Are Canada’s mid-sized companies a dying breed?
Tavia Grant The Globe and Mail Feb.13 2013, 6:00 Feb.13 2013, 7:18 AM EST
日志
Smart German created a economic model for Canadian to follow
||
74 reads in Dec. 14, 2018
Smart German created a economic model for Canadian to follow
An inspiration for Canada, German trade surplus hits new record in July 2014.
Frank Nov. 4, 2014, in Waterloo, Ontario, Canada
This is a manmade troubling world, whether the government officials or the ordinary people are mostly in the state of deep concern with less sense of security.
August 12, 2014, the article Finance Minister Joe Oliver warns global tensions threaten Canada’s growth said with that:
"Finance Minister Joe Oliver acknowledges that the Canadian economy is facing a challenging future, one that could see a fragile global recovery and geo-political risks hampering growth in employment and exports." "the world’s two biggest economies — the United States and China — have struggled recently and that geo-political concerns in the Middle East and parts of Eastern Europe could threaten global trade at a time when Canada needs to grow its exports."
The reality is just as that of Financial Minister said, however, the facts show that the result of the impact on national economies is not to be determined with great variables. Its good or bad depends on the policy-making, wise or not.
2008 financial crisis and the European sovereign debt crisis caused economic recession and great manyofficials complain that downturn of world economy drags down their national economy, but, the economy of Germany has been in better developing with creation of a new record in both employment and economy to outshine others.
Sep 8, 2014, there was a report that Germany's Trade Surplus and Exports Reach All-Time Highs in July 2014.
The achievement of great Germans lessons us with that, the objective economic environment are not the main cause of the economic downturn at all. The key is that the government how to wisely play own governing role to promote the well play of the internal potential.
Here I must declare that I am not trying to criticize Mr. Joe Oliver at all, instead of, I am deeply worried about his health condition, as rare rational politician of Canada, he has been under the psychological prssure from the huge burden of the hard budget balancing.
I think that there no one would be as that of him in well understanding Canada's downturn economic situation, the energy market is in shrinking, the businesses are in declining, and those mean that the revenue of the government of Canada is in reducing.
If you Google the Images with the key words of Joe Oliver, you may get a lot of returns, the vast majority of them are the photos of current Financial Minister of Canada - Joe Oliver, and the vast majority of his facial expressions have showed deep anxiety with few in happy.
Canada and Germany are both the countries of relatively affluence. However, the ways for getting the affluence are fundamentally different.
According to the Key Facts and Figures on the Natural Resources Sector of the Natural Resources Canada: “Canada is blessed with a vast incredible wealth of natural resources, which contributes significantly to our national economy. Resource industries play a critical role in delivering jobs, growth and prosperity for Canadians.”
According to the Encyclopedia Britannica of the Resources and power of Germany: "Germany has relatively few domestic natural resources, imports most of its raw materials." "Oil is Germany’s principal source of energy. As domestic production is quite limited, most crude oil is imported. Many petroleum products also are imported."
From above, we may understand that, the affluence of Canada is mainly depended on the vast incredible wealth of natural resources. However, the affluence of Germany can not depend on the relatively few domestic natural resources, obviously, it must be depended on the hard work to continuously manufacturepopular products.
This is exactly what is inadequate of Canada.
Feb. 13, 2013, the Business Development Bank of Canada (BDC) issued the survey report that Canada's mid-sized firms have declined by 17% — from 9,370 to 7,814 — from 2006 to 2010, in which, the manufacturing sector reduced more than half, from 2,807 to 1,381 between 2001 and 2010.
BDC also undertook the first-ever Canadian study on the use of advisory boards by small and medium sized enterprises (SMEs) and quantitatively demonstrates that SMEs that use advisory boards have superior growth and better financial results.
There 6% of Canadian SMEs have access to an advisory board that helps them manage their business. 86% of respondents who have benefited from the advice of their advisory board believe it has had a significant impact on their company. Canadian SMEs with advisory boards perform better financially than those without advisory boards.
The study of BDC provides a statistical evidence that mismanagement is a major cause of business decline, and follow is a direct evidence.
March 13, 2013, the Canadian Manufacturing Online published the report of <Power play>, said that 3M Canada saves Energy 30% by ISO50001.
The achievement was great, but the process was unexpected simple: “We try to treat the plant as we would our homes. If we leave a room, we turn off the lights and shut down equipment when it’s not being used. ”
Why they could not treat the plant as that of in own homes to turn off the lights and shut down the equipment when it’s not being used before the implementation of ISO50001 standards?
The achievement of energy saving is also reflecting the CHAOS in the management of 3M Canada and it is common in great many Canadian enterprises. It provides us a useful inspiration for improving our corporate management.
If we can improve our enterprise management, to create competitive products, naturallythere is a market even in the time of the market downturn. Canada will also be able to create new record of trade surplus as same as that of Germany.
Now, please take a look at the rational and smart of Germans, they go the way that they believed right, and never blindly follow others.
Nov. 4, 2014, I read some reports that German trade surplus hits new record in July 2014, I think of my Feb. 16, 2014 article Why German Economy Can Fly Against Economic Recession, in which I introduced that how Germans well play their internal potential and feb. 23, 2014 I added comments in the start of the article as follow:
"In the morning, Feb. 16, 2014, I happily read the article <Olkswagen's US workers vote against joining union>, and produce a feeling that smart Germans civilize Americans to stop their semi-civilized behavior of chiseling holes on own lifeboat."
"I am too excited and think of a lot about the wisdoms of Germans with strong desire to speak out."
"Germany may be one of the few rich countries relying on the hard working rather than that of natural resources, which has attracted great many people to explore the secrets. However, most of them have focused on the macro policy with ignoring the micro details."
"Here, I am trying to dig some trivia that is often to be unseen or to be seen but to be treated as not worth to mention. I believed that those are easily despised or neglected by others, are just precisely the most important. They are the true reasons or may be called as DNA that Germany has been success outstanding."
I excerpt some paragraphs of the article as follow, please compare with Germany, what are the shortcomings that drag the economy of Canada?
And also, I am sure that, after reading what I have introduced, you would understand that, why, when great many people complaining that world economic downturn drags down their national economy, the German economy was able to outshine others.
In Germany, there also similar organization - Works council as that of Labor Union in North America, but, the initial purpose and actual effect has essentially different. In Germany, it is mainly for promoting workers to participate in management of the companies they work for, ans helping full exertion of workers' intelligence.
Recent years, in Canada, there more and more businesses are failed. The most of failures have the fatal impact of the Labor Union or the impact of the workers' ideological from Union's Culture.
Besides the rational of German Labor Union, there is still a more significant method that has been widely using in German enterprises.
In May 28, 2012, I on
The idea was initiated as earlier as 1872 by Mr. Friedrich Alfred Krupp who was the owner of Germansteel manufacturer of the company Krupp. Now, in all German businesses, their staff can use computer network systems to easily submit or query their rationalization proposals.
In the last century, after the U.S. President Roosevelt successfully saved the Great Depression by the means of the government intervene in the economy, the most of countries take Keynesian theory, such as,Fiscal Deficit, as the magic to sitimulate their economy. Now, most of them are debt-ridden, and some of them become losers with bared buttocks and broken spine.
However, at that time, rational Germans did not silly go with the flow. May be that they have foreseen that Keynesian Fiscal Deficit is the economic heroin with instant excitement, but long-term fatal. So, they adopts own Freiburg School neoliberal theory that can sustain for long-term stable development.
Now, nearly 80 years practice have shown that the choice of Germans are smart prescient.
In 2013, German job market has created a miracle in the history of the Federal Republic while the unemployment rate continued to rise to the record levels in the neighboring countries.
This success thanks in part to government launched Schroeder labor market reform so-called "Agenda 2010" in 10 years ago, in which, the key is to create low-income working class with withdrawal of the job market regulation to increase the flexibility for creating more jobs. of course, it promotes the emergence of a lot of low income work.
Robert Bosch who was the German industrialist, engineer and inventor. He has found the Robert Bosch GmbH in 1886. His philosophy is that: we should all strive to improve current situation.
As that of general popular practice of business operation world widely, in 1930s Robert Bosch GmbH once had listed and gave the stock to the management team. After a while, Mr. Robert Bosch found the top mangers changed their habit and attitude, they went to lazy and not work as hard as before. The dividend income encouraged them paying attention on enjoying life. So Mr. Robert Bosch changed his mind to have bought back the stock and delisted
Mr. Robert Bosch also summarized other bad effects as listed Company.
1. Loss of autonomic power in decision-making.
2. Loss of autonomic power in financing.
3. The pursuit of the stock market value will be made fall into a short-term behavior in business running, to affect long-term development investment.
4. Listed Company can not keep excellent CEO, they may be ousted due to poor short-term profit caused by focusing long term investment. Some prospective researches may need long time to reach practical results, such as, 5 years, 10 years, even more.
The workers in Robert Bosch GmbH belong to the Metal Union, the salary is highest in the Germany compared with other industry or Unions. The wages of the Board members lower two salary grades than that of the workers.
I think that, besides Germans, for any people in any countries, the wages of the Board members lower than that of their workers is incredible, not mention that even lower two salary grades.
In my memory, German Chancellor Angela Merkel is the first Head of State to criticize the unreasonable high payments of the corporate executives.
And more.
...........
There nothing is doomed, a rational effort is the decisive factor. With proper effort, Canadians can achieve anything.
Following are some of my writings that may provide feasible solutions for improving the development of the economy of Canada.
Management is the Art of Playing Human Nature
The Fatal DNA of RIM & Canadian Enterprises
The DNA of the Success of IBM & America's best-run companies
The solution for Canada enjoying global free trade quickly with self-protection
Asean RCEP free trade negotiations against TPP talks
A Inspiration for Canada, that China, Japan and South Korea Starts Free Trade Talks in Beijing
Over-heated real estate market is ruining Canadian economy from Japan mirroring Canada - 1
Canadians' living space is being destroyed by the Overeating Politicians
Following are some reprinted articles:
The manufacturing sector has been hardest hit by a phenomenon that is leading to the disappearance of mid-sized companies in Canada.
The number of companies that employ between 100 and 499 workers has plunged 17 per cent between 2006 and 2010, and most of that evaporation has occurred in Ontario.
Most mid-size dwindled into small-size ones in recent years, rather than growing into large-scale ones, a Business Development Bank of Canada study to be released Wednesday shows. The agency says it is the first such detailed study on the state of mid-sized firms in Canada.
Mid-sized companies are a crucial driver of the economy because they are a key source of innovation, research and development and exporting clout. While medium firms comprise just 1 per cent of the total number of companies in Canada, they punch above their weight, accounting for almost one in six jobs in the country and 12 per of economic activity. Their disappearance suggests many are struggling in an era of heated competition, a strong currency and choppy demand.
That so many are shrinking is “huge,” BDC chief economist Pierre Cléroux said in an interview.
“That means they are losing this critical mass that is so important to be able to invest and export and do research.”
All told, the number of mid-sized companies fell to 7,814 firms in 2010 from 9,370 four years earlier. While a few grew into large companies, most got smaller. On average, 14 per cent of medium firms became small companies or (less commonly) closed down per year in the period, while just 1.4 per cent turned into large corporations.
Perhaps the most troubling area is the implication for exports.
Canada is in urgent need of diversifying its export base away from the United States and toward more fast-growing economies like China and India. It is steadily losing ground: In the past decade, losing 40 per cent of its world’s export market share while China has gained 175 per cent, according to the IMF.
That’s not the case for all higher-cost advanced economies. Germany has lost just 5 per cent in the past 10 years, showing “it is possible to still compete at the world level if you are a development country,” Mr. Cléroux said, citing the “Mittelstand” (Germany’s mid-sized business sector) as an example that has seen companies become world leaders in their niche.
He has several suggestions to bolster support of mid-sized companies: ensure they have better access to financing (which tends to be geared to either the large or small ends of the spectrum) and bolster on-the-ground government support in emerging economies to help firms navigate new overseas markets.
The crux of the problem seems to be in manufacturing. In the past decade for which there is data, the number of mid-sized factories plunged by half. And the bulk of the slide in mid-sized firms was in Ontario – indicating many are having tough times coping with a strong currency and growing competition.
In Ontario alone, the number of mid-sized firms plunged by 25 per cent between 2006 and 2010.
The paper is compiled from two sources: data from Statistics Canada’s economic analysis division and a survey of 301 executives who lead mid-sized firms. Most research and statistics about the sector tend to lump small and medium companies into one category, making it hard to assess trends of just mid-sized ones.
The survey asked execs what is stopping their companies from becoming large-size firms. The top reasons where lack of financing, stiff competition and retaining and attracting staff.
Germany’s Trade Surplus and Exports Reach All-Time Highs
http://blogs.wsj.com/economics/2014/09/30/germany-replaces-china-as-worlds-trade-surplus-boogeyman/
By Alessandro Speciale Sep 8, 2014 4:06 AM ET
German exports rose above 100 billion euros ($129 billion) for the first time in July and the trade surplusclimbed to an all-time high, even as escalating sanctions against Russia threatened trade flows.
Exports (GRBTEXMM) gained the most in more than two years, climbing 4.7 percent from June to 101 billion euros, data from the Federal Statistics Office in Wiesbaden showed today. The trade gap widened to 23.4 billion euros from 16.6 billion euros.
“The German economy had a very positive start into the third quarter,” said Johannes Gareis, an economist at Natixis in Frankfurt. “Although it is early days, the data suggest that Germany will re-fire up its engine in the third quarter and will be able to avert a technical recession.”
Germany is striving for a return to growth after its economy shrank in the three months through June. At the same time, the country has faced criticism in Europe and the U.S. that its trade and current account surpluses slow the global recovery by depressing local production elsewhere.
Imports (GRBTIMMM) slid 1.8 percent in July, today’s report showed. The current account surplus widened to 21.7 billion euros from 17.2 billion euros. German factory orders and industrial production expanded more than expected in July, data showed last week. .
Germany Replaces China as World’s Trade-Surplus Boogeyman
China’s devalued exchange rate has made it a pariah of U.S.-based manufacturing and a beloved target of countless U.S. political diatribes and bills seeking to censure Beijing for its currency policy.
But it is key U.S. ally Germany that’s sapping growth from the global economy, according to the latest tally of trade surpluses by the International Monetary Fund.
Germany has replaced China as the largest surplus economy in the world.
Fostering growth where exports far outweigh imports means that expansion comes at the expense of other economies. Instead of encouraging German domestic consumers to boost growth in its weaker eurozone members, for example, Berlin’s economic policies have hindered Europe’s recovery, the IMF and U.S. officials have repeatedly warned.
Concern over global trade imbalances is why finance leaders from the world’s top economies have vowed not to use their exchange rates to gain a competitive advantage over other countries. (Though without aglobal currency cop, there’s little to stop tit-for-tat currency depreciations across the world.)
That’s why the U.S. took Germany to task late last year in its semiannual currency report, and is why Berlin is likely to be targeted in the next review due out in a few weeks.
Under pressure from the U.S., China has appreciated its currency by around 30% since 2006, not including inflation. Although the IMF says China’s yuan is still between 5%-10% undervalued, it estimates the euro to be up to 15% undervalued for Germany’s economy.
It’s not just Europe’s problem, however. Worth $18.5 trillion, Europe’s collective economy is the largest in the world. The regional recession and the potential for a triple dip back into economic contraction still on the horizon are putting the brakes on global growth.
As the IMF plans to revise down its outlook for the global economy next week at a gathering of top finance officials from around the world, Germany is likely to come under pressure to do more to fuel domestic growth, and in turn, help the European and global economies rev up.
Germany Balance of Trade 1950-2014
Da
Germany recorded a trade surplus of 23400 EUR Million in July of 2014. Balance of Trade in Germany averaged 4299.73 EUR Million from 1950 until 2014, reaching an all time high of 23400 EUR Million in July of 2014 and a record low of -535.91 EUR Million in April of 1991. Balance of Trade in Germany is reported by the Federal Statistical Office.
| Actual | Previous | Highest | Lowest | Dates | Unit | Frequency | |
|---|---|---|---|---|---|---|---|
| 23400.00 | 16600.00 | 23400.00 | -535.91 | 1950 - 2014 | EUR Million | Monthly |
Germany runs regular trade surpluses primarily due to its strong export of cars and other machinery. Germany also exports chemical products, hardware, electronic equipment, metals and pharmaceuticals. Germany main imports are electronic devices, fuel, vehicle parts and metals. Main trading partners are France, Netherlands, United States and Italy. This page provides - Germany Balance of Trade - actual values, historical data, forecast, chart, statistics, economic calendar and news. Content for - Germany Balance of Trade - was last refreshed on Saturday, October 4, 2014.
