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E-COMMERCE REPORT FINDS CANADIAN SMALL BUSINESSES FALLING 'WELL BEHIND' U.S. COUNTERPARTS

Posted on June 28, 2001

      A report released Tuesday by the Canadian e-Business Opportunities Roundtable revealed that while Canada has closed in on the U.S. in some areas of e-business, the gap remains substantial. Research conducted by IDC Canada and its U.S.-based parent International Data Corp. (IDC) for the roundtable's acceleration sub-committee, contains both good news and bad about the state of e-business in Canada. IDC is projecting a compound annual growth rate for the Canadian e-business sector of 63.1 per cent through 2005, compared to 62.2 per cent in the U.S.

      Committee chairman John Wetmore, vice-president, ibm.com, IBM Americas, said that while he's encouraged that Canadian companies are embracing "digital tools" in an attempt to remain competitive, the rate of adoption is not "across the board.

      "Small Canadian businesses continue to fall well behind their U.S. counterparts, and Canadian businesses in general tend to be more reluctant to embrace e-business for sophisticated applications such as supply chain management or order processing and fulfillment," said Wetmore, former president of IBM Canada Ltd. "The challenge is that in the global economy, having a Web site is not enough.

      Research shows that there is a discrepancy between business-to-consumer (B2C) and business-to-business (B2B) activity. On the B2C side, IDC is predicting an annual growth rate of 57 per cent in Canada for the years 2000-2005, a full 15 points higher than the U.S. projects.

      The numbers tell a completely different story, however, in the B2B sector. IDC projects a compounded annual growth rate through 2005 at 64.3 per cent compared to 68 per cent in the U.S.

      As for as supply chain management is concerned, 15 per cent of medium-sized companies with 100-499 employees in the U.S. have it integrated into their Web site. In Canada, that figure is a paltry three per cent.

      Joe Greene, a vice-president at IDC Canada, said if Canadian firms are going to compete successfully with their "giant neighbour," there is still a great deal of work to be done.

      The roundtable is a private-sector led initiative formed in 1999 to develop a strategy for accelerating Canada's participation in the Internet economy. The mandate of the acceleration sub-committee is to create a sense of awareness and urgency for Canadian companies to adopt e-business.

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