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Canada: too small not to compete globally

Photo by Kevin Van Paassen/The Globe and Mail

Kevin Van Paassen/The Globe and Mail

A new academic research chair at the Schulich School of Business at York University hopes to turn smaller Canadian firms into successful global companies.

"Hopefully we can create more RIMs," said Dezso J. Horvath, the long-standing dean of the business school.

The chair in "global competitiveness for small-and medium-sized enterprises" was funded by a $2-million donation from the Certified General Accountants of Ontario.

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CGA Ontario's partnership with Schulich aims to create research that will enable smaller, home-grown firms to compete in the global economy.

"This mentality that we're too small to compete globally is exactly opposite of what it should be," Mr. Horvath said.

Following are excerpts from an interview with Mr. Horvath on becoming globally oriented, training students to help smaller firms, and adopting Sweden's attitude towards business.

Why target SMEs for a program?

Increasingly, SMEs are the backbone we have to emphasize because we don't have enough large firms in Canada. This is really a sector that needs help to recognize what's going on in the world.

Our idea is to find out, through this research, and doing some competitive analysis: How are other small countries succeeding with SMEs becoming global?

There are probably around 80,000 transnational corporations in the world. Of the top 100 of those firms, the U.S. dominates with more than 20 firms. Britain, Germany, and Japan have 10 to 15 each. Then you have the Netherlands, Switzerland, and Sweden. How many are from Canada? Not one.

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It's ironic, with all these various nationalities, immigrants, and people coming into Canada, that our businesses aren't global. We should be the best in the world.

Why don't we do better? Is our government policy making it more difficult for those firms? Or are our firms more Canadian oriented because they believe they are simply too small to go to the global marketplace?

For a long time we said, 'Canada is too small to compete globally,' instead of doing what the Swedes said: 'We are too small not to compete globally.'

What are the challenges that SMEs face?

Canada is not too bad at creating new ventures, but we're not great at making them grow.

Large firms can experiment and invest, but small firms may not have the resources, or the knowledge, to know which product is growing in which area. They might not know where to go or where to find a partner.

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There is an urgency that we have to be more educated in global trends. Why aren't more of our firms in India and China? Our share is minuscule in these countries.

We may have been relying too much on our natural resources and our energy, instead of creating global firms that can compete.

How might this academic research help practically?

The chair will obviously look at benchmarking Canada against other countries. We can learn from those that have been successful, why they have succeeded, both at the government policy level and at the firm level.

We will do the research, and we will not stop there. We will work with the government about changing policies, but more importantly, we will look at the sector. It is the knowledge base that must be improved.

Will this afford research opportunities for business students?

We literally can take a firm that, say, would like to be in the European market. I can take an MBA student group, take them there, and they will find out how the firm should get into that country. We ask the questions and we make it happen.

It goes from theory and research down to pragmatic actions. There are 80 student groups who are doing strategy studies for firms, of which maybe 20 are helping corporations in the global market.

We will train students in the program. Schulich already has an international BBA program and an international MBA program. Those students work and study abroad.

We're capitalizing on all the wealth of culture and language we have in this country.

How will the program benefit the industry, specifically CGA Ontario, which donated $2-million?

For CGAs, their largest client group is small and medium enterprises. That's why they are interested. With this program, we can help these clients to become more globally oriented. By engaging in training, development, and awareness building among SMEs, they will learn what they could do to succeed better, to do better.

I think the CGAs will also benefit because those client groups are interested in becoming more knowledgeable and more aggressive in the global marketplace. If they make up a larger part of GDP, it will mean more employment and, of course, more profits.

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