Many Canadian small businesses are struggling to adjust as the global economy becomes increasingly dependant on digital technology, according to a new report from Deloitte Canada.

A shortage of digitally-skilled workers, the cost of software, and uncertainty about which technology to adopt are just some of the challenges laid out in the report on “digital equity” from Deloitte’s Future of Canada Centre.

The report, published Tuesday, included results from a survey of Canadian business executives.

It found that leading organizations across all sectors are leveraging new technologies to improve productivity, efficiency and resilience, and it’s becoming increasingly difficult for other businesses to succeed without following suit.

“The ability to participate and succeed in the digital world has become essential for organizations across all sectors… but not all organizations are equipped to seize digital opportunities,” the report said. 


It said that small and medium-sized businesses face disproportionate challenges when it comes to tech adoption, which has only exacerbated the disparity between businesses that do and don’t succeed.

TECH ADOPTION BARRIERS

According to Deloitte’s survey respondents, the cost of new software is the biggest barrier to digital tech adoption, with 67 per cent of business leaders saying the cost of licenses and subscriptions is somewhat or very challenging, with another 25 per cent saying it is a great challenge.

The report added that not only do businesses struggle to afford new technology, but many organizations simply aren’t sure which digital tools are best for them. 

“Faced with an ever-evolving marketplace of technologies, many leaders are struggling to determine which tools are the most useful, the most user-friendly, and offer the best value for money,” it said.

The report said that the challenge is even greater for small and medium-sized businesses, as those organizations often don’t employ people who provide digital tech guidance, and therefore end up investing in solutions that “don’t quite meet their needs or aren’t quite what they paid for.”

DIGITALLY-SKILLED WORKER SHORTAGE

The report also said that the demand for digitally-skilled workers able to operate and maintain new technologies is far greater than the supply in Canada – and that demand is only expected to increase.

Again, the report noted that small and medium-sized businesses are at a particular disadvantage when it comes to attracting the best digitally-skilled talent.

“Larger organizations tend to have more financial and human resources available to support their recruitment and hiring efforts,” the report said. “They are also better positioned to offer competitive compensation packages.”

SKILLS GAP

Organizations are also grappling with a digital skills gap in their existing workforces, the report said.

Less than half of surveyed business leaders said at least three-quarters of their employees had the skills to create and modify content online. And less than a third of business leaders said at least three-quarters of their employees were able to protect digital devices and avoid cybersecurity risks.

Despite the gap, the report noted that many businesses, particularly smaller ones, don’t offer or facilitate digital skills training opportunities for their staff.

In 2021, Canada ranked 25 out of 29 countries for the proportion of businesses that provided training to develop information and communication technologies (ICT) skills for persons not already employed in the sector, according to the report.

“Just 11.3 per cent of businesses with 10 or more employees indicated that they had provided any type of such training for non-ICT specialists compared to the Organisation for Economic Co-operation and Development (OECD) average of 19.5 per cent,” it said.

METHODOLOGY

Deloitte surveyed 804 senior business executives across Canada from Sept. 7 to Oct. 11, 2022. Respondents included executives from both for-profit and not-for-profit organizations of varying sizes and economic sectors, as well as governments, Crown corporations, and other public sector organizations.

The survey explored the current state of digital investment in Canadian organizations, as well as the challenges leaders have faced in the course of adopting new digital technologies.