Accelerating AI and digital technology use among small- and medium-sized enterprises (SMEs) could be the spark that fuels Canada’s next productivity boom, according to a new report.
The Business Development Bank of Canada (BDC) said Wednesday that SME productivity could increase by up to 38 per cent if all businesses reach the same AI and digital maturity as their top-performing peers.
“Digital maturity reflects a business’s overall ability to turn technology, data and processes into performance, while AI maturity refers more specifically to how effectively it embeds and scales AI in day-to-day operations,” the report said.
Over time, BDC estimates that those productivity gains could generate around $350 billion in economic growth and boost Canada’s gross domestic product (GDP) by nearly 14 per cent.
BDC’s analysis found that once company characteristics are taken into account, AI boosts sales per employee by 24 per cent. Canada’s GDP could increase by six per cent if all Canadian SMEs adopted AI, the report said.
“If SMEs start adopting intentional AI and going to the full extent of executing on it, it will increase their productivity, then feed into what the Canadian economy needs right now in terms of bridging that gap,” said Jean-Sébastien Charest, BDC’s chief information officer.
The study is based on a February survey of 1,500 Canadian business owners and decision makers. To measure digital maturity, BDC assigned each company a score out of 100 based on points given for the use of digital technologies, corporate culture, data management and intensity of AI use.
“The higher the digital maturity, the higher the productivity,” the report said. However, only 23 per cent of Canadian companies have a “high” or “very high” digital maturity score.
While 96 per cent of businesses reported investing in digital technologies over the last 12 months, Charest said the maturity gap can feel intimidating. Survey respondents flagged costs, cybersecurity and talent as their top barriers to adopting digital technologies.
“On the cost side, I think that typically technology investments in the past decade resonated with big investment,” Charest said. “And if you tie that back to the fact that they’re not always able to picture what benefits they will get out of it, it’s intimidating.”
The report found that the most productive companies are the ones that use digital technologies to their “full potential,” which Charest said companies can do by identifying operational pain points and establishing where they stand to gain the most benefits.
“It doesn’t come from just the technology,” he said. “It comes around how you are going to rewire your processes and how you’re going to be intentional about changing the way you work today to gain the full benefit of this technology.”
Digital maturity also ties back to economic sovereignty. Charest said more activity in the field will increase adoption and demand for digital technologies among Canadian businesses, leading to more made-in-Canada “core capabilities” being built.
“If we can move the needle on adoption of technology and have more Canadian integration partners, or integrating Canadian technology, this is a win-win for the economy from our standpoint,” he said.
• Email: jswitzer@postmedia.com