC is now predicting compound annual growth rate of 57 per cent in the Canadian B2C sector, compared to 42 per cent in the U.S. for the years 2000-2005.

In the business-to-business sector, Canada closed the growth gap a bit but still trails the U.S. IDC projects Canadian B2B growth through 2005 at 64.3 per cent compared to 68 per cent in the U.S.

– CIO Canada staff