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A BDC study reveals that nine out of 10 SMEs invested in digital technology in 2021, but only one in 20 use digital technologies efficiently
May 10, 2022, Montreal — Canada’s small and medium-sized businesses are making significant investments in digital technologies, with nine out of 10 (91%) investing an average of $118,000 in 2021, says a new BDC study released today.
Entitled, “Seize the Technological Advantage: Why Digitally Mature Companies Perform Better”, the study finds that digitally mature businesses show much higher growth than others and invest more in digital technologies, which they understand will provide them with benefits. The study finds that the key to digital success is good planning, as 99% of digitally advanced businesses have a digital plan.
“The most digitally advanced companies use technology, not only to improve or support their current business, but also to solve their problems differently,” says Pierre Cléroux, BDC’s Vice President, Research and Chief Economist. Cléroux points out that businesses no longer have to invest as much in high-end computer equipment to benefit from digital possibilities. As a result, BDC has updated the methodology used in 2018 to measure a company’s digital maturity.
The study finds that a digital divide is emerging among Canadian businesses. Many companies are slow to digitize, and, as a result, they find it harder to finance their growth projects that would allow them to get started on their digital shift. In fact, it is estimated that only one in 20 businesses use digital technologies effectively.
The report highlights the main challenges of digitization: cost (42%); cybersecurity (32%); uncertain benefits (27%) and technology integration (27%). It emphasizes one distinguishing characteristic of digitally advanced businesses: the digital plan. Almost all advanced businesses have created a digital plan that details their technology vision for the coming years. The study offers 6 tips to a successful technology acquisition:
The Government of Canada’s Digital Adoption Program (CDAP) offers support to businesses who want to adopt digital technologies to remain competitive. This program offers a grant to help develop a digital plan with experts and a 0% loan of up to $100,000 to facilitate the acquisition of new technology. Entrepreneurs can also visit BDC’s Advisory Services to talk to a specialist or explore BDC’s Technology financing for more support.
BDC updated the 2018 study by surveying more than 1,500 Canadian small and medium-sized businesses between November 12 and December 3, 2021, on digital maturity. BDC defines digital maturity as a combination of digital intensity and digital culture. Digital intensity measures the use of digital technologies in a company’s operations, such as customer experience and data and analytics. Digital culture measures a company’s ability to make changes to increase its digital maturity and includes such things as leadership, strategy, and the retention of a skilled workforce.
BDC is the bank for Canadian entrepreneurs. It provides access to financing, as well as advisory services to help Canadian businesses grow and succeed. Its investment arm, BDC Capital, offers a wide range of risk capital solutions. For more than 75 years, BDC’s only purpose has been to support entrepreneurs in all industries and at all stages of growth. For more information and to consult more than 1,000 free tools, articles and entrepreneurs’ stories, visit bdc.ca.
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