16,000 +

research and innovation projects funded

$858M +

invested in the last 10 years

$250M

invested in 2019-20

33,000

researchers in our network

6,000 +

industry partners

117

post-secondary partners

6,000 +

international research internships

1,450 +

professional skills courses

22,000 +

training participants
SMEs drive growth in Canada 
SMEs drive growth in Canada 
Article

 SMEs drive growth in Canada 

Takeaways

  • Small and medium-sized enterprises (SMEs) are a major source of economic growth and job creation for the Canadian economy.
  • Many Canadian SMEs struggle with challenges that hinder their growth, productivity, research and development (R&D), and export capabilities. 
  • Adopting policy initiatives can foster growth for Canadian SMEs in such areas as financing, innovation, international reach, and workforce skills development.

There are roughly 1.15 million SMEs in Canada, and these small, innovative companies are vital in driving the nation’s economic growth. But in order for Canada to remain competitive in the global market, these SMEs need to become sustainable larger companies; in other words, “high-growth firms”  HGFs), which disproportionately drive growth in employment or sales, and are often found in the knowledge, science, and technology sectors. 

The fastest way for SMEs to boost productivity and economic growth is to innovate.

Canadian SMEs have fallen behind foreign counterparts in competitiveness due to several key factors:  

1. Low productivity, resulting from a lack of capital needed to develop and implement efficiency- and productivity-enhancing initiatives (e.g., ICT, labour training, expanded R&D, and the introduction of innovation).  

2. Scope for innovation. Although the fastest way for SMEs to boost productivity and economic growth is to innovate, fewer than one out of four Canadian SMEs invest in research and development (R&D).  

3. Limited export activity. SMEs which successfully become exporters tend to grow faster and invest more than their non-exporting counterparts, but only an estimated 10 percent of Canadian SMEs are exporters.  

Additional barriers to growth for Canadian SMEs include: difficulty attracting and retaining skilled workers; acquiring the financing needed to implement new initiatives; an uncertain market which creates unstable demand; and tax-benefit thresholds for businesses identifying as SMEs which discourage growth.  

It’s important for policy makers to provide support and funding to SMEs through tailored financing, venture capital, consulting services, and sharing loan risk with financial institutions. As well, to provide support that would maximize opportunities for trade and capacity, including:  

  • Programs encouraging SMEs to export and connect with international markets  
  • Business systems that encourage governments to purchase goods and services from high-growth Canadian SMEs  
  • Programs that connect innovation-oriented Canadian SMEs with skilled research talent  

Mitacs can help businesses overcome many of these challenges by leveraging its academic and industry networks to create cost-effective research collaborations, focusing on innovation-oriented Canadian SMEs. This, in turn, allows companies to access skilled university researchers (from Canada and abroad), who can help fuel — and commercialize — the innovation needed to facilitate growth.  

36724
Mitacs logo

Mitacs Team

Mitacs’s website content is created by people throughout our organization, united in their passion for innovation and eager to share their perspectives with others in the innovation ecosystem. 

Mitacs is a national, not-for-profit organization that has designed and delivered research and training programs in Canada for over 20 years. Working with over 100 post-secondary institutions, more than 6,000 companies and not-for-profit organzations, and both federal and provincial governments, we build partnerships that support industrial and social innovation in Canada. 

Organizations we have worked with