In the current economic reality beset by international trade tensions, volatile geopolitical developments and rising commodity prices, the cost of standing still has never been higher. Oil prices surpassed US $100 a barrel again in September as the war in the Middle East shows little sign of easing. Meanwhile, another round of U.S. tariffs on Canadian goods went into effect, which could lead to an increase in the cost of doing business and a higher degree of risk for companies reliant on the U.S. market.

Canadian businesses cannot control the trajectory of global events, but they can strengthen their internal resilience by scaling up, adopting technology and diversifying their customer and supplier bases. If done proactively and thoughtfully, these actions can help firms remain competitive regardless of what happens next.

Scaling up to Meet Modern Challenges

Small businesses are the backbone of the Canadian economy; operations with fewer than 100 paid employees make up 98 per cent of all Canadian businesses, according to the Canadian Chamber of Commerce. While there are clear benefits to smaller (often locally-owned) businesses, one inherent drawback is that it is challenging to boost productivity without scale.

Scale works in several ways, and larger firms simply have more capital. This means they have a bigger buffer to withstand external shocks and more money to invest in research and development, technology, talent and other critical areas.

Larger firms also benefit from economies of scale, as they can spread fixed costs across more units of output. Plenty of business costs have very low or near-zero marginal costs, such as a company-wide software licence, a legal team and a human resources department. For smaller businesses, scaling up (whether by organic growth or mergers and acquisitions) could lead to more available capital, which could spur further increases in productivity and competitiveness.

Critical Investments in Technology

Lacklustre business........

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