MONTRÉAL, Que.–According to the Global Dynamism Index (GDI), a global study by the Economist Intelligence Unit for Grant Thornton, Canada ranks 9th among the 60 largest economies in the world based on 22 indicators across five growth areas: business operating environment, technology, labour market, market growth and financing environment.
Canada ranks first for its business operating environment, which considers key indicators such as foreign trade and exchange regimes and controls and policy towards private enterprise and competition. According to Jean-Daniel Brisson, Lead Senior Manager in Raymond Chabot Grant Thornton Strategy and Performance Consulting Group, “Our wealth creators benefit from clearly defined and sound domestic and international trade policies, which allows them to operate in a stable, predictable environment, compared to places with more volatile environments, such as Venezuela, Kenya and Algeria, at the bottom of the ranking.”
However, Canada needs to work on promoting itself as a choice business destination that supports the growth of foreign companies.
“We’ve still got work to do to attract foreign investors. While our business environment may be very good, we have to be able to sell it internationally to attract capital and businesses,” Brisson added.
We also need to improve in technology, where Canada ranks 20th. “In today’s business environment, you have to do more than just cut costs to stay competitive. Our businesses need to increase their R&D investments. We lag behind our neighbours to the south in this regard,” Brisson continued.
Singapore tops the index
Globally, Singapore, Israel, Australia have beaten global competition to top this Grant Thornton GDI. These countries offer dynamic businesses the right mix of regulatory stability, a strong labour market, technological infrastructure, growth opportunities and access to finance.
The GDI can be used as a tool to help identify countries of interest by drawing on indicators weighted according to the importance attached to them by real business leaders, adding that vital human perspective.
Perception versus reality
However, further analysis of the results suggests business leaders may not be fully aware of the drivers and challenges of operating in different markets. Comparing the reality of the GDI with the perceptions of business leaders from the Grant Thornton International Business Report (IBR) indicates some interesting knowledge gaps.
“A lack of familiarity with a particular territory or region can skew perception and lead to unexpected challenges when expanding into a new market. For dynamic businesses, the trick is balancing instinct with reason, perception with reality,” said Paul Raleigh, global leader – growth and advisory services at Grant Thornton International.
“This study reveals how looking behind the headlines can uncover unexploited opportunities for dynamic businesses in new markets. The business world is always changing, with the realities on the ground often surprising business leaders who take a closer look. In order to maximise growth potential, business leaders need to refresh their perceptions of foreign markets in line with the market insights at their disposal.”