Twenty years ago, Saskatchewan-based food scientist Mark Pickard had a vision, and a big one, at that: he wanted to find a way to feed the world. Comparing global population and food production growth rates, it seemed apparent to him that crushing shortages could be part of the earth’s future.
Formerly a scientist with the Saskatchewan Wheat Pool (SWP), Pickard had been involved with the development of a pre-cooking system that used infrared light to improve shelf life and reduce preparation time for grains and cereals. But after the SWP abandoned its own attempt to commercialize the technology, Pickard struck out on his own, setting up a company called InfraReady Products Ltd.
Sixteen years later, InfraReady has over 250 products, and counts Malaysia as a significant export market for the company’s lentils and pulses, as well as countries in Asia, Europe and Latin America.
Toronto strategic marketing consultant, Dr. Brynn Winegard, cites InfraReady as one of a dozen case studies in a recently released report on what makes successful exporters, commissioned by the Canadian Agri-food Policy Institute, a federally-funded think tank. While Winegard says that the firms in the study were all in the food sector, the results are applicable more broadly.
In her analysis, successful small- and medium-sized exporters share four broad cultural characteristics:
- The founder or CEO has a clear, and widely-understood goal for the firm which extends beyond profit targets. “It is a very simple idea that is easily communicated inside and outside the organization,” she says, adding that such goals drive innovation.
- Such firms recognize the need to develop unique products or services, but they also engage in a process of “continuous differentiation”—meaning that they are always looking for ways to set themselves apart from their competitors. As Winegard says, these companies demonstrate “a willingness to evolve and change.”
- Successful firms build and nurture high quality working relationships internally as well as with a wide range of external entities, including governments, suppliers, customers and regulators.
- The founders and senior managers of successful exporters are keenly aware of what Winegard refers to as “clear enabling macros conditions” —everything from trade agreements to nuances in foreign markets that may point to export opportunities. Referring to InfraReady, she observes, “Someone there knew that Malaysia imports lentils and may be receptive to buying Canadian products.” Generally, Winegard adds, successful exporters understand the need to be “nimble” enough to adapt to the fluidity of a global marketplace.
While these company traits may be necessary for successful exporters, they may not be sufficient to produce a broad bounce in Canada’s exports. International business expert Walid Hejazi, a professor at the University of Toronto’s Rotman School of Management, points out that there are persistent structural problems in the Canadian economy blocking the sort of export growth that economists expected to accompany the rebounding U.S. economy. One Bank of Canada estimate, reported in the Wall Street Journal last week, suggested the shortfall could be worth between $40 and $50 billion.
Hejazi points to the innovation gap, competition from manufacturing powerhouses such as South Korea, and the hangover from years of a low-valued loonie as factors that explain the lag. Canadian firms invest on average about 50% less, per capita, in information and communications technologies than their U.S. counterparts, and have fallen behind in imports of productivity-enhancing machinery and software.
Those investments, in theory, could boost the appeal of Canadian non-energy exports, which, today, are about two-thirds more expensive than they were in the early 2000s simply because of the rising dollar. “You need to be delivering something of value,” Hejazi says.
In his view, the solution to sluggish exports shouldn’t depend on attempts by the Bank of Canada to reduce the value of the dollar, because such moves represent a disincentive for firms to import new technology and use it to drive innovation. “As Mark Carney said, ‘you can’t depreciate your way to prosperity.’”