In 2015, Toronto-based CORE Products Ltd. reached a challenging yet common barrier. From a 2010 start-up in a single Hamilton warehouse, the company had managed to grow its annual revenues to $3 million. Its founders were determined to continue to expand the company’s reach through exports, but the LED lighting product manufacturer had barely enough capacity to fill its Canadian orders.
This year, CORE changed its name to Premise LED Inc. to reflect its commitment to serving broader markets – in the same month it was ranked 158th on the 29th annual PROFIT 500 list of Canada’s fastest growing companies. With five-year growth of 445 per cent, the company’s revenues reached $12 million in 2016; and it’s on track for $20 million for 2017.
Growth potential
It’s a notable success story. But according to Priority Export Markets for Toronto Region Industries, a recently report released by the Toronto Region Board of Trade, it’s also a trajectory that is well within reach for Canadian small and medium-size enterprises (SMEs).
“Our aim is to have every business in Canada that isn’t currently exporting or expanding their exports ask themselves why,” says Jan De Silva, the Board’s President and CEO.
Only 4 per cent of Canada’s SMEs are exporters, compared to 27 per cent in France, 24 per cent in Japan and 28 per cent in Germany. Given that 99 per cent of Canadian businesses are small or medium-size enterprises, the economic activity currently lost to the export participation gap is enormous.
“If Canadian SMEs exported at the same rates as Canada’s larger companies, 23 per cent, it would mean $225 billion in new economic activity. And we know from Conference Board of Canada research that each $100 million in new exports translates to 1,000 new jobs,” De Silva stresses.
Bridging the opportunity gap
The new report focuses on the seven industries with the greatest opportunity for export growth in the Toronto region, and analyses the top 15 export markets for each of those industries by sales volume and growth, with key contacts and resources. The report’s release coincides with the launch of World Trade Centre Toronto (WTC-T), the Board’s trade services arm, which supports export growth through its International Trade 101, Canada’s Trade Accelerator and Market Activation programs.
The report and the programs build on the findings of the Board’s 2015 Export Strategy Report , which focused on the question of why more Canadians businesses weren’t exporting, De Silva notes. “We wanted to uncover the issues. The primary answer – which was universal among companies that weren’t exporting at all as well as those that weren’t growing their exports – was that they were too busy serving domestic markets to tackle the research, finance and development strategy required to identify and enter new markets.”
In addition to partnering with sponsors JP Morgan Chase & Co. and the City of Toronto to supply this key market research, the Board created its Trade Accelerator Program (TAP GTA). The program brings together “all the pieces of the export ecosystem, through a partnership with TAP’s national partner RBC, organizations including Export Development Canada and the Business Development Bank of Canada, legal and accounting firms, and leading Canadian exporters willing to meet with SME leaders and share lessons learned,” says De Silva.
TAP brings nominated executives together for four days over a period of 12 weeks, where they work with experts to recalibrate their companies and make them export-ready. “At the end of the program, they have a fundable strategy for export into growth markets,” she says, pointing to Premise LED/CORE as some of the earliest TAP participants.
Canada-wide transformation
Through these and other services, the Board and WTC-T are partnering with EDC and other organizations to catalyze export growth in the GTA. By partnering with other major cities through the Canadian Global Cities Council, these approaches are also being shared across the country. For example, after proving its immense value in the Toronto region – with the international growth of participants up to an average of 68 per cent just one year after program completion, in markets that include China, Sweden, Japan, UAE and Mexico – TAP is rolling out in Vancouver and Winnipeg this fall.
“We’re now training the trainers,” reports De Silva. “This thinking and methodology is easily transferable – and it’s having a tremendous impact.”
