Canadian e-business is still far behind, according to industry group

Concerns that small- and medium-sized Canadian businesses have fallen behind in adopting e-business strategies have driven a team of 21 senior-level corporate executives and trade association directors to form the e-business Acceleration Team.

“The nature of Canadian business and culture is to sit back and wait a while and see how things shape up and then move forward,” said IBM Canada’s government programs executive, Shirley-Ann George. “The challenge is that the early movers are getting a huge percentage of the market share up front, so we’re (Canada) going to be in a position, potentially, where our most profitable and best customers will be going elsewhere.”

IBM Canada is a member of the Acceleration Team.

IDC Canada’s vice-president of Telecom and Internet Research, Joe Greene, echoed George’s concerns and stressed that, “Canada tends to be quite a bit behind in small business, and in this country small business is the engine of the country.”

The panel of industry leaders’ mission is to bring awareness and a sense of urgency for Canadian companies to adopt an e-business strategy in order to compete effectively in an expanding networked world.

“The challenge is to have Canadian businesses adopt e-business models,” said George. “This is not about having e-mail and a Web site. This is about having your critical business functions and transforming them to be electronic-based.

“When you have this kind of fundamental shift, Canada, if it were very aggressive, could double or triple its market share,” said George. “But Canada by its nature is not very aggressive, so we could be reduced by the same percentage.”

Last year, Canada’s share of the global e-commerce market was approximately seven per cent and is an estimated 18 months to 24 months behind its biggest competitor — numbers that translate to between five Web years and six Web years, according to George. “It doesn’t matter if you’re a country or a company, it’s simply too far,” she said.

Greene agreed with George when describing Canada’s potential e-business and e-commerce lag time.

“It’s fairly typical in Canada that (in most areas of IT adoption) we tend to lag behind the U.S., and that has been typical for the last 15 or 20 years, however, when you’re talking about the Internet that’s where the real problem starts to arise,” said Greene. “If you’re a year behind in adopting e-business and conducting e-commerce, potentially you’re four or five years behind, because of the speed in which the Internet is moving. So any amount of time you lag behind another country with the Internet, in particular the U.S., is not good news.”

In comparison to the U.S. where e-business and dot-coms have taken on lives of their own, Canadian companies are still behind schedule, said Boston Consulting Group (BCG) manager, Sara Allan. “We want to make sure that Canadian companies don’t get left behind if things move to the point where you have to be on-line,” she said.

The e-business Acceleration Team was formed after BCG helped co-ordinate the Canadian e-business Opportunities Roundtable, which laid out a six-point strategy on how to accelerate Canada’s development of an Internet economy. According to Allan, the Team focused on building momentum across Canada, and across different sectors to make sure people “understand the impact the Internet may have on their business, and have the right tools and ideas for how they can take advantage of it,” she said.

Despite these concerns, an infrastructure that is still in its early stages, and the significant work required over the next year to close the gap between Canadian businesses and those in the U.S., Allan believes that “we (Canada) are definitely one of the world leaders. Canada has exactly the right infrastructure and environment to make it fairly easy for companies to move quickly and embrace the Internet.”

According to the January 2000 Roundtable Report, Canada’s Internet-based economy could climb to $156 billion in revenues and create an estimated 180,000 high value jobs by 2003 if Canadian companies embrace e-business, increasing national productivity and international competitiveness.

With many small- and medium-sized businesses “running ragged just trying to run their businesses,” said Greene, incentives are a key component in making the necessary migration a bit less expensive. It is too early to tell how Canadian businesses will embrace the roundtable’s findings, but the government’s role in easing the pains of this necessary migration is a key factor.

The government is “going to play a fairly large role in the dissemination of information to small business and medium-sized businesses about the benefits of doing this,” said Greene. “There are other things the government might think about doing — the one that quickly leaps to mind is some sort of tax incentive. Obviously the government can lead by example and move aggressively into the realm of e-business themselves. I know it’s in the Throne Speech, but it’s one thing to have it in the Throne Speech and it’s another to actually act upon it.”

To read more about the Roundtable’s findings, visit