For the third year in a row, the Lazaridis Institute for the Management of Technology Enterprises at Wilfrid Laurier University studied how Canadian Technology Firms expand.
Companies that participated in this year’s study saw 117 per cent growth in their average sales revenue with reaching out to global markets one of the key factors behind that growth.
“When you consider that the most commonly used definition of ‘high growth’ is 20 per cent, our firms show an astounding level of performance,” said Lazaridis Institute Research Director Nicole Coviello.
Coviello says the companies looked south of the border first, reaching out to numerous other areas as well including the UK, Australia, Singapore, Spain and South Africa.
“Considering that 85 per cent of the participating firms generate revenue from outside of Canada, it seems clear that growth means going international” said Coviello. “What happens when we are dealing with technology companies is that they have what we call a niche product, so there is not going to be a lot of costumers in Canada that have a need for it, it’s a very particular type of customer that is going to want that technology, but that customer is all over the world.”
She wasn’t able to share what companies were involved in the study but said about 43% of the businesses were based in Ontario with many of those being located right here in Waterloo Region.
Although expanding globally was found to be a major factor in growth, Coviello says there is something else to consider.
“One of things that we have found consistently is the importance of how you invest and what you invest in terms of your marketing efforts and your selling efforts. And there is a third piece to that puzzle, and that is the investment in R&D (research and development) and typically technology firms focus on their R&D…however, it’s marketing spend and sales spend that contribute to growth, not R&D spend and that is based on this data.”
Coviello says they are planning on changing it up next year considering they have had very consistent results over the past three years.
A full breakdown of the study can be found here.