The small and medium sized exporters' problems: An empirical analysis of Canadian manufacturers

This paper examines the competitive characteristics of small and medium sized manufacturers from small towns and cities in southern Ontario. The paper is situated within the context of two bodies of theoretical literature. The first is the literature on the dilemmas faced by small and medium sized enterprises (SMEs) in small open economies, especially in an era of trade liberalization. The second body of literature involves the role and nature of SMEs in employment growth, trade and innovation. A particular focus of this study is to understand the relationship between export orientation and innovation performance. The study is based on a survey of SMEs in the Niagara region, a mature industrial region in the periphery of Toronto. Results confirm that successful exporters from these small urban places are also actively involved in both product and process innovation. As a result, competitive advantage is based on both price and non-price based factors. Competitive problems include issues related to scale economies and the rising import competition from US producers in the post FTA and NAFTA period. Successful entrepreneurs from this region are not only pushing forward with innovation, but strive to become leaders within their market segment. Future studies will focus upon: cross-border comparisons of SMEs with regards to the relationship between innovation and export performance; competitive strategies and technical problems; and innovation and export market development efforts in other countries of the Asia-Pacific region.