It’s natural for small- and medium-sized businesses to cut back to the essentials during an economic crisis like the one we’re experiencing right now. Yet SMEs that find a way to innovate and ramp up investment in R&D when their competitors are retreating are more likely to be Canada’s entrepreneurial success stories of the next decade. Some high-potential SMEs will even transform into large companies over the coming years, largely because they recognized and seized the opportunity at a time of uncertainty and fear.
The fear is understandable. The recession caused by the COVID-19 pandemic has been severe. Companies across the country have been struggling. At Mitacs, we see these struggles first-hand through our unique vantage point, working with thousands of companies across the country and in almost every sector. We know that SMEs are most concerned with short-term survival, especially cash flow and paying employees. They’re challenged in managing new remote working arrangements, modifying operations and, in some cases, pivoting to new lines of business.
But the pandemic has also brought new opportunities. Recognizing and seizing them can be business-transforming. To borrow from an old adage for stock investors, when everyone else is selling, you should be buying. For forward-thinking businesses, now is the time to accelerate.
Why and exactly how are good questions, and the answers will be slightly different for every company. Now is the right time for many SMEs to secure new markets and grow. And the means are within reach because of the unusual and temporary availability of top talent and support programs to help businesses make strategic hires.
The talent piece is a crucial part of the equation. Companies building their futures through R&D are in stiff competition to secure the bright young minds that are vital to making their vision a reality. But things are different now. With so many tech firms, start-ups and research firms pulling in their horns because of the pandemic-induced economic decline, offers and opportunities — including planned job placements — have evaporated for many. Nimble SMEs now have access to talent that may have been out of reach in past years. Getting that talent on board now to help enterprises hit the gas and pull ahead of competitors can be transformative.
Some high-potential SMEs have smartly held onto their R&D teams during the pandemic, with help from the federal wage subsidy and other programs. As these supports transition, decline or disappear over the coming year, it’s crucial that companies continue to maintain and invest in these teams in order to maintain their competitive position and achieve their vision for the future.
That doesn’t mean that companies shouldn’t be looking to streamline costs at such a challenging time. The key is to find the right balance. A recent study by Harvard researchers looked at the performance of 4,700 public companies during three recessions. It showed those that find a balance between cutting costs to survive while still investing to grow in the future fare best following an economic downturn.
Our advice is simple. Be the first one out of the gate. Don’t cut your investments in R&D. Doing so will make rebounding that much tougher. Add more innovators. Position your business for growth. Get your hands on some of the top talent coming from our world-class PSE institutions. And leverage these investments to develop or advance new products and services.
We’re here to help. Our 75 business development experts, based across the country from Victoria to St. John’s, can help chart your innovation roadmap, find the right talent to support it and leverage Mitacs funding to augment it.
Eric Bosco is a chief business development officer at Mitacs, a national not-for-profit that powers growth and innovation by solving business challenges with research solutions from the best academic institutions — with the support of federal, provincial, and territorial governments. An entrepreneur and business leader who helps companies grow through research and development, Bosco was founder and CEO of XYZ Imaging prior to joining Mitacs in 2007.