Government needs to take leadership role in promoting e-economy to SMEs

The heads of some of the country’s highest profile technology companies are calling on the federal government to take a leadership role in enabling its small- and medium-sized enterprises (SMEs) to take full advantage of the Internet in changing the way they do business. They say that Internet-based applications and services have been a mainstay in companies with more than 500 employees for several years now, providing those companies with increased efficiencies, productivity, revenue and profits, but according to recent research only about half of SMEs are using the same types of services. This is both a cause for concern and rallying cry; the concern is that Canada will fall further behind other countries in terms of productivity and a rallying cry for lobbying the government to champion the advancement of these applications. Several of the leaders have gone as far to say that this should be one of the government’s top priorities going forward. In a panel session at the E-Commerce to the e-Economy conference last month in Ottawa, chaired by John Manley, former Industry Canada minister, the heads of Microsoft Canada, HP Canada, IBM Canada and Cisco Systems Canada Ltd. explained what they would do to help SMEs to take better advantage of information and communications technologies (ICTs) in improving business processes. They talked about a wide range of plans including better leadership and collaboration between the private and public sectors leadership. Frank Clegg, president of Microsoft Canada, said that despite the progress that Canadian SMEs have made more can be done. When compared to European companies, Canada is faring well, but in comparison to United States that isn’t the case. He explained that Canadian market size is often considered 10% of the United States’, but when comparing ICT and software spending it doesn’t add up. Canadian ICT spending is about 6.3% and software spending is less than 5%. Considering only the SME market, those levels are significantly lower. HP Canada’s president and CEO Paul Tsaparis didn’t express too much concern for technology challenges going forward, explaining during his presentation that technology will likely solve most of the issues. Helping SMEs get to the next level in the e-economy, however, does remain a key challenge and it could be solved by looking to how joint public/private sector HR initiatives addressed technology skills shortages of the past and there should be no reason why similar partnerships in this area can’t work, he explained. Looking to the situation in the United Kingdom, Tsaparis said one of the key inhibitors to that economy’s growth is a growing lack of skilled technical positions. While that may have been the case in Canada a number of years ago, it is to a large degree less so. Tsaparis said public/private collaboration worked in the past and there is no reason why it couldn’t work again. Ed Kilroy, president of IBM Canada, explained during the session business transformation has taken place in some sectors, but it has been done in silos such as manufacturing, distribution, supplier relationship management, and others. The challenge, he said, is to transition horizontally across all companies and for this to happen it’s going to take leadership from the public and private sectors and the academic community. "I think the key is this intersection between leadership identifying the business transformation and the technology capability. It’s the fusion of those two topics within our economy that’s going to drive productivity for all of us within Canada," Kilroy explained. "It’s no longer a model that is an internal discussion, this is a discussion that brings together public policy, brings together academia, and brings together our private sector organizations. We need even more collaboration amongst groups…I think this is up to us. This is a leadership question. Technology will solve the problems its got, this is about business transformation and I think we need to take this thing by the neck and drive out the results we think we can deliver," he said. Terry Walsh, president of Cisco Systems Canada Ltd., called on the federal government to make this a national priority (see related story in this issue). He points out that Canada has slipped from top spot on an e-readiness ranking in 2001 to eleventh this year. Other figures show that over the past three years, Canadian SME adoption of Internet business solutions isn’t showing any signs of improving. The challenge is to convince small business in Canada that spending on IT technologies and other Internet-based applications is not a cost but an investment. "Those who are not (adopting Internet technologies) – the 50% who are not participating – are in serious risk of falling behind not only their local competitors, but their global competitors," Walsh warned. "Because of the really good work that had gone on beforehand, this should actually be an area where we have a competitive advantage because the infrastructure is so good, the level of connectedness among the community and the population is the highest in the world. We’ve already built out the infrastructure we just need to capitalize on it," Walsh stated.

Government needs to take leadership role in promoting e-economy to SMEs

News | October 14, 2004

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