November 1997 Edition
INNOVATION
Statscan reports that small- and medium-sized manufacturing firms are less likely to introduce new products and processes than large firms. While over 63% of large firms introduced a new product or process between 1989 and 1991, only 40% of small firms did so. In addition, of those firms that did innovate, smaller firms were less likely to introduce world-first changes and were relatively more likely to introduce Canadian-first innovations. Although innovation occurred somewhat less frequently in small firms, there were 10 times the number of small firms. Therefore, small firms produced a much larger number of innovations in total than did large firms.
HOPEFUL
A survey of 1,400 small and medium sized businesses across North America shows they are pretty optimistic about economic prospects in the next year. Half of both Canadian and U.S. businesses said they expect revenue growth, while a third on each side of the border expect to hire more employees. But Canadian companies rely more heavily on markets and suppliers outside their local areas or provincial borders. Twenty-seven per cent of those surveyed do business globally, compared with 19 per cent of their U.S. counterparts. And 47 per cent do business nationally, compared with 39 per cent in the U.S.
HELP
A new initiative, HorizonsPlus, was launched recently by Industry Canada and the Alliance of Manufacturers & Exporters Canada to increase the number of exporters and to help small businesses build sales abroad. HorizonsPlus matches companies seeking new overseas markets with young graduates who are trained and interested in careers in exporting. A Web site, www.the-alliance.org/horizonsplus, is available for those who need information.
LOCATION
One of the latest trends for franchises is co-branding or cutting costs by sharing premises with a compatible business, says the International Franchise Association. Another way to promote growth is to move into non-traditional locations. For example, postal and package service provider Mail Boxes Etc., whose outlets are usually set up inside drug or grocery stores, has moved into hotels, convention centres, high-rise offices and college campuses to meet market demand.
ETHICS
Because it is voluntary, the federal government endorses but won't require its Crown operations to use a new code of international business practices and ethics drafted by a group of Canadian companies and associations with foreign operations. The government sponsored the discussions among business and human rights groups leading up to the code. Among the code's provisions are promises to: Promote human rights where companies have influence; Refrain from paying bribes; Protect worker health and safety; Shun child labour; Involve local communities in company activities and, Protect the environment.
ART
The art auction market continues to recover from the slump of the early 1990s. During the 1995-96 season, worldwide turnover topped $1.7 billion, the highest 12-month total since the peak of more than $4 billion in 1989-90. The U.S. was the busiest market with sales of $761 million followed by Britain with sales of $501 million.
ECONOMIES
Developing countries will double their share of global Gross Domestic Product, says the World Bank in its annual report, to account for nearly a third of global output by 2020. The big five developing countries, China, India, Brazil, Indonesia and Russia, will grab an even larger chunk of exports, rising from 9% in 1992 to 22% in 2020. In East Asia, the Bank forecasts real GDP growth slowing to 7.6% over the next ten years from 9.2% in 1987-96.
INDUSTRIAL CAPACITY
Industries increased their use of capacity to 84.8% in the second quarter of 1997, just half a percentage point below the most recent peak of 85.3% recorded in the fourth quarter of 1994. This increase marks a full year of steadily rising rates. The upsurge in household spending and strong business investment in plant and equipment were the major contributing factors to increased production and the resulting rise in rates of capacity use in the second quarter. In response, industries in the manufacturing and construction sectors stepped up production. The strength in manufacturing is likely to continue, according to the latest Business Conditions Survey.
PENSION FUNDS
The total value of the world's pension assets grew by 58 per cent, from $5.4 trillion to $8.5 trillion, between 1991 and 1996, according to InterSec, a research company. The firm predicts a similar rise, to $13.5 trillion, by 2001. The fastest growing pension funds have been in Latin America. Last year they were worth $113 billion, almost four times as much as in 1991. Predictably, the U.S. has the largest stock of pension assets with $4.4 trillion-worth in 1996, almost two-thirds of it in private funds.
TRANSIT
Despite the emphasis on taking public transit, Canadians are using it less and less. In 1996, each Canadian took an average of about 46 trips on some form of urban transit, the lowest level since 1970 when the average fell to 43 trips per person. In contrast, Canadians were using mass transit at three times that rate at the end of the Second World War. The popularity of urban transportation plunged rapidly between 1950 and 1970 with the boom in automobiles and the growth of suburbs. It rebounded slightly during the 1980s when the energy crisis, the travel needs of persons without access to a car, and environmental awareness encouraged governments to turn more and more to mass transit.
CASH
A lack of cash in Russia has caused some unusual methods of payment. In January, some Siberian workers were paid off in coffins while workers at another Volgograd factory were paid in bras. A movie theatre in Altai, Siberia, allowed customers to pay two eggs for a ticket and when eggs ran short locally the price of entry was empty bottles. On a larger scale, officials say that in the fuel and energy sectors, only 20 per cent of transactions are settled in money. The balance comes, if at all, in barter. Faced with companies protesting a lack of cash to pay taxes, local governments are allowing factories to settle their debts with cans of paint and newly-assembled trucks.
WORTH
The average Canadian's worth advanced $2,100 in 1996, as national net worth rose almost 4% to $2.6 trillion. This was the combined result of an increase in national wealth and a small decline in Canada's net foreign indebtedness: what we owe to non-residents less what they owe to us. Net worth grew at a slightly faster pace than the previous year, reflecting the strength in domestic economic activity and the slowing in debt accumulation.
URBANIZATION
The World Watch Institute says that land use for grain production totalled 0.3 acres a person last year, down from 0.57 in 1950. The spread of roads, buildings and industrial parks eats up some of the most productive remaining land. At least 5 per cent of China's cropland was lost between 1950-1992 due in part to urban expansion and industrialization.
POLAND
Opportunities exist for Canadian environmental companies looking for new clients and potential partners in this dynamic market. Poland is a large environmental market given its high level of municipal and industrial pollution. Last year's spending in this sector exceeded US$1 billion. By the year 2000, Poland plans to spend over US$6 billion in order to meet European Union environmental standards.
SECURITY
New technology that identifies people using the eye is being developed for use with automated teller machines and for other electronic transactions. As a person walks up to an ATM, three standard video cameras zoom in. First they identify the approaching form as a person. From almost a metre away, they take an image of a person's eye and match the iris with an image already digitally encoded and kept in an electronic file. The system works even when the customer is wearing glasses, sunglasses or contact lenses and in many cases where the person is blind. There is no way to copy someone else's iris pattern using a contact lens.
CABLE
The Canadian cable television industry reported revenues of $2.7 billion in 1996, up 5.8 per cent over 1995. Total revenue from basic cable television operations increased by 3.1 per cent to $1.9 billion from $1.85 billion. Revenue from discretionary and other services advanced by 13 per cent to $775 million from $686 million. There were 7.9 million subscribers (direct and indirect) in 1996, 74 per cent of which subscribed to discretionary services compared with 71 per cent in 1995.
HONG KONG
Hong Kong's chief executive pledged to spend $11.4 billion (U.S.) over the next five years improving housing, infrastructure and services in the former British colony, now part of China. Also announced is a plan to build a science park.
SERVICE
A study of 10,000 Canadians by the National Quality Institute, funded by Industry Canada, reports that pharmacies are best and the government worst when it comes to customer service. Pharmacies received a 93 per cent customer service approval rating while the government got 40 per cent. Telephone companies, trust companies and credit unions were ranked as the most improved.
EL NINO
The warming effect of El Nino in the South Pacific could help business and consumers in Canada shave more than nine per cent off their gas bills this winter. In 1982-83 when the last El Nino occurred, gas prices fell 13.75 per cent from a year earlier. El Nino is a mass of warm water the size of Europe which usually remains in the Pacific but trade winds can change the current and the world's weather patterns.
PROGRESS
According to the New Scientist, a new digital video disk that self-destructs after two days could end the trek back to the video store to return videos. A U.S. consortium wants to replace the familiar videotape with its limited-life disks which would cost about $5. Because of movie industry fears about piracy, films would be scrambled and a special code needed to access them.
PEACE
Technical engineers at Chiltern Railways in Britain have developed a train window covered in metallic microfilm that mobile-phone signals cannot penetrate. The aim is to offer commuters "no-phoning" rail cars, similar to "non-smoking" cars.
TECHNOLOGY
After years of planning, a "virtual record shop" will open shortly in London. The promoters claim Cerberus will eventually be able to stock every piece of music ever made. If the plan succeeds, music lovers will no longer need to buy albums. If they have computers, they will simply download songs; if they don't, they will visit computerized kiosks to choose their own compilations, which will be pressed into CDs while they wait.
GAMES
To stop American public servants playing at work, Congress is considering legislation to outlaw games on computers used by federal agencies.
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