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Large Canadian companies key to boosting small business growth, researchers say

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Date: November 11, 2015

Large Canadian companies key to boosting small business growth, researchers say

Large companies play an essential role in driving the growth and success of Canada’s small and medium-sized enterprises (SMEs), says a new report from the DEEP Centre, a Waterloo, ON, based economic think tank.

The study, Catalyzing Canadian Growth: Understanding the Role of Large Firms in Helping Small Businesses Succeed, based on data collected from 50 of Canada’s largest businesses, found that such companies often serve as crucial “anchor customers” for smaller firms, on average relying on Canadian SMEs for more than a third of their input purchases.

Collectively, the 50 large companies that took part in the study purchase $37 billion in goods and services annually from 158,550 SMEs across the country.

If the purchasing behaviour of those 50 companies is indicative of the broader population of 350 large Canadian firms (those with at least $1 billion in revenues), the results suggest that large companies in Canada buy more than $260 billion in inputs each year from more than one million SMEs.

At the same time, 90 per cent of the companies in the study identified SMEs as playing an important or very important role in their operations as contributors of new ideas, products, processes and technologies.

The report includes in-depth case studies of innovative mentorship, business development, procurement and innovation-related initiatives spearheaded by some of Canada’s largest companies.   These relationships are mutually beneficial and contribute to Canadian innovation, productivity and competitiveness.

Copies of the report are available here.

 For more information on the project, contact DEEP Centre executive director Dan Herman.

The DEEP Centre conducted the study with the support of the Canadian Council of Chief Executives to better understand the mutually beneficial relationship between large firms and SMEs.

The CEO Council is a not-for-profit, non-partisan organization composed of the chief executives and entrepreneurs of Canada’s leading enterprises.

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