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)

About Andrew
Andrew blogs and tweets public policy issues, particularly the relationship between the political and bureaucratic levels, citizenship and multiculturalism. His latest book, Policy Arrogance or Innocent Bias, recounts his experience as a senior public servant in this area.

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