CFIB says government rules critical to SMB productivity gains

The Canadian Federation of Independent Business (CFIB) released a report April 24 detailing the significance of small and mid-sized enterprises (SMEs) to improving productivity gains in Canada. And contrary to popular belief, small companies are doing their fair share to invest in information technology - believed by many to be one of the critical elements of stimulating productivity enhancements. "The majority of SMEs use technology tools," reads the study, Building Business Success: A Survey of SMEs on Productivity. "In fact, when asked to select from a list of five technology tools, only 21% answered they did not use any of the listed options. Human resources, accounting and financial applications, used by 63% of respondents, emerge as the most widespread type of technology tool. Other conventional tools are customer relations systems (26%) and automated and computerized production systems (17%)." Technology adoption in addition to investments in things such as equipment upgrades and staff additions are considered two of the more important factors in determining productivity. In its study, the CFIB points to these two measurements in addition to a number of others. Overall, a majority of companies say they are somewhat (44%) or much more (12%) efficient that they were 12 months ago. After IT adoption, investments also drive productivity growth, and according to the CFIB's survey, SMBs are investing in equipment, other types of productive assets, as well as staff. About 34% of companies plan to invest in staff and capital over the next three years, with 25% emphasizing equipment and 21% in staff. The study demonstrates that small companies are well aware of the productivity issue and have in fact invested in new equipment, training and technology. But the report also notes that productivity enhancements are built when companies make a conscious decision to invest and believe that those investments will pay off. And this only stems from the government creating the right type of environment. The CFIB makes three recommendations about the role of government in creating the right conditions for success. First, governments have to give business owners confidence in the overall economy. Secondly, governments need to eliminate barriers that hinder business expansion and that could include regulations such as the paper burden. And lastly, the CFIB states that labour shortages continue to be a major concern and as a result, the government needs to better facilitate the entry of skilled labour. Productivity has been a hot topic of discussion for the passed year as government leaders have struggled to close the gap with Canada's largest trading partner, the United States. Much debate lately has focused on providing a high-level view of the issue and what some of the potential fixes are. The Telecommunications Policy Review Panel addressed the productivity issue in its landmark report, released last March. The TPRP called for the creation of a national Information and Communications Technologies (ICT) strategy that would spur adoption of ICT by all companies of all sizes in a bid to improve the country's productivity. Despite calls from some high-profile industry leaders such as BCE Inc. chief executive Michael Sabia, the federal government has yet to make a move on this critical matter.

CFIB says government rules critical to SMB productivity gains

News | April 25, 2007

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