Joe Mimran (00:01) Hello and welcome to the EDC Export Impact. We’re going to be discussing opportunities for Canadian business in the Indo-Pacific region and why it needs to be at the top of your expansion plan list if it isn’t already.
Joining us is Lyne Jacques, the chief revenue officer for Miovision, a Canadian cleantech company that’s already doing business in the Indo-Pacific and is actively planning to expand its footprint there. We also have Sven List with us. Sven is the senior vice-president of EDC’s Corporate and International Group. And as you probably already know, EDC is a major player on Team Canada, which is responsible for helping Canadian businesses grow globally.
I’d like to begin today’s episode by acknowledging that we’re recording from my office in Toronto, which is on the traditional unceded territory of many nations, including the Mississaugas of the Credit, the Anishnabeg, the Chippewa, the Haudenosaunee, and the Wendat peoples, and is now home to many diverse First Nations, Inuit and Metis people. We value taking this moment to deepen the appreciation of our Indigenous communities wherever we are, and to remind ourselves of our shared debt to Canada’s First Peoples.
Sven, why don’t we start with you? Can you give us a rundown on the Indo-Pacific market, its scope, and why it’s so important to Canada’s trade strategy? And of course, can you tell us why Canadian businesses should consider this region in their export plans?
Sven List (01:36): Yes, absolutely, Joe. Thank you. First of all, we need to acknowledge that we’re actually talking about a large region. The Indo-Pacific region, we’re really talking about 40 countries, including some of Canada’s key trading partners, like Australia, India, Japan, South Korea, and it’s growing. It’s estimated that by 2040, this region will hold about 50% of the global gross domestic product (GDP). Now, that’s substantial. In fact, right now, the Top 5 countries in this region have a combined GDP of just under US$30 trillion. And just by way of comparison, the European Union’s entire 27 member states have a combined GDP of just over $17 trillion.
Let’s touch on market size. Demographically speaking, the Indo-Pacific region is home to 65% of the world’s population. By 2040, it’s estimated that the region will account for 40% of global consumption. But you know, beyond the numbers, it’s about how the Indo-Pacific region is growing. We’re talking about a rising middle class and a growing demand for more proteins, better quality agri-food, more consumer goods and digital delivery channels. In addition, this region is in an energy transition mode of its own with its own net zero goals.
As some countries in the region are still developing, there’s a high demand for infrastructure, especially infrastructure wrapped around cleantech. We’re talking in the US$6-$10 trillion range. That’s huge. Many of these projects pose opportunity to leapfrog traditional technologies and accelerate growth. There’s a high demand for digitization and manufacturing innovation in the region and quite frankly, geopolitically, we’re seeing a re-orientation of supply chains in these markets that are going to bring opportunities with them.
So, why is this so important for Canada, for Canadian companies? You know, Canada has a problem. Compared to other OECD (Organisation for Economic Co-operation and Development) economies, we’re underperforming on the international trade front. Canada has been losing market share of international trade over the years, and if we want to regain our standing as the leading trading nation, we need to step up our game. Now, our government has identified the Indo-Pacific as a priority market, and we are, at EDC, walking in lockstep. We’re looking to help grow Canada’s participation in this region; supporting through investments; supporting through loans, and helping Canadian companies find traction there. Right now, we’re focused on India, Indonesia, South Korea, Singapore, Australia, among others. If you’re a Canadian company in agriculture or agri-food, in the infrastructure, advanced manufacturing or digitalization sectors, you need to be looking at these markets. This is where growth will be centred in the decades to come.
Joe Mimran (04:42): So, there are lots of great reasons to focus on the Indo-Pacific. If you’re a Canadian exporter, we know EDC’s job is to help Canadian companies do business around the world. But can you tell us what EDC is doing specifically to help them gain traction in these markets?
Sven List (04:59): Quite frankly, that’s a big question and we have quite a lot going on in the region. First of all, EDC has boots on the ground in many of these markets and has so for decades. Around the world, we have 20 representations in 14 countries, and in the broader Asia-Pacific region, you’ll find us in New Delhi and Mumbai, in Singapore and Beijing and Shanghai. In fact, Singapore is our hub in the region and we, ourselves, are growing our presence there with a dedicated team, both for the business development side, as well as the underwriting side of our business.
This year, we’re planning to open additional representations: One in Indonesia and one in South Korea. So, you can see that we’re also living what we’re preaching. We’re expanding in the region and it’s not just EDC promoting Canadian trade. EDC works closely with Canada’s Trade Commissioner Service, or the TCS for short, and they’re also a key player on Team Canada to make Canada succeed in the region.
So, what do we do there? We’re focused on building partnerships, strategic critical partnerships and networks with some of the biggest conglomerates and corporates in the region, with governments, with the financial institutions there, with all the various players in the trade ecosystems in the region. We know that this market is relationship-driven and establishing the right relationships from the get-go is key to long-term success. And we’re also on the ground, as I said, building market knowledge. We’re looking at where the opportunities are; we’re looking at regulations at competition, at language culture and other potential barriers, so that we can share this information with Canadian companies.
Lastly, we also do what we’re known for doing best: We assess risks. We’re mapping out how to take smart risks in the region, so that we can share that with Canadian companies. And we do all of this to help build Canadian capacity to be able to make the right introductions to Canadian companies in the region, so that they can feed into the critical supply chains in the region.
Now, Joe, you might wonder how we go about doing this. We use all the information intelligence and relationships we have built to lead large companies, so we can establish a Canadian trade ecosystem and build awareness of our capabilities and capacity. The reality is where large Canadian companies succeed, more Canadian companies will follow of all sizes. This will pave the way for medium-sized Canadian companies in the short term, as the supply chains continue to globalize and smaller Canadian companies should also benefit in the longer term.
Now, having said all of this about the possibilities, let’s not make a mistake in thinking that there aren’t any challenges in the market. The business environment is complex; it’s fragmented and highly, highly competitive; incredibly price sensitive. There’s a fierce international competition, but frankly, the way that we look at it, if other economies and companies are succeeding there, so can we. Now, remember, this is a region that’s extremely relationship-driven as I mentioned. If you want to do business there, you’re going to have to play the long game. You’re going to have to be present here. And that’s not just an occasional visit; it’s really getting to know the environment, getting to know your counterparts, looking eye to eye, making a commitment to the region, letting them know you’re in it for the long haul.
From an ESG perspective, undoubtedly, there are some countries in the region that have challenges and we need to help Canadian companies understand what those are and how to manage them. Having said that, there’s already a considerable number of Canadian companies actively growing in this market. In fact, 22% of Canadian exporters already sell there, and 33% of current exporters are planning to expand there. Those who are already there are looking to expand to even more markets in the region.
A lot of Canadian exporters have found success in tapping into gateway markets, like Singapore and Australia, and we strongly encourage that these markets are more accessible, they have fewer challenges, and once Canadian companies have established themselves there and succeeded in these markets, it’s easier to break into the more challenging markets.
Joe Mimran (09:32): Thanks for that incredible overview. Sven. I think this is a good time to bring Lyne into the conversation. First off, Lyne, can you briefly explain to our audience what Miovision does?
Lyne Jacques (09:43): Miovision was founded 14 years ago and has 300 employees based in Kitchener, Ontario, with an office in Atlanta, Georgia, and an office in Cologne, Germany. What we do, we’re helping cities to be safer. We help optimize their traffic and we help them to reduce carbon emissions. We build two different types of solutions, one that is helping cities to temporarily do counting of intersections. We’ve been able to sell these solutions in 68 countries to 2,400 customers.
We’re now the second-largest player in North America to sell what we call permanent solutions that reside at the intersection that makes the intersection smarter. Our solutions are making the cities and the intersection four times more efficient. They’re saving 70 tonnes of CO2 emission per intersection and to date, we’ve been able to count through all our solutions, 30 billion vehicles, 1.5 billion pedestrians with a 96% of the level of accuracies. We’re all about making the intersection smarter and we’re all about helping new economies make their city smart.
Joe Mimran (11:12): Wow. Talk about cutting-edge technology that can make our neighbourhood safer and more environmentally friendly. Very impressive, Lyne, and very timely. Sven pointed out that there’s strong demand for infrastructure solutions in the Indo-Pacific, especially those involving cleantech. So, tell us how did Miovision make the leap into that region and in which countries specifically have you been successful?
Lyne Jacques (11:37): Like most of the smaller companies in Canada, you always start by being opportunistic, right? You reach out, you go to trade shows, you meet with different types of enterprises, and then you start to position your solution. Turns out that we’ve been significantly successful in, like Sven said, Australia and Singapore. Right now, we’re in eight countries in Southeast Asia, but we have more than 25 customers in Australia and eight customers in Singapore. We also have a significant presence in New Zealand and a small presence in Japan, and technically, we’ve been able to sell to India, Indonesia, China, but nothing was very planned for. Now, we’re aiming to double our business this year in Asia-Pacific, and we have a plan to go and be way more aggressive in 2024.
For me, I have to say, it’s my third amazing experience in APAC. I had the privilege of selling in 14 countries as the CP sales of our small Quebec software company where we had employee presence in India, Japan, Philippines, Singapore, China, and Australia. And we had an amazing experience there. At that time, APAC was our fourth market with 15% of our global revenue. In 2019, I had the privilege as the chief revenue officer of a smaller startup in AI (artificial intelligence) to get the support of the Canadian government and build a significant amount of business in Japan and Korea to the point where 40% of our overall business was made in these two countries.
I've been able to see how strong the relationship of the Canadian government with Japan can help small companies. With speed-dating activity and all kinds of trade shows, we’ve been able to have a significant amount of success. Now this time, my first time with EDC, but my third time in the market and I’m privileged to work with an amazing team based in Ottawa, and we’re mostly brainstorming on how we’re going to build this market this time in Asia-Pacific. We have plenty of ideas and amazing discussions.
