Companies That Haven’t Reached ‘Digital Maturity’ Are Less Profitable
Oct 17, 2018
by Inda Intiar
Atlantic Canadian small and medium-sized businesses are lagging behind when it comes to “digital maturity,” according to a new survey by the Business Development Bank of Canada (BDC).
Only 15 percent of Atlantic Canadian small and medium-sized businesses are considered digitally mature, behind the national average of 19 percent. British Columbia and the Northwest Territories scored the same as Atlantic Canada.
BDC’s Chief Economist and VP of research, Pierre Cléroux, said it’s difficult to determine exactly why this is the case, but noted some possibilities.
“What we noticed from the report is smaller businesses have a lower rate of adoption. So it could be that in [Atlantic Canada, B.C. and Northwest Territories], businesses are a bit smaller,” he said.
Still, 60 percent of small and medium-sized companies in Canada has a conservative profile. Cléroux said it may take time before more businesses take the shift towards embracing digital technology.
“What the research is showing is people feel uncomfortable sometimes with technology, especially older entrepreneurs. Or they don’t see the benefit,” he said.
But today, businesses big or small can’t ignore digital technology anymore. BDC’s study says 25 percent of businesses that didn’t invest in technology have seen sales plummet in the last few years, and have a poor sales outlook going forward.
Meanwhile, digitally mature companies are more likely to have higher sales growth (62 percent) and profit growth (52%) in the past three years. They are also more likely to have exported (70 percent) and innovated (329 percent).
“Today actually, nobody can afford to be on the sideline. They have to really look very seriously in investing in digital technology,” Cléroux said. “Just think, today, 80 percent of Canadians, the first thing they go to when they want to buy a product they go online. So if you’re not online today, you’re almost invisible.”
Quebec leads in Canada, with 26 percent of companies being digitally advanced. This is most likely because there was a lot of awareness about the importance of using digital technology in the past few years, Cléroux said.
Cléroux encourages businesses to embrace and invest in digital technology, starting with creating a plan that fits with the company’s needs and determines what technology is needed.
The study kicked off the BDC’s Small Business Week, which aims to celebrate entrepreneurship across the country. Between October 14 and October 20, nearly 120 events will be held in Atlantic Canada alone, with the theme “Digitize now: Transform your business.”
For more information follow the link below:
https://huddle.today/companies-that-havent-reached-digital-maturity-are-less-profitable/