To Invest or Not to Invest…It’s Not Even a Question
The debate on whether or not to invest in times of economic uncertainty has been raging in the years since the recent financial crisis. In Canada, the latest budget has revealed the extent to which our government is willing to fund growth projects. Budget 2012 has set aside nearly $500M ($400M via the private sector and $100M via government) for venture capital funding to invest in early-stage risk capital, and to support the creation of large-scale venture capital funds led by the private sector.
In addition, the government recently unveiled its Digital Economy Strategy (digitaleconomy.gc.ca), a multi-faceted effort to position Canada as an innovator, adopter, and user of Information Communication Technologies (ICT). Between various ICT related programs, small-to-medium sized businesses now have access to $280M in government grants and medium-term loans to invest in technology solutions that will increase their productivity and ability to compete on a global scale.
Please excuse us while we jump for joy. This news is exciting for DMS, our partners, and most of all, our clients. Even if you’re relatively happy with your operations, why not take this opportunity to add extra efficiencies while you still can?
With this in mind, we thought it would be worthwhile to explore some of the initiatives the Canadian government is supporting and how they can positively affect your bottom line for years to come.
The primary vehicle for accelerating ICT adoption is the Digital Technology Adoption Pilot Program (DTAPP), an $80 million investment over three years designed to provide nearly 600 small and medium sized enterprises (SMEs) with digital tools to boost productivity.
The primary goals of the DTAPP are:
- Improve the rate of digital technology adoption by SMEs
- Improve understanding of the link between digital technologies and productivity
- Raise awareness of the benefits and importance of adopting these technologies
DTAPP launched in the 2011 fiscal year and has already gained significant momentum. We’ve already worked with DTAPP to fund productivity investments and found that the application process and turnaround time were fairly streamlined, especially given the demand that this program has generated.
Firms interested in adopting digital technology into their operations (i.e., production lines, workflow processes, or supply chain or customer management systems) may be eligible to receive advisory services and/or a financial contribution of up to $99,999 through the pilot program. If your firm is incorporated, has 500 employees or less and is currently seeking opportunities to adopt digital technology, you could be eligible to receive assistance through the DTAPP team.
For more information, see the National Research Council Website
Business Development Bank of Canada
The Business Development Bank of Canada (BDC) announced that it is setting aside $200 million for loans that help entrepreneurs gear up with information and communications technology (ICT).
Both BDC client and non-client companies, including small businesses such as individual or home offices, may apply for a loan from this ICT initiative. BDC will speed up and simplify the processing of these applications. The loans can be used to purchase hardware, software and consulting services.
Entrepreneurs with ICT projects that do not exceed $50,000 must submit their loan applications online at www.bdc.ca. Companies that need more than $50,000 can contact the BDC business centre in their area, apply online or call BDC customer service at 1 877 BDC BANX (232-2269).
The goal of these loans is to provide short to medium term financing that helps SMEs overcome the initial cost of funding productivity investments. These companies have access to BDC representatives who can recommend vendors, discuss financing options, and guide companies through the implementation process.
For more information, see the BDC website.
Why NOW is the Best Time to Invest
If you produce goods, carry inventory, or ship/receive, there are systems available that will help you make any of these processes more efficient. Higher productivity leads to higher margins, which leads to growth for you and your investors. Canadian companies should really leverage their government’s foresight and take advantage of these programs before it’s too late.