08 August 2016
Rarely is business success experienced by a singular big, bold leap. Rather, it is determined by a series of carefully measured steps – each step making money in its own right and adding institutional skills that better prepare the company to take advantage of the next opportunity. Equally important, each step moves the company closer to a broader vision of where the company wishes to be.
The same can be said for New Zealand companies growing abroad: the first step toward growth is successfully servicing the needs of our own domestic market, often followed next by stepping into the Australian market. And here, at the third step, New Zealand exporters are faced with a fork in the road – where do we grow from here?
While all overseas markets offer their own unique challenges and opportunities, New Zealand businesses that have successfully navigated the Australian marketplace may consider Canada as the next logical step.
Canada is a parliamentary democracy with a strong federal government, similar to that of Australia. What is unique about Canada’s system of government is the distinctive power held by the provincial legislatures, which can enact laws and local ordinances specific to the province.
While businesses may have to deal with both federal and provincial regulators, it shouldn’t be a deterrent because, according to Forbes Magazine, Canada is the 7th best country in which to do business in the world. The United States, for comparison, is ranked number 22.
Among the competitive advantages of doing business in Canada:
- Canada’s business costs are almost 15% lower than in the United States
- Canada has the most highly-educated population in the OECD
- Canada has the soundest banking system in the world
- Canada’s strategic location: from Toronto, 60% of the United States’ population is within a two hour flight, and thanks to NAFTA (the North American Free Trade Agreement), access is open to the entire North American market.
Canada is also part of the Trans Pacific Partnership (TPP). When TPP is ratified and comes into force, there will be significant tariff savings.
New Zealand exporters that have decided that Asia is the better route should keep an eye on the growing Canadian-Asian community. This community is the fastest growing demographic in Canada and, according to CIBC’s World Markets report, over the next ten years the majority of consumer spending will come from the Canadian-Asian community.
This demographic shift can be seen in some of Canada’s largest cities like Vancouver, Toronto and Montreal – and Canadian retailers have noticed. Venerable retailers like Loblaws and Sobey’s have opened stores specifically catering to the Canadian-Asian consumer.
So, for New Zealand companies operating successful businesses in Asia, some of those lessons learned in business expansion could be put to work servicing the needs of the Asian community in Canada.
Lastly, for those New Zealand ICT companies with dreams of operating in Silicon Valley or tapping into the venture capital community in New York, there’s one Canadian city that can fit both bills: Toronto.
Toronto is Canada’s largest technology hub and the fourth largest city in North America, with the most fibre optic cable of any North American metropolis. Further, not only is Toronto Canada’s financial powerhouse, it’s second only to New York in terms of North American financial firepower.
And the largest technology companies have noticed. Companies like Google, Samsung and CISCO Systems have already or are currently opening large, billion dollar campuses in the ‘Toronto Innovation Corridor’. With friendly and supportive provincial and municipal government partners offering attractive incentives and tax rebates, and with a shared commitment to growing the ICT sector in Toronto, it may be considered negligent not to consider the Toronto Innovation Corridor in potential North American expansion plans.
In the end, it’s up to New Zealand’s businesses to invest in new technologies, create innovative products, hire world-class talent and make the sales to discerning buyers in far-flung markets.
When it comes to those far-flung markets, think Canada! Canada has a lot more to offer business than just beautiful scenery. Because what you might find in Canada might just benefit your bottom line, and that’s ultimately good for New Zealand too.
This story was originally published in NBR