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Global Business 20/20 Premier Partners

Succeeding in Global MarketsCanada’s Economic Future

Global Business 20/20 ReportFall 2009

Fall 2009 Global Business 20/20 Report Page 1

© Canadian Manufacturers & Exporters

Contents

Global Business 20/20 .............................................. 2

Overview and Objectives ......................................................2

Partners ................................................................................3

Roundtable Consultations.....................................................4

Weathering the Economic Storm.....................................6

Strengthening Business Capabilities ..............................13

Raising and Leveraging Canadian Know-How ................23

Building Synergies With Industry Partners.....................28

Intensifying Global Business Development Efforts ........32Main Issues Raised - Summary .................................. 36

Acknowledgements ............................................... 39

About Canadian Manufacturers & Exporters ................. 45



Global Business 20/20Succeeding in Global Markets – Canada’s Economic Future

Overview and Objectives

What must we do to ensure the success of Canadian businesses in global markets? Finding the answer to that question is what prompted Canadian Manufacturers & Exporters (CME) to launch the Global Business 20/20 initiative.

Given that the future of Canada’s economy depends on the ability of its businesses to compete and win in the global marketplace, this question is of paramount importance for the country’s future.

As Canada’s leading trade and industry association, CME wants to mobilize partners and resources to ensure that the best efforts are being made to ensure the success of Canadian exporters on the global stage.

To achieve that goal, the association believes it is essential to build a common vision of the current and future challenges faced by Canadian businesses. It is also important to have a common understanding of the business opportunities that lie before Canadian companies and of the business strategies they need to implement to succeed internationally. Finally, improving Canadian firms’ performance in global markets would be difficult without having a better understanding of the main trends that will Canadian businesses trading globally now and in the future.

As part of CME’s Global Business 20/20 initiative, the association reached out to other national and regional organizations with a stake in Canada’s commercial success in global markets so that together, we seek new ideas to help businesses meet new challenges.

Global Business 20/20 Objectives

Developing a common understanding of the:

Challenges confronting Canadian companies doing business in global markets;

Opportunities that lie before Canadian businesses in global markets;

Main trends that affect international trade and the competitiveness of Canadian businesses on the global stage;

Winning strategies for companies and their business partners;

Identify which action items to prioritize to ensure the success of Canadian businesses in global markets; and,

Answer this fundamental question: what must we do to ensure the success of Canadian businesses in global markets?



Partners

CME wants to acknowledge its partners for their support and commitment to the success of Canadian business in global markets, and being engaged in finding common solutions to the challenges they experience.

Specifically, we want to thank our Global Business 20/20 Premier Partners for their financial contribution to this initiative as well as their ongoing commitment to the success of Canadian exporters.

We are also grateful to our regional partners for their contribution and their support in organizing sessions in their region. By helping organize meetings and invite local businesses to our local roundtable sessions taking place around the country, our local partners also played an essential role in the success of this initiative. Finally we want to thank CME members who hosted meetings for their warm welcome and generosity and to our colleagues across the country for their support and cooperation.

Global Business 20/20 Partners

Premier Partners

Canadian Commercial Corporation

Export Development Canada

Foreign Affairs and International Trade Canada

Forum for International Trade Training

Microsoft Dynamics

Regional Partners

Government of British Columbia, Ministry of Trade, Technology and Economic Development

Saskatchewan Trade & Export Partnership

Local Partners

Canada Export Centre

FedNor International Business Centre

Hamilton Economic Development

London Economic Development Corporation

Economic Development & Tourism Services, City of St. Catharines

Ottawa Manufacturers' Network

Toronto Economic Development



Local Partners (continued)

City of Kitchener

The Corporation of the City of Cambridge

WindsorEssex Development Commission

Société de développement économique de Drummondville

Deloitte & Touche LLP

Host Companies

Soprema Inc (Chilliwack, British Columbia)

Formashape (Kelowna, British Columbia)

E.H. Price (Winnipeg, Manitoba)

Superior Boiler Works & Welding (Stoney Creek, Ontario)

Groupe Canam (Boucherville, Québec)

Roundtable Consultations

To answer the strategic questions outlined above, CME organized a series of 21 meetings in a roundtable format with business executives active in global markets and some of their main business partners between May and December 2008. Over 250 executivesfrom small, mid-sized and large companies engaged in international business and representing every industry sector took part in these meetings and contributed to these in-depth discussions on the future of Canadian business in global markets. These meetings were organized with the cooperation of Global Business 20/20 premier partners and with the support of thelocal partners acknowledged above.

Since the goal of this initiative is to develop a comprehensive understanding of what must be done to ensure Canadian businesses' success on world markets, the discussions focused on four crucial issues:

1. What challenges confront Canadian businesses in global markets?

2. What are the global market opportunities before Canadian businesses?

Roundtable Sessions

List of Cities

Vancouver, BCChilliwack, BC

Kelowna, BCCalgary, AB

Edmonton, ABRegina, SK

Winnipeg, MBSault Ste. Marie, ON

Windsor, ONLondon, ON

Kitchener, ONSt. Catharines, ONStoney Creek, ON

Mississauga, ONToronto, ONOttawa, ON

Montreal, QCBoucherville, QC

Drummondville, QCHalifax, NS

St. John’s, NL



3. What changes are occurring as a result of those challenges and opportunities and what are the trends shaping how global business will be conducted in the future and affecting the competitiveness of Canadian firms in world markets?

4. What are the winning tactics and strategies for Canadian companies that want to succeed in global markets?

The sessions were facilitated by CME executives and in some cases by trade professionals acting as facilitators. CME set the stage for each one of those discussions by making an introductory presentation on the state of manufacturing and global business and outlining some of the global economic trends that are affecting Canadian businesses today. In many instances, the sessions also engaged local community leaders to discuss local initiatives that could be undertaken to better support local businesses competing in the global marketplace.

Reports from each local session are available to meeting participants and Global Business 20/20 Partners upon request. These meeting summaries contain a list of participants for each session along with a summary of comments made.

Canada’s ability to succeed in global markets will depend on the capacity of industry to adapt to a rapidly changing business environment. The roundtable sessions made it clear that give key issues will have to be addressed to sustain the competitive success of Canadian businesses in global markets and achieving the goal of enhanced prosperity for all Canadians:

1. Weathering the economic storm2. Strengthening business capabilities3. Raising and leveraging Canadian Know-How4. Building synergies with industry partners5. Intensifying global business development efforts

The next section of this report examines each of these success factors by abridgingthe input we have received from participating companies. For each success factor, we summarized the trends affecting how business will be conducted, the current challenges as they are affecting businesses, the opportunities envisioned by Canadian companies and finally, the perspectives and recommendations we heard from participants.



Weathering the Economic Storm

Trends

The Changing Nature of the World Economy

The rapid emergence of developing economies and their growing importance in global markets has been one of the most significant economic trends of the past decade. The recession and the looming recovery will accentuate this trend, with developing economies either being spared of a recession or rebounding from it faster than western economies. For Canadian businesses, this means that sources of growth will continue to diversify.

The emergence of new industrial powerhouses also means that sources of competition will also continue to multiply. Developing economies will accentuate their shift towards higher value-added manufacturing as they try to move up the value chain, which should translate into increased foreign competition for a greater number of industry sectors and a heightened need for Canadian companies to focus on innovation.

Not only should there be more competition for market share, but there is also more competition for investment as global value chains continue to emerge and as the process of producing goods becomes increasingly fragmented with each process taking place wherever the right mix of raw materials, skills and know-how is present.

Massive infrastructure spending is also taking place throughout the world, both as a result of the growth of developing economies, particularly India and China, and stimulus spending by governments trying to steer their economies out of recession. While some of these investments are targeted at upgrading existing infrastructure, governments are investing in sectors and programs that address energy and climate change challenges, two areas where Canadian know-how will be in demand.

As economic growth resumes, Canadian businesses also expect energy, raw material and transportation costs to continue to increase, as was the case prior to the recession, due to growing demand.

Canadian businesses also expect greater constraints on carbon emissions andmust assess how this will affect their business and develop a strategy to address it.



Globally active Canadian companies also expect substantial risks to continue to be present in financial and currency markets. For example, in the United States, there is a risk that Canadian businesses will lose customers due to bankruptcies, consolidation and more restrained consumer spending behavior than in the past. The volatility of the Canadian dollar and its strength relative to the US dollar are two other risk factors affecting the ability of Canadian businesses to compete in the global marketplace.Managing that risk and adopting a business strategy that takes these factors into account will be essential to the success of Canadian businesses in the global marketplace.

The emergence of global supply chains and the fragmentation of production activities it brings as a result will also reshape how business is conducted. This trend forces firms to focus their activities on those elements in the supply chain where they add the most value, and must learn to effectively partner with other businesses up and down the supply chain.

For Canadian manufacturers more specifically, there is a strong sense of urgency in escaping the commoditization trap through innovation, investments in technology, improving workplace skills and leveraging the know-how of employees. Greater foreign competition has forced companies whose products face competition from lower cost jurisdictions to reduce costs and improve operational efficiency. However, in the long runbusinesses whose products are commodities or at risk of becoming commodities need to escape that commoditization trap by better differentiating their products through innovation.

Finally, another key trend affecting the economic environment in which Canadian businesses operate relates to Canada’s ageing population. Businesses expect this trend will impact them in three ways. First of all,demographic trends mean the population growth will slow down, and that the active labour force might shrink. This will dampen economic growth rates in Canada, but also translate into business opportunities in areas such as health care and automation, to give two examples. Secondly, an ageing population means that businesses will face more competition in attracting and retaining skilled personnel. Finally, in response to skills shortages, businesses will seek to attract and integrate more immigrants into the Canadian labour force, and seek to invest where skilled labour is available.



Current Challenges

Economic Uncertainty

CME’s Global Business 20/20 consultations took place as the recession took shape and hit companies. That recession has been severely impacting Canadian exporters, particularly those selling in the United States. Overall Canadian manufacturers sell more than half of their production in the United States, where exports declined by more than a third in less than a year as a result of the recession. Businesses participating in the roundtables recognized that the short term economic landscape is fraught with risks and uncertainty. Consumer and business confidence is severely affected and unlikely to return to its pre-recession levels, partly because businesses expect financing constraints to remain after the recession.

The recession has led to overcapacity in industrial markets and increased competition in our domestic and main export markets. As a result, manufacturers expect to see additional consolidation, plant closures and job losses as inventory levels and the risk of seeing more orders cancelled and receivables unpaid remain high. That trend which has led to the loss of over 500,000 job losses in Canada’s manufacturing sector since 2004 is only likely to accentuate in the near future.

The key question that businesses now ask themselves is what will be the “new normal”, in other words, what fundamental changes will characterize the post-recession economy. We are already starting to see signs of a recovery taking shape. For example, there is a rebound in demand driven by fiscal and monetary stimulus in Canada and the United States. The housing market is slowly recovering with homeowners investing in renovating their property, and the automotive market is also recovering slowly. However there is yet no indication of a sustained recovery in consumer spending or business investment.

Volatility and High Costs

The recent economic context for Canadian businesses active in global markets has also been characterized by higher costs and greater volatility in raw materials prices, energy and transportation costs and in currency markets. Businesses are having a reprieve from increases energy prices and in the prices of some raw materials because of the recession, but as businesses try to plan their activities for the future, that volatility makes it hard for manufacturers to do effective long term planning.



Businesses also reported a lack of understanding of the fundamental causes that affect and explain raw material prices and their fluctuation. For example, some businesses wonder how Chinese competitors can sell finished goods at a price below what it costs for a Canadian company to source raw materials. Many questions were raised as well concerning transportation costs not necessarily being linked to the distance being covered – some manufacturers on the west coast for example, mentioned that shipping to Mexico or parts of the United States can be more expensive than to ship to China. Manufacturers on the east coast also mentioned that it can be cheaper to ship to Asia than across the Atlantic to some European destinations. High shipping costs within Canada were also mentioned as a challenge by companies in various parts of the country.

Tightening of Credit Conditions

Credit conditions have tightened considerably since the beginning of the global financial crisis. While businesses expected a recession that would manifest itself simply as a general slowdown in economic activity, this recession was different than expected as it was rooted in clients’ inability to obtain financing. Financing constraints and higher financing costs have resulted in weaker customer demand, delayed or cancelled investment projects and difficulties obtaining short term financing such as operating lines of credit to finance operations during the downturn. Some of these challenges are likely to persist post-recession and this explains why businesses expect a slow recovery in Canada and the United States.

High Risks for Some Businesses

The current economic landscape is also characterized by high risks in key markets. One key risk of concern is that of prolonged weakness in customer demand in the United States and Canada. Currency risk is also affecting all Canadian companies doing business in global markets, especially the risk of a US dollar that weakens as a result of the US economy being mired in recession. Economic uncertainty also heightens the risk that businesses will see their customers default on payments and that investment projects will be permanently cancelled.

In this context, many Canadian businesses are struggling to stay afloat and reporting that survival is a good growth strategy. In other words, if businesses can survive the recession while some of their competitors disappear or exit certain markets, they will be in a better position to take advantage of post-recession opportunities.



Opportunities

Growth of Emerging Economies

The financial crisis and the recession that followed mean that business as usual is no longer an option for Canadian companies. We are already starting to see that post-recession business conditions will be significantly different than they were prior to the recession. Businesses active in global markets that were consulted during our roundtable meetings stressed that it is those businesses that will best adapt to the new economic reality that will be in the best position to take advantage of new business opportunities.

Canadian manufacturers and exporters increasingly see their future success depending on their ability to grow their business beyond North America.

From 1988 up to 2003, it could be argued that Canadian manufacturers took advantage of the weak Canadian dollar and the signing of the Canada-US Free Trade Agreement and then NAFTA to grow their business in North American markets. From 2003 up to the beginning of the recession, Canadian manufacturers shifted their focus to responding to the appreciation of the Canadian dollar by more than 60% within four years by improving operational efficiency through investments in skills, new technology and innovation. Our business consultations lead us to believe the period following the recession will be characterized by a stronger emphasis on growing business in new markets.

The emergence of significant consumer and industrial markets in developing economies is probably the most significant opportunity that results from the changing economic context. As these markets grow in importance, they become a source of future growth. Businesses also perceive opportunities to grow their sales within North America, most notably in the Southwestern United States. Canadian businesses are relatively less present in that part of the United States than they are in regions closer to the Canada-US border. With that region experiencing strong demographic growth and with states such as Texas and California having economies comparable in size to that of the UK and Canada respectively, some companies perceive those markets as attractive.

New and Emerging Customer Demand

Canadian businesses also have an opportunity to provide solutions to some of the world’s leading problems, particularly solutions that help address environmental, energy and cost challenges. For Canadian businesses to succeed in the future, they need to be developing solutions to these challenges that can be applied on a global scale. Many of the businesses



consulted understand that these trends will affect demand in consumer and industrial markets and are trying to ensure they are investing in developing solutions that address these challenges.

Moreover, with massive infrastructure spending taking place throughout the world as a result of the emergence of developing economies and stimulus spending by governments throughout the world, Canadian know-how in that sector is in demand and should continue to be in the foreseeable future.

Business Investment

As businesses are weathering the economic storm and to position themselves for the recovery, manufacturers and exporters mentioned there are significant opportunities for those that can access financing to acquire competitors or businesses in new market segments or new geographic markets. Moreover, it was mentioned that regardless of industry, it is those companies with the strongest balance sheets and best value propositions that will emerge from the crisis in the strongest competitive position.

Perspectives and Recommendations

Going forward, businesses shared their perspectives and expressed a number of recommendations on what could be done to better help them go through turbulent economic times, answer the challenges brought about by changing economic conditions and take advantage of opportunities.

In the following sections of this document, we will see their recommendations on how to improve business capabilities, leverage Canadian know-how, build synergies with public and private business partners and grow international sales.

In terms of adapting to a changing economic environment, the recommendations expressed can be summarized as follows:

Sharing best practices: Canadian businesses active in global markets are facing similar challenges as a result of the recession and have to respond to similar trends as well. They should therefore better share best practices so that they can each learn from one another’s experience.

Governments must make manufacturing a priority: Manufacturing currently accounts for more than two-thirds of Canada’s exports. Ensuring Canada’s success in global markets depends on Canadian manufacturers’ ability to face growing competition and meet the innovation challenge.



Improving our competitiveness through infrastructure investments: Governments should ensure that Canada’s infrastructure spendingfocuses on those investments that will enhance the competitiveness of the Canadian economy. For example, investments should target our logistics, border, transportation, energy, research and education infrastructure.

Helping businesses meet the green challenge: Businesses must understand how the greening of the economy will impact their business, and develop plans to meet that challenge. Governments within Canada and around the world must better work together to give more certainty to businesses on how they plan to green the economy. Rather thansimply constraining businesses to reduce their footprint, governments should further help businesses develop solutions to global environmental problems.

Leveraging our logistics infrastructure: Canada’s trade gateways should be aligned with a manufacturing and trade strategy so that they can lead to greater exports of value-added merchandise.

Better connecting Canadian companies with business opportunities: businesses know that opportunities abound in emerging markets, yet are struggling to identify which markets to target first.



Strengthening Business Capabilities

Trends

For Canada to expand its presence in global markets, Canadian businesses must be able to meet the test of global competition. Succeeding in global markets requires that Canadian businesses run world class operations at every stage of their supply chain.

In each of CME’s Global Business 20/20 meetings, a substantial part of the discussions concerned how to strengthen business capabilities and better support businesses who strive to run world class operations.

Greater Focus on Providing Solutions

Part of our discussions focused on the trends that are affecting Canadian businesses’ ability to attain new levels of excellence. One element that emerged is that more successful businesses have been shifting their focus from their products to their clients’ success. In the case of manufacturers,their business is no longer simply about getting a product out the door, but rather about providing solutions to customers that are delivered throughtangible goods but that also provide value through the engineering, innovation, financing terms, service, distribution and logistics that are embedded in products.

Greater Focus on Core Competencies and the Ability to Build Partnerships

The emergence of global supply chains and the fragmentation of activities throughout supply chains lead businesses to focus on those activities where they bring the most value added. Business success is tied to the ability to focus on core competencies and have a distinct comparative advantage that can sustain the test of global competition. This explains why many businesses are deciding to adopt niche market strategies by focusing on delivering solutions to specific market segments.

Simultaneously, businesses understand that to succeed they must also derive a greater share of their sales revenue from the introduction of new products and the development of new markets. They also need to need to deliver more customer value through design, engineering, service and financing activities.

These two trends – concentrating on what the firm does best while developing new products and markets - may appear difficult to reconcile



with budgets and resources being constrained. Some perceive that it is difficult to pursue both strategies – focusing on what the company does best and growing sales in new markets – at the same time.

A solution to this conundrum is to build effective partnerships. For example, businesses can build partnerships with financial services providers to provide financing terms more attractive to clients; they can partner with design and engineering professionals to help develop new products and markets; they can partner with lean professionals to improve operational efficiency; and they can partner with trading houses and business development experts to grow their business in new markets. Partnering with external companies to deliver these activities allows firms to focus on what they do best, and redeploy resources towards product and market development, among other things. As a result, rather than trying to build new products or develop new markets using only internal resources, firms will increasingly have to find the right partners and set up mutually beneficial partnerships. Many companies consulted, especially small and medium sized businesses, mentioned that their future success depends on the ability of their organization to build successful partnerships.

Greater Focus on Innovation

To succeed in global markets, Canadian businesses and Canadian manufacturers of all sizes and sectors must grow a culture of innovation, just as they recently succeeded in building a culture of continuous improvement.

The appreciation of the Canadian dollar over the last six years has pushed Canadian manufacturers away from making high volumes of undifferentiated products and has led to a move towards more differentiated and specialized products that take advantage of manufacturers’ agility, know-how andability to produce customized goods.

Innovation does not only consist in the ability to continuously commercialize new and improved products; it also encompasses the ability to implement new and improved business processes, introduce new technologies and automation models, adopt new business models and value networks, and take advantage of new business opportunities.

Increased competition from emerging economies and higher costs of doing business at home are accentuating the trend towards placing greater emphasis on innovation as a business strategy. In fact, the ability to innovate is considered by many to be Canadian manufacturers’ main competitive advantage. The Canadian manufacturing sector is already intensive in research and development, accounting for approximately three quarters of private sector research and development investments and 85%



of new products commercialized. Manufacturers and other businesses active in global markets will need to accentuate that trend and focus on improvingtheir ability to innovate.

Need to Better Manage Change

Another capability that businesses must strengthen to succeed in global markets is their ability to manage change and successfully adapt to changing business conditions. External business conditions evolve rapidly, and businesses that have the agility to adapt more rapidly to changing conditions are in better position to take advantage of opportunities stemming from a changing environment.

Not only are external conditions changing, but the pace of technological change is also accelerating. Moreover, the more businesses source, produce or sell in foreign markets, the more risks they are exposed to and the more likely they are to be affected by changes in the environment.

In response, business executives need to improve their organization’s ability to foresee changes, analyze their impact, review their business strategy and mobilize employees accordingly.

Current Challenges

Lack of Control Over Business Conditions

A key challenge that businesses face as they try to strengthen their competitiveness and their ability to meet global competition is a perceived lack of control over their environment. In the recent past, businesses have been impacted by a number of shocks such as the appreciation of the Canadian dollar, the sudden market downturn, difficulties in accessing credit, higher financing and raw materials costs and increased volatility in input prices and sales revenue. These short term shocks forced them to focus on short term tactics at the detriment of longer term strategies and objectives. For example, a majority of small and medium sized businesses consulted mentioned that they do not have formal marketing or business development plans. In cases where businesses do have plans, they feel that they turn out to be difficult to implement due to always-changing business conditions, or that they need to be constantly revised.

Current economic conditions therefore hold sway over long-term planning. Consequently, many manufacturers have difficulties in choosing between competing priorities; for example, between investing in continuous



improvement, training or new market development. Moreover, financing and cash flow constraints mean that investment dollars will be hard to come by, making these choices all the more difficult.

Canada’s Economic Competitiveness

A substantial proportion of Canada’s exports originate from Canadian subsidiaries or affiliates of foreign-based corporations. In these cases, Canadian plants typically receive a mandate to supply a geographic region or industry sector with specific products or services. These Canadian companies normally control one stage of the supply chain – for example product development or production – and may not be responsible for marketing or business development.

If we are to ask these companies how can they grow their sales in global markets, because they do not control their sales activities the only solution for them is to obtain global production or global research mandates. These companies need to fight internally for investment dollars. They can attract mandates by convincing their parent company that investing in their Canadian operations will yield the best return on investment. As a result, for these businesses, being able to grow their international sales – in other words, obtaining a global production, distribution or research mandate –depends on being able to beat internal competition for investment dollars.

For these companies, the main factor that affects their ability to obtain global mandates is the competitiveness of their Canadian operations on a global basis. As a result, these companies reported that the best way for Canada to help them succeed in global markets is to improve the competitiveness of the Canadian economy as it relates to their industry sector and their company. Governments, business partners and industry therefore need to better work together to meet that challenge to make Canada the preferred location for businesses to locate, manufacture, export from, employ and grow. This issue is very relevant because a substantial proportion of Canada’s trade with the rest of the world takes places between related parties (e.g. within the same company).

Surmounting Internal Business Development Constraints

As we have seen before, interest in growing sales beyond North American markets in higher than in the recent past. Increased competition and weaker demand in Canada and the United States is forcing businesses to seek new markets.

While executives understand that their future depends on their ability to grow their business in global markets and to market new products and services, they report a number of constraints that hinder their ability to do



so. Executives themselves mention lack of time and in some cases lack of expertise as two major constraints they face as they want to grow their business. At the organizational level, lack of qualified personnel, lack of organizational expertise in business development, lack of capital available for business development and difficulties finding the right business partners in foreign countries are among the constraints that have been frequently reported.

In some of the roundtable sessions, executives from smaller sized businesses candidly mentioned that for them to grow their business beyond traditional markets required them to acquire new competencies. For example, a company expressed its interest in starting to sell outside of the North American market, but also mentioned it did not know where to start and where to look for support. Some might perceive this as a fear of the unknown, complacency or a lack of aggressiveness, but as we will see in the next section, for many businesses, growing their business in global markets depends on their ability to develop that organizational skill and capability.

Making Innovation a Key Part of the Business Strategy

Despite the recognized importance of innovation as a business strategy, many small and medium sized manufacturers reported that innovation is slow to take root in their corporate culture and did not know where to begin implementing this in their operations. There was also lack of knowledge about resources available to companies seeking to improve their ability to innovate.

Access to Financing

In other to strengthen their capabilities and surmount internal constraints, businesses need financing. Business development plans need to be supported by appropriate financing, whether the firm is pursuing a traditional business development strategy, is seeking to invest abroad to source materials or components, or wants to make acquisitions to grow their market presence. Investing in innovation, new technologies, skills development or other areas that lead to business growth also requires access to capital.

Businesses, especially small and medium-sized manufacturers and exporters, expect financing challenges to persist. While more difficult and more expensive to obtain, most companies have secured sufficient working capital to survive the recession. However, it can be expected that new financing lines will be required quickly to allow companies to respond rapidly to newly emerging business opportunities.



Opportunities

Sharing Best Practices

The main opportunity for businesses to improve their internal capabilities is by helping them learn from each other’s experience. Executives seek to learn from other businesses’ successes, exchange views to evaluate various strategies and tactics, and highly value the feedback they can obtain from their peers.

In the recent past, manufacturers have been more actively seeking to access best practices as part of their efforts to improve operational efficiency. They now seek to expand those efforts to include other business functions, especially business development and marketing. For example, businesses that have successfully invested in operations abroad, or those that have successfully expanded into a new market should be encouraged to share their experience with others. Some mentioned the idea of creating consortia of companies trying to penetrate new markets so they can access resources such as consultants and experts, and better learn from each other’s experience.

There are numerous cases of Canadian companies of all sizes and all sectors that have succeeded in growing beyond the Canadian and North American markets and which constitute a source of information and inspiration. Businesses should explore that opportunity before trying to grow their business in new markets in order to better manage risks and save time and money.

Moreover, from a policy standpoint service organizations supporting Canadian businesses in international markets can better learn from the experience of other countries whose firms are known to succeed in international markets.

Focus on Implementing Winning Strategies

To strengthen their business capabilities and address the challenges mentioned previously, businesses have to focus their efforts on implementing strategies that give them a sustainable competitive advantage.

Among the strategies mentioned were:



Lean: to succeed businesses need to implement lean practices and eliminate waste in every aspect of their operations.

Agility and customization: businesses need to adapt more rapidly and effectively to changes in their business environment such as new customer demands, for example by reducing the amount of time it takes between the identification of an opportunity, the development of a product or a service and the delivery of that new good or service to customers.

Innovation: businesses need to continuously commercialize new and improved products and processes that generate more value for the customer.

Differentiation: businesses need to specialize their product and service offerings and focus on delivering customer value through design, engineering, service, financing and logistics.

As mentioned before, businesses also expect governments and service providers to improve the business environment by addressing the policy challenges they have expressed and which are summarized in the previous section.

In turn, businesses mentioned that they must strengthen their capabilities to improve their performance in the following areas:

Cash flow and financial management; Internal business and production processes; Adoption of new technologies; Development and commercialization of more specialized and more

customized products and services; Developing new markets and connecting to new customers and supply

chains; Responding more rapidly to changing customer requirements; Mobilizing their workforce and continuously upgrading their skills.

Facilitating Access to Business Services

CME’s series of business roundtables made it evident that public and private-sector service providers both are keen to assist Canadian companies in their efforts to grow their sales in international markets.

In fact, there are an impressive number of organizations and individuals available to help businesses regardless of their region, sector or size.

However, as we will see in the section entitled Building Synergies with Industry Partners, companies find it difficult to access these services in part



because there is a lack of coordination between service providers and because they find it time consuming to access the right information.


As we have just seen, to better succeed in global markets, businesses need to strengthen their capabilities. Taking into account the trends that are affecting them, the challenges they are facing and the opportunities that can help improve their performance, businesses have expressed a number of ideas on what could be done to improve their capabilities. One set of recommendations addresses internal constraints on performance improvement while another concerns the business environment in which they operate.

Addressing International Constraints on Performance Improvement

The businesses that were consulted recognize that first and foremost, the onus is on each and every one of them to compete and win.

As we have seen in previous pages, they have identified a number of areas where they need to improve their performance:

Focusing their business strategy on what they do best and where they bring the most value in the value chain to further differentiate themselves;

Partnering with firms that can them focus their activities on what they do best in order to deliver more value to customers and better develop new products and markets;

Intensifying efforts to implement lean practices that eliminate waste and increase customer value;

Adapting their business model and their operations to respond more rapidly and effectively to changes in their business environment such as new customer demands;

Improving their innovation performance;

As an industry, businesses active in international markets should also look to be more engaged in sharing best practices and winning strategies. Executives more particularly need better support to strengthen their abilities and so that they can dedicate a greater share of their time defining long term objectives and growing their business. Associations and business networks should intensify their efforts at sharing best practices and highlighting the cases of Canadian companies that are succeeding in international markets.



Addressing External Constraints on Performance Improvement

Governments and service providers also have a critical role to play in ensuring a business environment that enables Canadian industry to retain and attract investment, and make the crucial improvements they need to make to remain competitive and grow in global markets.

Businesses did acknowledge the initiatives that governments have already taken at the federal, provincial and local levels to reduce business taxes, streamline regulations, eliminate barriers to trade, and support investments in infrastructure, innovation, skills development, and new technologies.

They say however that more concerted action is now required in order to meet the unprecedented challenges they are facing and help them grow their business in an environment where competition is fierce.

More specifically they look for governments to take a coherent and coordinated approach involving all levels of government to improve the business environment for businesses who must meet the challenge of global competition. Among the specific policy initiatives mentioned during the sessions were:

Improving the tax environment for business investment in innovation, skills development and the adoption of new technology – the tax system should be better aligned with successful business strategies;

Ensuring that competitive businesses have access to credit and financing, and at competitive rates;

Encouraging sustainable environmental goals and priorities and ensure that environmental obligations do not put Canadian companies at a competitive disadvantage;

Improving the competitiveness of Canada’s regulatory environment by streamlining approvals, reducing compliance costs, ensuring that target are economically and technically feasible, and by eliminating inter-provincial trade barriers and ensuring greater regulatory consistency with our major trading partners;

Strengthening support for industrial innovation by improving access to tax credits and fostering better collaboration between research centres, universities, colleges and industry;

Ensuring access to a reliable and cost-competitive supply of energy; Improving Canada’s transportation and logistics infrastructure so that

exporters can ship goods and source inputs more competitively; Negotiating trade agreements that open markets to Canadian exporters

and investors while ensuring that trade rules are effectively enforced;



Better coordinating and aligning public policies and assistance programs with business strategies to improve the performance of Canadian businesses;

Facilitating the movement of goods and people across the Canada-US border; and,

Strengthening workplace training and ensuring that Canadian businesses can access skilled labour.



Raising and Leveraging Canadian Know-How

The skills, experience and diversity of Canada’s workforce is increasingly perceived as one of Canada’s distinct comparative advantages in the world economy. Businesses realize that their ability to operate in a high-cost jurisdiction such as Canada depends on their ability to improve that talent base and leverage it in a way that improves their results and performance. Moreover, businesses seeking to retain and attract investment to Canada often mentioned Canada’s skills advantage as a key factor in investment decisions.

For Canadian businesses to succeed in global markets, businesses see that it’s important to improve that skills advantage and that businesses need to do more to leverage the know-how of their workforce.

Trends

Countries Are Actively Growing Their Talent Base

Improving and leveraging the skills and know-how of workers is now playing a central role in economic development strategies around the world. This is understandable because long term improvements in standards of living are a direct function of improvements in productivity. Given that productivity consists of the quantity of goods and services that workers produce per unit of time with the skills and tools available to them, it is understandable that economic policy focuses on improving the skills of the workforce, increasing capital investment and improving the economy’s capacity of innovate.

Economic policies not only focus on improving the skills of current and future workers - countries are increasingly competing in a war for talent to attract the most mobile and talented workers.

In fact, business executives consulted during CME’s Global Business 20/20 initiative realize that for higher cost jurisdictions such as Canada to succeed in maintaining or improving their standard of living, they will need to continuously improve the skills of their workforce and translate that into better business performance.

More specifically, businesses, governments, workers and educational institutions will need to mobilize themselves towards achieving this common objective. This means that countries will be actively looking for solutions toincrease graduation rates, ensure that educational institutions provide the



required skills and knowledge, continuously improve workplace skills and put in place the conditions required to attract and retain skilled and mobile workers in Canada.

Talent Will Be in Higher Demand in Canada

Canadian businesses expect the war for talent to intensify in the future and believe they will face greater competition to attract and retain the most talented workers.

For a number of years, skilled labour shortages have been intensifying in Canada. A significant number of companies are reporting that this has or will contrain their ability to grow their activities in Canada. In manufacturing, the situation is particularly affecting businesses’ ability to fill skilled trades positions. This situation is likely to be exacerbated given that the country’s population is ageing.

Moreover businesses active in global markets are saying that as growing human capital becomes more central to their success, human resourcesmanagement becomes a more strategic business function at which they must excel.

Canada Succeeds at Attracting Skilled Immigrants

Comparatively speaking, Canada continues to be an attractive place for skilled immigrants to settle, live and work. Businesses believe this is an asset on which to build.

Canada is also successful at attracting foreign students, and many of them are willing to stay in the country following their graduation if offered the opportunity to work in their field of study.

Current Challenges

Skilled Labour Shortages

For years Canadian businesses, particularly manufacturing companies, have been reporting that some skilled positions are extremely difficult to fill. Despite recent reductions in the size of the workforce, businesses continue to expect that access to skilled labour will constrain their ability to growtheir Canadian operations in the future. Moreover businesses expect skilled labour shortages to be aggravated by Canada’s aging population and



immigration’s inability to compensate for those exiting the active labour force.

Manufacturers are also reporting that a reason why they have experiencing difficulties filling skilled positions is that training programs that lead to careers in manufacturing are undervalued despite the fact that employmentand earnings prospects remain excellent and that manufacturing offers some of the most interesting career opportunities. Moreover, the restructuring that has taken place in Canada’s manufacturing sector which has led to plant closures and workforce reductions sent a negative signal to students and professionals potentially interested in manufacturing careers.

Moreover, as businesses seek to grow their sales in new markets, they are looking to hire more professionals with business development expertise. Many companies reported having difficulties finding workers with industry experience and international exposure that could join their company’s marketing or business development team. This need seemed particularly acute for businesses located outside of major metropolitan areas.

Integrating Immigrants into the Workforce

Year after year, Canada’s universities and colleges succeed in attracting foreign students to Canada. Many of them want to stay after their graduation, however, many return to their native country or becomeunderemployed following their graduation.

Many other skilled and experienced workers choose to immigrate to Canada and experience significant difficulties getting their skills and credentials recognized once they arrive in the country. These workers have difficulties integrating the workforce, and often find themselves underemployed. This is explained in part because for many getting their skills and credentials recognized requires them to go through, at best, a slow and arduous process.

Businesses located outside main metropolitan areas also mention that immigration remains concentrated in the country’s main urban areas. In those areas, immigration has not yet proven to be a solution to skilled labour shortages.

Mobilizing Workers Towards Common Objectives

To compete in world markets, businesses need to focus on achieving operational excellence through the introduction of lean concepts and methods. A key aspect of manufacturers’ efforts to implement lean and improve productivity centers on improving workforce mobilization – ensuring that every employee is engaged and committed to continuous improvement



by contributing ideas and having the means to implement them, and ensuring that workers understand that their role and contribution is important in achieving the company’s strategic objectives.

Doing so requires overcoming some challenges, of one them being that employees and labour unions better understand the context faced by businesses competing in world markets. Overcoming that challenge requires building a greater level of trust and cooperation between the company’s management and workers.

Opportunities

Using Immigration to Address Skills Shortages and Support Business Development Activities

Businesses’ challenges in finding skilled labour could be addressed by attracting more immigrants and working with provincial governments to ensure that their skills are recognized. If immigrants’ diplomas andcredentials are not up to the same level as Canada’s, businesses believe they should be provided the opportunity to receive special training to bridge the gap between their current competencies and those needed to obtain their diploma or certification.

Some businesses who succeeded in either growing their sales in overseas markets, in developing relationships with foreign suppliers, or in building partnerships with foreign companies, for example through joint-ventures, mentioned that they started doing international business accidentally afterhiring a graduate from a foreign country. That graduate identified business opportunities between the company and his native country, and was allowed to pursue that opportunity.

Improving the Image of Manufacturing

Manufacturers believe that efforts should be made to modernize the image of manufacturing in order to more encourage students to make choices that lead to careers in manufacturing as this would help alleviate skilled labour shortages in their industry. The image of manufacturing should reflect the fact that manufacturing is at the forefront of global competition as it accounts for two-thirds of Canada exports. It should also take into account that it is the leading innovative sector of the Canadian economy, accounting for three fourths of private sector research and development and the great majority of new products commercialized. Positioning manufacturing as the innovative, globally-oriented sector of the Canadian economy as part of a campaign to improve its image would help address these concerns.




A number of recommendations were made for Canadian business to address challenges and take advantage of opportunities identified with regards with strengthening and leveraging Canadian know-how.

Among those recommendations were:

Making the development and growth of a skilled workforce a central part of economic development strategies across Canada;

Working to improve students’ graduation rates across the country; Attracting more skilled immigrants to Canada and facilitating the

recognition of their skills and credentials so they can be more easily integrated into the workforce and gain meaningful employment;

Improving access to the temporary foreign workers program for small and medium sized businesses as it is currently costly and complicated for smaller businesses to access it;

Explore ways to encourage skilled immigrants to settle outside of major metropolitan areas;

Businesses should specifically seek to recruit more foreign students upon graduation as well as other students with international training and experience;

Businesses should continuously improve workplace skills and need to ensure that training is aligned with their overall corporate objectives, and with business development objectives more specifically;

Businesses and their associations should forge more partnerships with educational institutions to ensure that educational institutions provide students with the skills and knowledge that employers require;

Businesses and governments need to work together to ensure that Canadian businesses are able to attract and retain skilled and mobile workers;

Governments should seek to attract more skilled immigrants in response to labour shortages and focus on immigrants with skills in high demand by businesses;

Better support business leaders in developing the expertise they need to grow their business and cultivate a global mindset;

Management and workers and need to be mobilized around common strategic objectives;

Businesses, governments and stakeholders need to work together to position manufacturing towards students making career choices as the innovative, globally-oriented sector of the Canadian economy.



Building Synergies with Industry Partners

Global Business 20/20 partners played an integral role in the success of this initiative. Moreover, private sector firms providing services to businesses active in international markets participated in every roundtable session and provided their input – this includes service providers in areas such as financing, customs, logistics, shipping, trade facilitation, engineering, research assistance, consulting and telecommunications services.

Their active involvement and the comments they have expressed attests of their willingness to help Canadian businesses succeed in global markets.

Moreover, the discussions also made it clear that businesses that want to succeed in global markets seek to work more closely with industry partners but also want to see public policies and assistance programs better coordinated and aligned with their business strategies.

Trends

Changing Business Needs and Requirements

Businesses are increasingly looking to source the best services from around the world. In response to this, service providers need to ensure they can provide services, knowledge and expertise that are specialized, customized and competitively priced. In other words, they must provide the specialized expertise and customized applications needed by manufacturers and exporters that are themselves focusing on more specialized products and knowledge-intensive activities to grow their business. There is also an increasing need for service providers to be fast, flexible, quality-oriented, customized, and competitively priced.

Increased Private Sector Support for Trade-Related Functions

Businesses are witnessing a growing supply of specialized services in trade-related areas such as logistics management, currency management or business development services. The growth of these services allows manufacturing companies, for example, to outsource some these trade-related activities, focus on their core activities, and perform better than they would otherwise. For example, the third-party logistics industry has been growing in Canada, allowing a greater number of companies to use a one stop shop service for their supply chain management function.



As a result of the emergence of specialized trade services, businesses seeking to engage in international trade are now better able to access that expertise and do not have to develop that capability internally. For small and medium sized companies more specifically, these services can allow them to scale up their international activities more rapidly.

Current Challenges

Lack of Awareness of Existing Services

Roundtable meetings typically gathered a combination of companies active in international markets with public and private sector service providers. In too many cases, participants were not aware of each other’s existence or services prior to the meeting. Overall business executives tented to beunaware of the range of services available to them.

High Information Costs

Some business participants also stated that accessing services often required too much time or too many resources. They advised industry partners to improve access to their services by better coordinating with other service providers and making it easier for businesses to find the relevant information concerning their services. In some cases, one negative experience has discouraged companies from seeking to access other services altogether.

In fact, it could be said that businesses are first and foremost looking for business partners rather than for service providers. They seek to build relationships based on trust with individuals that are fundamentally interested in understanding their business needs and able to guide them through the process of accessing the services that may be of assistance to them.

Coordination Between Service Providers

Businesses perceive some overlap between the various services available to them and encourage greater coordination between associations, governments, government agencies and other service providers. For example, some mentioned having difficulty knowing how to identify the key person to resolve an issue within an organization. It was also mentioned that service quality varies greatly from one person to another and from one organization to another.



Opportunities

Growing Business Interest in Developing New Markets

Exporters and manufacturers are more than ever interested in developing foreign markets as we have seen in previous sections. This is an opportunity that service providers should be looking to capitalize on. Those able to assist Canadian companies in their efforts to expand in foreign markets should see an increased interest in their services as evidenced during some of the roundtable sessions.

While businesses are increasingly looking to grow their business in global markets, there is an increased willingness on the part of government agencies and other service providers to help manufacturers, exporters and other companies engaging in international trade succeed. The issue is therefore one of connecting businesses with the right services. This is a role that associations could play more effectively.

Building Successful Partnerships

Industry partners that can use the right approach to deliver their services have an opportunity to build successful partnerships. As resources become more constrained within companies, we can expect businesses to seek greater support from industry partners.

Service providers able to build a partnership based on trust and an understanding of their client’s competitive reality should be able to capitalize on that opportunity.


A number of recommendations were made to help build synergies between businesses active in global markets and their private and public sector industry partners. These recommendations can be summarized as follows:

Better coordinating services and initiatives: governments, business and financial services, and educational and research institutions must be able to service and support the activities of businesses that want to succeed on a global scale and must seek to improve the coordination and consistency of their services, programs and initiatives;



Facilitating access to trade services: businesses would benefit from better using the trade services available to them. Service providers and associations should work together to improve awareness and facilitate access to these services. Service providers should adopt a business approach by seeking to build a relationship with their clients and taking the time to understand their business. Associations and business networks should be empowered to play a greater role in providing access to business services because they are able to reduce information costsfor companies and present the entire range of services available to them;

Learning from best practices: industry partners should strive to continuously improve their services by looking at what organizations in other countries and other parts of the country are doing best and replicating it when applicable.



Intensifying Global Business Development Efforts

Trends

Global Competition, Global Opportunities

In the recent past, for Canadian manufacturers accounting for the bulk of Canada’s international trade, the concept of “globalization” mostly represented the surge in foreign competition in their domestic and main export markets. This occurred at a time when the Canadian dollar appreciated rapidly and prompted Canadian manufacturers to cut costs and improve operational efficiency in order to remain in business.

This led to a growing number of companies of all sizes to explore international investment opportunities. They did so in part to find ways to reduce costs and as an answer to some domestic challenges such as labour shortages and proximity to markets, and in part to grow beyond their traditional markets.

However, with the sudden downturn in the world economy rooted in the US recession, along with the fact that emerging economies have not been as adversely affected, more businesses realize that they need to look beyond their traditional markets for business opportunities.

Globalization of Business Strategies and Business Networks

During CME’s Global Business 20/20 roundtable sessions, participants also mentioned that succeeding in global markets means more than simply exporting to, importing from, or investing in other countries.

In the future, successful businesses will be those who focus on the requirements of the global enterprise – on businesses, supply chains, or business networks in which all aspects of commercial activity take place concurrently in a number of countries around the world. The most successful countries will be those who do what is necessary to capture the activities that bring the highest economic benefits.

Current Challenges

Strong Concentration of Trade Flows

A challenge facing Canadian businesses is that their sales are heavily concentrated in the Canadian and US export markets. Statistics were shared



during some of the roundtable sessions showing that 89% of manufacturers’ production was sold in either the United States or Canada.

Moreover, it was said that about a third of Canada’s trade with the United States takes place within the same company. In total, 45% of Canada’s trade with the United States takes place with five American states and 40 % of Canada’s exports to the United States depend on five industrial sectors.

Some businesses also said that given their size, they consider that they will have room to grow within North America. The North American market is sufficiently large for these companies and they still feel that they have little incentive to look for opportunities overseas.

The observation was also made that currently, Canada’s exports outside of North America concern mostly commodities while we tend to import more finished and higher value added goods. Some believe that Canada needs a strategy to grow its exports of manufactured goods and high value-added products and services to overseas markets.

Very Competitive Markets

For a long period, Canada’s exports were price competitive. Many companies competed based on cost rather than on differentiation. Lately, the price advantage of goods made in Canada has weakened and is compelling companies to pursue strategies that lead to greater differentiation of their products and services.

The observation was also made that competition is also growing in technology-intensive and higher value-added sectors as well –pharmaceuticals and aerospace are two examples. It was also mentioned that Canada is losing market share in almost every foreign market as a result of greater competition.

Limited Global Business Development Strategies

Many small and medium sized businesses have limited international exposure and little expertise doing business outside of North America. Moreover, for these firms business development activities heavily rely on the CEO who needs to wear various hats and play multiple and sometimes competing roles within the organization. Some reported time as a constraint to developing business overseas. Moreover, many CEO reported having little experience assessing business opportunities and risks associated with doing business in foreign markets.



Opportunities

Taking Advantage of the Need to Find New Clients

As mentioned previously, exporters are seeking to diversify their markets. Their willingness to look for markets beyond North America is evident and exacerbated by the downturn in the US and Canadian markets. Moreover, the niche strategy followed by many Canadian businesses compels them to broaden their horizons as market opportunities become more limited in their traditional markets.

Branding Canada in Global Markets

A large number of roundtable participants mentioned that Canada has a positive image and reputation abroad and this will is an asset that should be leveraged. Canada is known for its resources, its skilled workforce, its innovative capacity and for being a good corporate citizen. Canada should capitalize on that positive image and strive to build a stronger global brand.

Need for Canadian Solutions

The world has significant environmental, energy and population challenges it needs to address. Businesses and governments around the world are looking for solutions to these challenges, many of which are being developed by innovative Canadian companies. There is an opportunity for Canadian businesses that are leaders in their respective industries and that can develop solutions to those global challenges to capitalize on those needs.

Leveraging Canada’s Immigrant Population

Canada has a strong contingent of immigrants and foreign students coming from every corner of the world.

Some of these immigrants represent a source of knowledge that could prove vital in developing new markets, as experienced by some of the companies that have been able to hire and integrated skilled immigrants.

Canadian businesses have an opportunity to leverage Canada’s ability to attract skilled immigrants to use their expertise in developing new markets around the world.

Sharing the Knowledge of Experienced Exporters



Canada counts a solid base of experienced exporters, many of which are small and medium sized companies. These businesses could be invited to share their expertise so that other less experienced exporters may learn from them and receive honest peer feedback on their business development plans. Moreover, private sector service providers such as trading houses and business development consultants have expertise that could be shared with groups of companies so that they can enhance their comprehension of international trade activities.

Business consortia have been used successfully for many years to help manufacturing companies implement lean practices and improve operational efficiency. These consortia typically entail sharing professional resources among many small and medium sized companies, and encourageparticipants to provide feedback to one another. Using this approach to create groups of companies seeking to grow sales in new markets could help business executives formulate and execute their business development strategies.


Roundtable participants shared the following ideas and recommendations to intensify Canadian companies’ efforts to grow their sales in international markets:

Industry partners should seek to help senior executives, CEOs more specifically, in identifying and assessing business risks and opportunities in foreign markets, and in finding reliable foreign partners;

Industry partners should seek to improve and scale up their efforts to connect Canadian companies with business opportunities in foreign markets;

Governments should leverage Canada’s positive image in foreign markets by building a stronger Canadian brand – that brand should be linked to Canadian technology and innovation;

Industry partners should encourage companies to develop innovative products and services that respond to global needs;

Businesses should look to hire more skilled immigrants and foreign students as a means to use their cultural, language and business skills to grow sales in global markets;

Industry partners should seek to build consortia of companies that link experienced exporters, business development experts and companies that seek to expand in foreign markets. These consortia would help businesses share resources, exchange best practices and formulate, review and implement business development strategies.

Main Issues Raised – Summary of CME’s Global Business 20/20 Consultations

Global Business 20/20 – Building Our Vision for the Future

Trends Challenges Opportunities Recommendations

Weathering the Economic Storm

Stronger competition Restrained opportunities in

traditional markets; growing opportunities in emerging markets

Growing infrastructure spending

Higher raw materials costs Constraints on carbon

emissions Higher risks, especially in

financial and currency markets

Fragmentation of supply chain activities

Need to escape commoditization trapthrough innovation

Ageing population Growing competition for

skilled labour

Recession rooted in US market

Overcapacity in industrial markets

Understanding the fundamental changes taking place in the economy

Volatility in commodity prices and currencies

Tighter credit and higher financing costs

Greater risks Rising debt levels, especially

by governments in developed economies

Growth of emerging economies – new sources of growth

New and emerging customer demand, e.g. supplying technologies to solve new environmental, energy challenges

Sustained investments in infrastructure

Business investment opportunities, i.e. acquisitions

Higher health care spending

Looking at what more successful businesses are doing

Making manufacturing a priority

Improving competitiveness by targeting infrastructure spending on Canada’s economic and trade infrastructure

Help businesses meet the green challenge

Leveraging Canada’s logistics infrastructure such as gateways

Better connecting businesses with opportunities

Strengthening Business Capabilities

Need world class operations at every stage of the supply chain to compete globally

Focus on providing solutions to customers’ problems

Focus on core competencies and developing partnerships

Innovation becoming key part of business strategies

Better managing change to adapt to changing business conditions

Lack of control over economic conditions –emphasis on short term survival

Canada’s economic competitiveness – attracting and retaining investment

Surmounting internal business development constraints

Making innovation a tangible reality within the company

Access to financing

Sharing best practices Implementing strategies

that give a sustainable competitive advantage and improve performance

Improving coordination between service providers

Improving access to services that can help strengthen business capabilities

Addressing internal constraints on performance improvement

Continue to share and implement best practices

Governments to improve business environment in critical areas (tax, regulations, barriers to trade, infrastructure, skills development, new technology adoption) and to act in concerted fashion

Raising and Leveraging Canadian Know-How

Countries are actively growing their talent base

Talent will be in higher demand in Canada

Canada succeeds at attracting skilled immigrants and foreign students

Demographic trends will accentuate skilled labour shortages

Current and looming skilled labour shortages

Integrating immigrants into the workforce by getting their skills and credentials recognized and certified

Mobilizing workers towards common objectives

Using immigration to address skills shortages and support businessdevelopment activities

Upgrading workplace skills Improving the image of

manufacturing to encourage students to make choices that lead to careers in manufacturing

Positioning manufacturing as the innovative, globally-oriented sector of the economy to attract more students and professionals

Making the development of a skilled workforce a central part of economic development strategies

Improving graduation rates Attracting more immigrants

whose skills are needed and recognizing theircredentials; encouragingimmigrants to settle outside urban areas

Improving access to temporary foreign workers

Improving workplace skills and aligning training with business development objectives

Better supporting business leaders in developing global business development skills

Mobilizing management and workers around common organizational objectives

Building Synergies with Industry Partners

Business needs and requirements are changing – need customized and specialized services

Increased private sector support for trade-related functions (e.g. third-party logistics)

Lack of awareness of existing services

High information costs to finding out which services are available, and whether they are accessible

Lack of coordination between service providers

Growing business interest in developing new markets

Building successful partnerships between businesses and those that can help them

Better coordination of services and initiatives

Facilitating access to trade services

Learning from best practices

Intensifying Global Business Development Efforts

More intense global competition

More opportunities in world markets

Globalization of business strategies

Strong concentration of trade flows

Current markets where Canadian businesses are present are very competitive

Canadian businesses have limited global business development strategies

Taking advantage of the fact that businesses need to find new clients

Enhancing Canada’s brand image in global markets

Need for Canadian solutions to global problems

Leveraging Canada’s immigrant population to serve new markets

Sharing the knowledge of experienced exporters throughout industry

Help CEOs in identifying business opportunities and assessing risks

Better connecting businesses with trade opportunities

Leverage Canada’s positive image to build a strong global brand for Canada

Helping businesses, research centres and educational institutions work more closely together to improve Canada’s ability to innovateand commercialize new products, services and solutions

Hire more skilled immigrants to grow international sales

Establish business development consortia



Acknowledgements

Premier Partners

CME wants to thank its Premier Partners for their financial contribution for this initiative and their ongoing commitment to the success of Canadian exporters.

Canadian Commercial Corporation (CCC)Export Development Canada (EDC)Foreign Affairs and International Trade Canada (DFAIT)Forum for International Trade Training (FITT)Microsoft Dynamics

We also wish to underline the special contribution of the following individuals:

Canadian Commercial Corporation (CCC)

Martin ZablockiVice President, Strategy and Organizational Development

Joanne LostraccoDirector, Strategy and Organizational Development

Lisa RhoadesAdvisor, Business Strategy

Tiffany KizitoAdvisor, Business Strategy

Export Development Canada (EDC)

Ruth FothergillVice President, Corporate Outreach

Lyne HébertAdvisor, Corporate Outreach

Marie France SénécalSenior Director, Marketing Sponsorships

Hugh RoseAdvisor, Corporate Communications



Foreign Affairs and International Trade Canada (DFAIT)

Gisèle Laframboise DirectorConsultations and Liaison Division

Léopold BattelDeputy DirectorConsultations and Liaison Division

Louise WhiteTrade Policy OfficerConsultations and Liaison Division

Noelle GrosseCommunications ServicesConsultations and Liaison Division

Forum for International Trade Training (FITT)

Caroline TompkinsPresident

Scott FerrisDirector, Business Development

Silvia BaptistaManager, Marketing Communications

Regional Partners

CME is also grateful to its regional partners for their contribution and their support in organizing sessions in their region.

Government of British Columbia, Ministry of Trade, Technology and Economic Development (TTED)

Saskatchewan Trade & Export Partnership (STEP)

We also wish to highlight the contribution made by these specific individuals:

Government of British Columbia, Ministry of Trade, Technology and Economic Development (TTED)



Don WhiteExecutive DirectorTrade Initiatives Branch

Saskatchewan Trade & Export Partnership (STEP)

Brad MichnikExecutive DirectorTrade Development

Brenda HawrylukTrade SpecialistManufacturing

CME also wants to thank the following local partners for their support in organizing meetings and inviting local businesses to participate.

Canada Export Centre

FedNor International Business Centre

Hamilton Economic Development

London Economic Development Corporation

Economic Development & Tourism Services, City of St. Catharines

Ottawa Manufacturers' Network

Toronto Economic Development

City of Kitchener

The Corporation of the City of Cambridge

WindsorEssex Development Commission

Société de développement économique de Drummondville

Deloitte & Touche LLP



Host Companies

Five meetings were held at participating companies’ offices. We want to thank each of these exporters for their warm welcome and overall support.

Soprema Inc (Chilliwack, British Columbia) Paul-Albert BoileauDirector of Operations

Formashape (Kelowna, British Columbia)Peter JeffreyPresident

E. H. Price (Winnipeg, Manitoba)Gerry PriceChairman & CEO

Superior Boiler Works & Welding (Stoney Creek, Ontario) David DeFaveriVice President

Groupe Canam (Boucherville, Québec)Robert DutilVice-président

Facilitators

When possible, the association used the services of experienced professionals to facilitate roundtable meetings and encourage dialogue during the meetings. These facilitators distinguished themselves with their knowledge of the issues discussed and their ability to listen and understand participants’ interventions. We are thankful for having had the opportunity to benefit from their services.

Doug Taylor (British Columbia) Pacific Business Intelligence

Patricia Glenn (Alberta)PresidentProactive Business Solutions

Brenda Hawryluk (Saskatchewan)Trade Specialist, Manufacturing STEP



David Archer (Ontario)PresidentInternational Business Trainers

Luc Martin (Montreal, Mississauga)National Leader, ManufacturingDeloitte & Touche LLP

Canadian Manufacturers & Exporters’ Regional Offices

Finally, we wish to thank all our colleagues at CME who played a role in this initiative’s success.

National OfficeJayson Myers, President & CEOJeff Brownlee, Vice President, Public Affairs and CommunicationsJean-Michel Laurin, Vice President, Global Business PolicyMarie Morden, Communications CoordinatorRonda Landygo, Director of AdvertisingGeoff Schaadt, Director, National ProjectsLori Stone, Manager, Special Events

CME – British ColumbiaCraig Williams, Vice PresidentZena Caul, Director of Events

CME - Alberta/SaskatchewanBrian McCready, Vice PresidentRobert Hansen, Executive Director – Industry LiaisonBrenda McCready, Consortia Services

CME – ManitobaRon Koslowsky, Vice PresidentHelen Mitchell, Office Administrator

CME – OntarioIan Howcroft, Vice PresidentPaul Clipsham, Director of PolicyRobert Burgess, Senior Membership RepresentativeRon Subramanian, Director Special ProjectsStephen Rach, Oil Sands PartnershipsTerry Adamo, Manager Policy & Administration



Manufacturiers et exportateurs du QuébecJosé Jacome, General ManagerRémi Boudreault, Director, Business DevelopmentLuc Chartrand, Director, Regional DevelopmentKareen Pate, Project Coordinator

CME – New-BrunswickDavid Plante, Vice President

CME – Nova ScotiaAnn Janega, Vice PresidentJacqui Squires, Office Administrator

CME – Newfoundland & LabradorBill Stirling, Vice PresidentJackie Field, Membership



About Canadian Manufacturers & Exporters

Profit by Association

Canadian Manufacturers & Exporters (CME) is Canada’s leading trade and industryassociation and the voice of manufacturing and global business in Canada.

The association represents more than 10,000 leading companies nationwide. More than 85% of CME’s members are small and medium-sized enterprises. As Canada’s leading business network, CME, through various initiatives including icosmo.ca and the establishment of the Canadian Manufacturing Coalition, touches more than 100,000 companies from coast to coast, engaged in manufacturing, global business and service-related industries.

CME’s membership network accounts for an estimated 82% of total manufacturing production and 90% of Canada’s exports.

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