OCTOBER 1993 Edition
SMALL BUSINESS
While big companies are still shedding employees, 48,000
in the first six months of 1993, small companies are taking the lead in hiring
new people, 30,000 more than a year earlier.
In 1991 and 1992, during the worst of the recession,
establishments with 200 or more workers shed almost 200,000 employees gaining
most of the headlines. But their smaller counterparts with fewer that 200 on
the payroll unloaded almost 650,000 people.
Small companies outdistanced their larger counterparts as
job creators in five of the seven boom years between 1983 and 1990. Over the
whole span, they added 1.13 million workers, compared with 850,000 by the
bigger companies.
According to a recent poll, executives of large companies
said they have a conservative or reluctant approach to change and the majority
said that small businesses are generally best equipped to manage change.
According to the survey, the fastest growing areas are cost, pressures,
information technology, government regulations, customer demand, quality
programs, quality and advancement of workers and automation.
WORLD ECONOMIES
Until recently, economies were measured by the
International Monetary Fund (IMF) in terms of the value of the output of goods
and services in U.S.dollars. This made the GNP of a country change every time
there was a shift of currency in relation to the U.S. dollar.
The IMF has now adopted a new and more realistic gauge
which measures the "purchasing-power parity." Rather than GNP being
measured in dollars, a national basket of goods and services encompassing the
likes of transport, food, clothing and shelter is tallied in local currency and
compared with the purchasing power of similar goods and services in other parts
of the world. This method provides a more accurate assessment of the value of
what each person can buy and when multiplied by the population gives an
estimate of national output.
Using this standard, the IMF pegs China's output at $1.7
trillion last year, far above the $400 million used in earlier estimates.
China's per capita income rises from $370 to $1,600 per annum and makes it the
third largest in the world after the U.S. and Japan. India now becomes the 6th
largest economy, displacing Italy and Britain. Canada moves from 7th to 11th,
behind Mexico. This exercise has expanded the developing world's share of
global output from 18 per cent to 34 per cent.
FUNDING
A Toronto management consultant has put together a
database of the myriad government departments and agencies that provide funding
to small business.
David Hearn focuses on outright grants, not tax
incentives, to fund training, research and development and export marketing,
generally for high-technology businesses with 10 to 500 employees. His
FundFinder database summarizes each program and includes information such as
the program's mandate, award levels, eligibility criteria, restrictions and
expected life.
Businesses pay an hourly fee that works out to about 10
to 15 per cent of the grant amount. Hearn will, if requested, handle all the
necessary documents. He can be reached at (416) 763-0091
THE BUREAUCRACY
The number of federal bureaucrats rose by almost 14,000
last fiscal year, a 5.6 per cent growth. And despite salary freezes, the
federal payroll grew by more than $100 million, from $18.9 billion in 1991-92
to a provisional $19 billion for 1992-93. Between January 1991 and February
1992, the number of government employees at all levels increased by 72,000.
U.S. JOB CREATION
European companies with U.S. plants provide more jobs to
American workers than those of all other countries combined. A recent
European-American Chamber of Commerce report shows that 2.9 million Americans
were working in 1990 for the U.S. affiliates of European companies, many in
high-paying manufacturing jobs. A companion Price Waterhouse study shows 4.7
million additional jobs created indirectly by purchases of materials, supplies
and services from U.S. firms by European companies.
IMPORTS
More than 85 per cent of Canada's imports come from the
U.S., Japan and the European Community but imports from the rest of the world
have climbed by 38% since 1988. During
the first half of this year, Canadian purchases from everybody else in the
world was running at an annual rate of more than $23-billion, up 10% over the
previous year. Significantly, almost half of those imports--$10.3-billion, came
from just eight Asian countries. Taiwan, China, South Korea and Hong Kong led
the pack with about $8- billion in sales to Canada. Only China has made big
gains in recent years with sales to Canada in 1992 of $2.5 billion, a rise of
157% since 1988. Hong Kong and South Korea have lost ground while Taiwan's
exports have grown slowly. Others have made solid gains. Singapore, up 38%,
Malaysia, up 85%, Thailand, up 68% and Indonesia, up 120%.
BARLEY
Until August of this year, all sales of barley to the U.S
or other provinces had to go through the Canadian Wheat Board, a federal Crown
agency. In addition, all imports had to be approved by the Wheat Board. In an
attempt to open the Canadian-U.S. border to the free flow of barley, a Cabinet
Order in Council was passed allowing Prairie farmers and grain dealers to
bypass the Board and sign their own deals.
On behalf of three Prairie wheat pools, a Federal Court judge has now
overturned the Order saying that the government exceeded its authority and that
changes to the Wheat Board Act must be approved by Parliament. Thus the battle
lines are drawn between advocates of a free continental market and those who
believe in co-operative marketing through the wheat board. The Government is
appealing the ruling but time is short as the crop will shortly be harvested
and, in good faith, thousands of contracts have already been entered into and
millions of tonnes of barley have been presold.
U.S. JOB TRAINING
A new study shows the number of U.S. workers receiving
formal training this year from their employers surged to a record 44 million,
up 15 per cent. This raise is being funded by a 7 per cent jump in training
dollars to $48 billion from $44 billion last year. The survey polled 2,500 of
131,000 companies with more than 100 employees. A possible reason is all the
talk about job training in the 1992 election. The training includes formal
classroom instruction and well as computer and video-based training, not casual
on-the-job training.
EMPLOYERS
With a 1992 payroll of $7.9-billion, says the Canadian
Bankers Association, the country's banks are a major private-sector employer.
The top five are: hospitals, 566,803 employees; construction industry, 357,659;
banking, 172,776; printing and publishing, 131,166; mines, quarries and oil
wells, 118,341.
WHATCOM COUNTY
According to a new study prepared for the Washington
Tourism Commission, Whatcom County ranks seventh among Washington's 39 counties
in tourist spending having earned $177 million in 1991 on local attractions,
services and accommodations. The new study includes impacts such as spending by
day-visitors. Tourism accounts for 2,200 jobs in Whatcom County, generating a
payroll of nearly $30 million and producing $2.2 million in local tax receipts.
CRISIS-MANAGEMENT
In August, Molson Brewery, Canada's largest brewery
withdrew and inspected 80 million bottles of beer from Quebec bars and store
shelves after a consumer discovered an alkaline cleaning fluid in a bottle.
Only ten tainted bottles turned up, six found by consumers and four by Molson
staff.
Molson, which has about 57 per cent of the Quebec market,
says it is too early to estimate the cost of the operation but early
indications are that the effect on sales has been minimal. Less than an hour
after the news broke, senior executives were fielding reporters' phone calls
and by the next morning an 800 number was operating to answer calls from
consumers and officials made themselves available to all newscasts in the
province. (Only 200 consumers called and half were in the first two days.) For
the next week, daily progress reports were issued and the company took out
newspaper ads to apologize for the incident. (Faulty equipment allowed cleaning
fluid to get in one of the production lines.)
The whole operation was directed by two crisis management
teams, one in Montreal and the other in Toronto. Obviously, the key to success
was the fact that Molson already had a crisis management team in place which
had gone through simulations many times and was ready for a problem of this
magnitude.
U.S. EXPORTERS
The U.S. Commerce Department estimates that 300,000 small
U.S. businesses have exportable products yet only 40,000 currently export. A
survey of small businesses reports that one reason, given by 11 per cent for
failing to begin or expand exports is "lack of information or
know-how." Other reasons are: "lack of time," 8 per cent and
"financing difficulties" and "cost competitiveness," both 5
per cent. The top reason was given by 34 per cent was "no desire to export."
Customs Brokers and Freight Forwarders have been identified as a key source of
support in assisting new exporters.
RETAIL
Vancouver is now one of the most vibrant retail markets
in the country. Tiffany's has just opened a downtown store, the only other one
is in Toronto, and is hoping to attract the Asian market. At the other end of
the scale, Dollar Empire (almost-everything-for-a-dollar) has opened in mid-town Kerrisdale.
Retail sales across the province are running, on average, about 10 per cent
ahead of last year, which also posted a healthy increase. Elsewhere in the
West, Vancouver-based A & B Sound is opening stores in Calgary and
Edmonton. The healthy market is also attracting a stream of new U.S. retailers,
such as Talbot's which markets high-end women's fashions, and the giant Home
Depot and Eagle Hardware.
SIGN OF THE TIMES
A recent Gallup Poll showed that 41 per cent of Canadians
holding full- or part-time jobs believe there is a chance they will become
unemployed. An insurance company has now unveiled a plan which provides that
people in Ontario laid off while buying a house will have their monthly
mortgage payments and taxes--up to a monthly maximum of $2500--covered for
twelve months. The cost of the protection is $4.85 for each $100 of monthly
mortgage payments. According to Statistics Canada data, the average job loss
period as a result of layoff is seven months.
DISCOUNTS
Money-saving coupons for cereals, detergents and soft
drinks are not unusual, but whisky and cognac? It is all part of a scheme by
Quebec's liquor board. Beer and wine are selling well, but sales of hard liquor
have been slowing for the last five years. Recently, the board put a sheet of
discount coupons in Montreal's newspapers offering bargains on 24 of its most
popular, and profitable, brands. The coupons provide a $5.00 discount on
Hennessy Cognac and $1.00 off Schenley whisky.
HIGH-TECH
China wishes to speed up postal delivery and, to this
end, imported $12 million worth of automatic mail sorting equipment from Europe
capable of handling 30,000 letters each hour. However, the machines are choking
on sub-standard Chinese envelopes with more than 60 per cent of letters being
rejected by the machines and many letters having been shredded by mistake. The
ministry of posts and telecommunications has ordered that all envelopes must be
standardized by next April.
Posts
