Canada’s tech sector is driving growth across the economy, with one in three (30%) small and medium-sized businesses planning to invest in software in the next 12 months, said a new BDC study released.
Entitled Tech Industry Outlook: What’s Next for the Technology Sector in Canada, the tech sector is a key pillar of Canada’s economy, driving growth across sectors and helping make other industries more productive. Products and services from the tech sector will fuel much of the innovation and productivity that will power economic growth in the next decades. Over the next 12 months, 52% of Canadian businesses plan to buy intangible assets, such as software, intellectual property (IP) protection, R&D and marketing and employee training.
“With a robust financing ecosystem, one of the world’s most highly educated workforces and a wealth of passionate entrepreneurs, Canada’s tech businesses are well-positioned to capitalise on these opportunities,” said Pierre Cléroux, BDC’s Vice President, Research and Chief Economist.
Mergers and acquisitions (M&As) have rebounded quickly following the waves of the pandemic, especially in the tech sector where deal-making has been happening at a record pace since the beginning of the year. The main reason for purchasing a business (70%) is to acquire technology and intellectual property (IP).
“Tech companies that have made acquisitions in the previous 10 years are three times more likely than their peers to have experienced annual sales growth of 5% or more over the past year,” added Cléroux.
Along with a growing need for skilled workers, the study notes three key trends to watch for:
- A booming market for mergers and acquisitions
- A focus on cybersecurity to secure online contracts and data
- Transitioning to a ‘X-as-a-Service’ model (XaaS), delivering technology products and tools as services to users over the Internet
BDC’s Tech outlook provides insights into the industry’s prospects for 2022 and addresses how to navigate a rapidly changing environment. Entrepreneurs can find advice on how to effectively complete a tech acquisition, alleviate the ongoing labour shortage, obtain their security certification, or implement a disruptive business model for high growth.
