Fully integrating digital tools across operations may play an increasing role in the economy
Despite most small businesses in Canada using digital tools, only a small number were found to fully integrate digital adoption in their operations, a new report by the Canadian Federation of Independent Business (CFIB) found.
In the report, only 10% of SMEs have fully integrated digital adaptation in their operations while 92% were found to already be using digital tools to conduct their business. With Canada only seeing a 3% growth in productivity over the last decade compared to the US, which saw an 18% increase, CFIB Director of Research Marvin Cruz noted the importance of digital transformation in the success of small businesses.
Cruz, who also co-authored the CFIB report, said that digital tools can help businesses boost their productivity through inspiring content, speeding up projects, and automating repetitive tasks. He added that it gives businesses more time to “take on more clients or focus on other important work such as strategy or personalized marketing.”
Notably, 55% have already seen returns in their investment in these tools within the first two years. These businesses reported a 29% boost in productivity on average for the first year of their investment.
The report also showed that the growth in confidence regarding the potential of AI to boost productivity, with 23% of SMEs investing in generative AI (GenAI) tools in the past three years. Meanwhile, 25% of small businesses were planning to invest in such tools as well over the next three years. The number of SMEs planning to invest in AI analytics also rose from 7% to 16%.
"While there's growing interest in adopting AI and overall technology, small firms are still early in the journey," said Alchad Alegbeh, research analyst at CFIB.
Alegbeh added that helping small businesses integrate digital tools more in their operations is “the next frontier” and would be beneficial for the economy.
As a way to further boost Canada’s productivity, the CFIB urged policymakers to raise more awareness about available government programs and incentives for digital and AI adoption, introduce tax-based incentives in capital expenses related to digital investments, provide tax relief so SMEs can invest in technology and training, and offer accessible guidance to help SMEs see how AI and other digital tools can help their business.
The report by CFIB was co-sponsored by Payworks and Sage.
