Diversifying trade: report shows immigrant export success, with a catch

Good Conference Board study demystifying new Canadian SMEs and their potential for increasing Canadian exports:

For one thing, most of the successful immigrant-owned SMEs are inefficient retail traders that aren’t getting high rates of return.

“It is important to note that the superior growth in the profits of non-U.S. immigrant exporters does not translate into superior rates of return from business operations,” the report says.

These aren’t innovative, knowledge-intensive exporting businesses, and they’re more “likely to compete on the basis of a low-pricing strategy,” it suggests.

The advantages they have, therefore, might not make up for their lack of productivity in the long-term, and their success could be short-lived.

“Some may suggest that recent immigrants may play a more substantial role in export activity if they have a higher participation rate in business start-ups in Canada,” the report says.

“However, the findings in this study suggest that it is not the proliferation of young and small, immigrant-owned export businesses that will substantially advance Canada’s export agenda over the long-term; rather it is the existence of a few medium to large innovative non-U.S. immigrant exporting businesses.”Unfortunately, the report adds, those innovative companies are also much less likely to get bank financing because of their uncertain prospects.

Diversifying trade: report shows immigrant export success, with a catch (pay wall)