When we think of ‘frontier firms’ we often think of large companies that have offices and warehouses all over the world, globally positioned to grab opportunity in any market.
The Organization for Economic Cooperation and Development (OECD) defines a ‘frontier firm’ as “[a] firm at the global productivity frontier – defined as the most productive firms in each two-digit industry (a standard classification system for classifying industries) across 23 countries…typically larger, more profitable, younger and more likely to patent and be part of a multinational group than other firms.”
Typical frontier firms have an annual productivity growth rate of three per cent annually – three times higher than Canada’s recent annual productivity growth rates.1 Research also shows that firms at the ‘global productivity frontier’ are, on average, four to five times more productive than non-frontier firms.
What can your small business or startup take away from the success of frontier firms to build and scale without growing into a multinational?
At CEDEC Small Business Support we consider that the following key components of frontier firms can be critical to the success of building and growing your business. Whether you want to go global or stay local, here’s how you can find opportunity in your backyard:
leading-edge management approach means keeping a sharp eye on market research and analysis and using that to feed a strategic marketing approach. It also means looking for ways to innovatively address challenges both within the internal management and production processes of your business as well as figuring out ways to unleash the potential of your business in the marketplace.
Big or small, your business can draw on available banks of knowledge and technology geared towards your sector to catch up to leaders. Through careful and targeted online searches, networking events, mentors, skills updates, and a growth mindset you can access valuable research and connections to help move your business forward.
Application of emerging technologies
The productivity potential of technology can be immense in terms of return on investment. Staying up-to-date on emerging technologies in your industry is key to finding solutions that can help you save time and money and bolster your bottom line. With a healthy financial status your business will be well-positioned to head towards any frontier it wants to explore.
Acquisition of quality human capital
Human capital is defined as “the skills, knowledge, and experience possessed by an individual or population, viewed in terms of their value or cost to an organization or country.” If you want your business to flourish, be intentional about choosing members of your team. Find people who complement your skills as well as those that fill in any gaps you may have. Choose people who are passionate about what your company represents and who will throw all their resources, skills, and tools on the table to ensure success.
Building skills of employees
In order to capitalize on emerging technologies, your workforce should be well-equipped with relevant skills. Research shows that the skills gap has not yet been closed. Businesses that remain aware of what gaps need to be filled, and who work closely with public, private and civil society organizations to ensure the skills their businesses require remain a priority, will gain a larger share in productivity.
The frontiers of your business are wherever you want to go. If going global is your dream, go for it. If growing within your community to offer valuable work and products or services that meet a critical demand is your objective, the frontier is open for exploration!
Are you considering taking your business to the global frontier? Join CEDEC Small Business Support at the Canadian Export Challenge! As a proud co-host of the Ottawa and Montreal events, we’ll be on-site at both locations and eager to show you how your business can scale. For more information: https://cedec.ca/events.