Canada, U.S. EC Gap Shrinking

[Toronto, CANADA] Canada made some progress in closing the e-business
gap with the U.S. last year and will close it further through 2004,
but U.S. companies still remain far ahead in the online world.

The findings are part of ongoing research, released today by IBMs
Canadian E-Business Opportunities Roundtable’s E-Business
Acceleration team, led by IBM Canada’s president and chief executive
officer John Wetmore.

The research was conducted by IDC Canada and its U.S.-based parent,
International Data Corp.

IDC projects a compound annual growth rate for the Canadian e-business
sector of 75.5 percent through 2004, compared to 67.9 percent in the U.S.
By 2004, those percentages will represent US $100-billion in e-business
spending in Canada, and $1-trillion in the U.S.

“We’re pleased and encouraged to see the gap narrowing as Canadian
businesses increasingly embrace the digital tools that will keep them
competitive,” said John Wetmore, IBM Canada president and chief
executive officer as well as chair of the E-Business Acceleration
Team.

“But we can’t rest on our laurels. There’s more work to be done to
close a gap that remains too large, especially in the small business
sector.”

A closer look at the research reveals that it’s the
business-to-consumer sector where Canadian firms are gaining the most ground. IDC
is now predicting CAGR of 67.8 percent in the Canadian B2C sector,
compared to 44.1 percent in the U.S.

But most notably, in the business-to-business sector, Canadian growth
remains behind the U.S. through 2004–a CAGR of 67.8 percent compared
to 72.9 percent in the U.S.

“The business-to-business sector represents over 80 percent of all
e-business and will be a driving force in the future,” said Joe Greene,
vice president of IDC Canada. He said small businesses in particular,
are not getting the message that they must learn to conduct business
online if they hope to remain competitive.

The IDC research also indicates that medium and large Canadian
businesses still lag behind their U.S. counterparts in the most basic
components of e-business. The number of medium-sized (100-499)
businesses with Web connections is almost 16 percent lower in Canada
than in the U.S., and the number of large businesses using
sophisticated supply chain management Tools (like extranets) is 10
percent lower in Canada than in the U.S.

More on the Canadian E-Business Opportunities Roundtable’s E-Business
Acceleration team is available at:

• Report Fingers Canadian EC
  Challenges, October 12, 2000
• New Group Working to Stimulate
  Canadian E-Business, March 8, 2000