BDC report highlights four key trends shaping the future of Canadian business
Canadian businesses are grappling with the changing reality of the business landscape, both domestically and worldwide.
While the last few years have been challenging due to the pandemic and inflation and interest rates, there are other factors in play that have been emerging and that are likely to remain for some time to come.
A new report from BDC, Canada’s bank for entrepreneurs highlights four critical trends that your business owner clients are facing as the future of Canadian business.
Firstly, the cost of doing business which has been driven by global inflationary pressure and the higher rates used by policymakers to tame inflation in their economies. Three quarters of respondents to the survey said rising costs have impacted their business. But while some of the costs will ease, energy is one key cost that is likely to remain elevated for the foreseeable future due to geopolitics and the lag in investment to transition to lower cost solutions.
Next, is the changing consumer base with all Gen Zs entering adulthood by 2030 and demanding change in the products they choose. While two thirds of Canadians said they would pay more for locally produced goods, half of consumers said they would pay more for environmentally friendly goods and this rises to 71% among Gen Zs compared to 54% of other generations.
ESG will become more important throughout the supply chain as consumers demand more transparency in the goods they choose.
The third trend is the labour shortage, which the report says will likely remain for the next decade with skilled workers in demand and especially in areas where unemployment is among the lowest. Although 88% of businesses think it will be just as hard or harder to find employees in the next five years, one third are not planning strategies for hiring, training, or retaining employees.
Finally, technology and the rapid pace of change is a key trend. While tech can help with some of the other challenges including hiring gaps and cost savings, the risk is being disrupted by emerging technologies.
The report found that 82% of businesses already consider technology critical and 38% anticipate significant disruption from new technologies, so it’s essential that tech is embraced by entrepreneurs.
"We are past the point where adopting new technologies is good advice; it is mandatory," says Pierre Cléroux, VP Research and Chief Economist, BDC. "Increasing costs, changing consumer behaviours, labour shortages and technological trends all interact with one another. By adopting new technologies, small businesses can turn potential disruptions into opportunities to shape their own future and drive their business forward."
