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Productivity, competitiveness and market opportunities fuel entrepreneurs’ investment decisions

By Sara Bedal |

Canadian business owners are ploughing their investment dollars into three key areas: the purchase of new equipment and machinery, the development of new products and services and the integration of new information and communication technologies (ICT), a recent survey shows.

These priorities will continue to significantly influence their investment decisions in the next two years, they say.

When asked why they had funnelled their finances in these directions in the past 24 months, 47% of respondents said they wanted to improve productivity, 34% wanted to keep up with the competition and 30% wished to take advantage of an opening in the market.

The survey, conducted by the Business Development Bank of Canada (BDC), also showed that entrepreneurs intend to invest more in innovation than they did in the past.

For instance, more business owners plan to develop new products and services in the next 24 months than they did in the last two years (up nine percentage points) and more plan to invest in R&D and expand in foreign markets (up five points each). A higher percentage of Quebec entrepreneurs (26%) plan to invest to expand in foreign markets, while fewer entrepreneurs in the Atlantic provinces (12%) want to invest in R&D.

Companies' purchase of or intention to purchase: Last 24
Next 24
Increase /

Purchase new equipment/machinery 67% 59%

Develop new products/services



Integrate new ICT



Renovate an existing facility



Invest in R&D



Lease new commercial real estate



Expand in foreign markets



Purchase another company



Purchase new commercial real estate



"The competitiveness of Canadian companies depends in large part on productivity improvements and innovativeness," says Jean-René Halde, BDC's President and Chief Executive Officer. "At a time when the economic outlook is gradually improving, it is encouraging to see that our entrepreneurs intend to invest strategically in activities that will help them become more competitive."

Despite the fact that Canadian business owners plan to invest more in innovation and market expansion, many are hindered by financial obstacles.

Fifty-six percent of survey respondents cited insufficient working capital as a major hurdle to investing, while 29% said that securing necessary financing is an obstacle. In particular, many entrepreneurs in Quebec cited access to financing as an obstacle to investing (47%) while only 21% in western Canada mentioned it.

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