Ontario firms may lack global reach according to a recent report commissioned by the Ontario Network of Entrepreneurs (ONE).
The report, entitled ‘Building Global Winners’, outlines a laundry list of worrying signs which points to why Ontario’s innovation system may be stalled at a regional level and as a result, many Ontario-based SMEs are reluctant to ‘think globally’.
In one estimate, a mere 12% of Ontario startups’ customer base come from outside of North America. Meanwhile, SMEs who do engage with international markets generate revenue growth 2.1 times faster than those who do not. For SME owners and executives, there is a clear incentive to take their business global.
One challenge for the SME-support ecosystem (government, not-for-profits etc.) is to identify the firms most likely to succeed in a hyper-competitive global marketplace. However, this dilemma may not come from lack of suitable candidates, and instead may arise from having too many viable options. For instance, from 2012 to 2015 the number of startups in the GTA alone increased from 2,500 to 4,100. Similarly, the amount of venture capital funding in Ontario also increased – from $1.2 billion in 2015 to $1.8 billion in 2016.
On the other side of the equation, Ontario entrepreneurs and SME-owners are also inundated with an expansive network of accelerators and incubators – 49 in total. According to Deloitte, this figure is higher than New York City, London, Berlin or Tel Aviv.
Such a wide range of options can lead to competition rather than cooperation among the support ecosystem to service only the most promising firms. Meanwhile, the most sought-after programs and resources are also stretched thin due to high client volumes.
Overall, better alignment between both sides – business and government – is necessary to further grow Ontario’s innovation capabilities toward global competitiveness. To read the full report from ONE, visit the link below: