Understanding the Systemic Barriers to SME Global Expansion in Canada

Canada has long positioned itself as a global trading nation. With over a dozen international trade agreements and extensive institutional support including Global Affairs Canada, the Trade Commissioner Service, Export Development Canada (EDC), and the CanExport grant the infrastructure to help companies expand abroad is extensive. Yet the outcomes remain stagnant.

Fewer than 12% of Canadian SMEs export. Of those, over 85% rely solely on the U.S. market. This overdependence on one trade partner has long been acknowledged, but real diversification remains limited. Programs like CanExport are oversubscribed. Trade services are still largely accessed by firms already predisposed to exporting. And critically, the majority of small and microenterprises, including nonprofits and equity-deserving founders, remain outside the export economy altogether.

The question is no longer whether we have enough programs. The question is whether we’ve built systems that support business readiness.

The Structural Gap Behind the Numbers

While the rhetoric of “scaling global” is strong, the underlying operational systems that make that possible are often missing. When 87% of non-exporting SMEs say their business is "too local," it's not a marketing problem it's a capability gap:

• Limited internal bandwidth to plan, budget, or staff for market entry

• Fragmented or underutilized digital infrastructure

• Low confidence navigating regulatory, compliance, or cross-border logistics

Even firms who want to export frequently stall when attempting to implement export plans. The Trade Commissioner Service notes that it supports 20-25% of active exporters but rarely reaches early-stage or first-time exporters. Similarly, CanExport’s data shows that over 60% of applications are declined annually, not due to poor ideas, but due to eligibility or capacity misalignment.

In parallel, Canada’s ambitious Export Diversification Strategy, launched in 2018, aimed to increase overseas exports by 50% by 2025. Progress has been uneven. In sectors like tech and digital services where intangible exports are rising many SMEs report struggling to engage with programs built around traditional, goods-based export models.

Constraints in the Current Export Enablement Model

1. Awareness and Eligibility Gaps
Most SMEs are unaware of available export programs. Those that are aware often find the application process complex or disqualifying. Minimum revenue thresholds, incorporation requirements, or geographic limitations create high barriers to entry for early-stage ventures and nonprofit actors.

2. Fragmented Support Ecosystem
Export services are spread across federal, provincial, and sector-specific agencies. SMEs without internal export leads or prior experience struggle to navigate this maze. Redundancies exist. Gaps go unaddressed.

3. Measurement Gaps: Outputs Over Outcomes
Programs are often evaluated on reach (e.g. number of firms served, grants issued) rather than results (e.g. new markets entered, revenue increased, sustained capability built). This incentivizes volume over depth.

4. Insufficient First-Time Exporter Support
Current systems cater more effectively to repeat exporters. Firms new to exporting especially those without full-time teams, or those working in emerging sectors often receive generic guidance, not operational support. This results in stalled momentum and program drop-off.

5. Resource and Capacity Limitations
Exporting isn’t just a strategic decision it’s an operational one. Smaller firms lack the systems (CRM alignment, documentation workflows, financial modeling) to handle multi-market expansion. Few programs address this internal buildout.

A Systems-Based Approach to Export Enablement

If export readiness is the goal, then the model must go beyond checklists. It must embed infrastructure:

- Contextual Diagnostics
Structured export readiness diagnostics help SMEs identify internal weaknesses from sales process gaps to compliance issues and benchmark progress. This allows for phased intervention, not one-size-fits-all training.

- Operational Design for Global Markets
Customizing CRMs, adjusting pricing models, and building digital export pathways (e.g. e-commerce, document automation, international payment workflows) enables frictionless scale. Market-specific planning is embedded in day-to-day ops.

- Integrated Digital Stack
Most firms already have digital tools they’re just not aligned to export use. We help teams connect AI-enabled forecasting, customer segmentation, and fulfillment tech into a scalable stack that cuts friction and time.

- Capability Coaching and Team Alignment
Capacity-building isn’t just knowledge. It’s internal process change. From onboarding staff in new markets to adapting sales collateral for regulatory standards, we support cross-functional team adoption.

- Continuous Measurement and Feedback Loops
Outcomes are only improved when they’re measured. We embed export KPIs into CRM dashboards, track funnel performance by market, and build dashboards for program partners to track uptake and impact.

Case for Infrastructure, Not Just Initiatives

Programs like TAP (Trade Accelerator Program) and the Canadian Technology Accelerator have shown that deep interventions work. TAP participants report 23% increases in export revenue in 6 months, and forecast 37% export growth in five years.

The problem is reach. Most federal programs serve a fraction of the 1.2M+ SMEs in Canada. Even fewer reach nonprofits, cooperatives, or early-stage entities with global impact potential.

What’s needed is not more pilots. It’s infrastructure:

• A diagnostic-to-delivery pipeline

• Integrated regional partner delivery

• Real-time feedback on program effectiveness

• Export readiness as a measurable, supported system not a one-time consultation

Launchroot’s Role

Launchroot works alongside government agencies, accelerators, and export ecosystem actors to build operational infrastructure inside SMEs.

We deliver:

• Export readiness diagnostics

• Market-entry enablement playbooks

• CRM and AI integration for export forecasting

• Capacity-building tailored to sector, market, and team size

Our approach isn’t to run a workshop. It’s to make export readiness live inside the business across systems, teams, and processes.

We are not a replacement for existing export services. We are a capacity amplifier.

For Canada’s export ambitions to become real at the SME level, we need more than good intentions. We need implementation design. We need systems.

That’s what Launchroot builds.