The immigrant population plays a key role in the western economy.
Cultural diversity is making an increasingly significant contribution to the economic well-being of Western Canada. It is a jewel yet to be discovered and exploited by most British Columbia and Alberta’s small and mid-sized businesses (SMEs).
What are the facts?
In B.C., the significant increase in the immigrant population is no secret to those living in Greater Vancouver. More than one million immigrants, primarily from Asia, have moved here during the past two decades.
Statistics show that in 2001, immigrants represented 26.1 percent of the total provincial population. Most of these immigrants – nearly three in every four – live in the Vancouver metropolitan area, where they represent more than 37 percent of the population. This cultural diversity provides an open window to the world.
In terms of trade and investment, B.C. exports goods and services valued at $43.5 billion dollars while importing $35.6 billion. The United Nations Conference on Trade and Development’s annual investment report recently reported that China replaced the United States as the most attractive destination for foreign direct investment in 2003. This evidence of strong economic growth and improved investment environment in Asia is driving the need for realignment by British Columbia and Alberta SMEs.
So, what does all this information mean for business owners in the West?
SMEs must immediately shift their business strategies to exploit these new business opportunities emerging in Asia and place less reliance on growth on the United States market.
Don Drummond, the senior vice-president and chief economist for T.D. Bank, recently noted that many Canadian SMEs have been taking advantage of the opportunities globalization offers, “but there are tremendous potential benefits still to be tapped.”
The T.D. Bank has set up a loan program designed specifically for Asians to support new immigrant entrepreneurial ventures in Asia. The bank’s most senior decision-makers for this program are Asian and recognize the opportunity Asian markets present.
But unfortunately, Western Canada’s exports to Asia are concentrated in the hands of a small number of large corporations. In large part, the exports focus on commodities such as lumber, potash and oil. It is troubling to read in a recent T.D. Bank report that only 18 percent of SMEs indicate that they export any of their goods and services – especially since SMEs represent 99 percent of registered businesses in Canada. The thought of doing business with a country other than the United States is just emerging in the minds of SME owners.
Almost half of the independent businesses that export said they became exporters because of unsolicited inquiries rather than part of a planned expansion. This cannot be left to chance.
Increasingly, SMEs also sell to, employ immigrants or do both. Drummond has also noted that Canadian firms will have to work with governments to raise the skill level of workers and ensure more successful integration of immigrants into the Canadian economy.
By luck rather than design, I suspect that B.C. and Alberta find themselves uniquely positioned in a global, multicultural environment.
We have new Canadians who know the culture, have the contacts, and have the entrepreneurial skill to enable both provinces to exploit the opportunities found in a hot Asian market.
The provincial governments in Alberta and B.C. must recognize and support the competitive advantage embedded within our provinces. We must reflectively think about how we can best support and encourage our cultural diversity.
It is an overlooked jewel that needs to be polished.
Note: This article was originally published in 2005.
