The Globe and Mail, Tuesday, January 30, 2001
Virtual trade missions break down borders
Cyberspace trips are cheap, effective way for smaller firms to find new markets
By Ann Kerr
The little town of Port Perry, Ont., population 13,000, about 100 kilometres east of Toronto, makes an unlikely headquarters for an accounting firm with global aspirations.
But by making on-line contacts through an emerging Internet-age forum -- virtual trade missions -- Betty Penny, owner of Penny & Associates Inc., Web-based accounting-management consultants, has been able to crack the Asian market and make further inroads into the United States.
In 1998, Ms. Penny was one of 34 Canadian women business owners who logged on to a Web site especially designed to link them with women who owned businesses in Malaysia and Singapore.
Through the contacts she made, she set the groundwork for a contract with Integral Solutions (Asia) Pte Ltd., in Singapore.
This fall, Ms. Penny participated in a virtual mission to Atlanta involving 40 Canadian and U.S. companies owned by women. She recently signed a contract with Genser International Consulting and a letter of intent with Prime Time Marketing Consultants to work on joint projects. Altogether, more than 20 letters of intent to pursue business interests were signed by the participants.
"This has opened up so many new doors. It's a great forum for networking, and I've received referrals from people in the U.S. and Asia that have connected me with others I wouldn't otherwise meet. I definitely can see more business opportunities developing," Ms. Penny says.
Virtual trade missions are a growing means of using the Internet and videoconferencing to break down the borders in international trade. They can be a cheap and effective way to educate companies, particularly small and medium enterprises (SMEs) about foreign markets and introduce them to potential trading partners.
The average cost of a one-week trip abroad to suss out potential business runs $5,000 to $10,000 a person. In some cases, multiple trips are needed before a deal is completed.
"There's no way I could have afforded the time or money to be travelling back and forth overseas," says Ms. Penny, who has been in business for six years and has a basic staff of 12 people. She did make a trip to Singapore when it came time to complete the deal.
These long distance get-togethers take place on a specially designated Web site set up 24 hours a day, seven days a week, where participants can exchange company and contact information, gain market knowledge from trade experts and view products. Some virtual missions also include videoconferencing at designated sites.
Generally, government departments at home and abroad, business associations and corporate sponsors organize the events and foot much of the bill. Firms are charged about $50 to $100 to participate in a virtual trade mission.
The Atlanta mission involved the U.S. Small Business Administration, the U.S. Department of Commerce, the Canadian consul-general in Atlanta, Industry Canada, the federal Department of Foreign Affairs and International Trade and sponsors such as Kodak Canada Inc. of Toronto or Eastman Kodak Co. of Rochester, N.Y., Delta Air Lines Inc. of Atlanta and Royal Bank of Canada,which has been involved in a number of regular and virtual missions encouraging women to expand their businesses internationally.
Educating businesswomen with little experience on the international stage has been the focus of a number of government trade initiatives. Currently, Foreign Affairs and International Trade is sponsoring a virtual mission between women business owners in Canada and Argentina, including all kinds of enterprises. So far, participation in on-line chats to exchange information and/or contacts has been limited, says Andrea Kucey, an international trade consultant with the department in Ottawa, and the mission is being extended, at least until next month.
But by no means are all virtual missions general in scope or limited by gender. In fact, many are organized around industry sectors, with preference given to companies that stand to gain the most.
Ontario Exports Inc., part of the Ontario Ministry of Economic Development and Trade, has made this kind of tightly targeted virtual trade mission a priority, especially for technology-related companies. Since December, 1999, Ontario Exports has been host to missions to Singapore, Milan, Italy, and -- only last week -- one to Los Angeles. It has plans for several more this year, to the United States, Malaysia, Brazil and China.
"If you look at the stats for Ontario, over 90 per cent of our exports are to the U.S., with 40 per cent of them automotive. We want to encourage firms to diversify their exports and showcase ourselves. When people in Asia think of IT, they think Silicon Valley. If they think of Ontario, it's Niagara Falls and maple syrup," says Trevor McPherson, administrator of Ontario Exports' technology-enabled export programs.
Though small companies that are neophytes globally are often the focus, they're not the only companies that stand to gain from virtual trade missions. TDG Interactive of Guelph, Ont., has built some prominent Internet portals and exchanges, including farms.com, an agriculture-sector site listed by Forbes magazine as a leading business-to-business enterprise.
Although TDG has done projects in Britain, the Netherlands, South Africa, the United States, Pakistan and Italy, it was one of a handful of Ontario information and communications-technology companies to link with Italian counterparts in Milan recently.
"About 25 per cent of our business right now is in Europe and our focus is to be a global technology company. But you still have to be careful about your resources. The question is, 'Should we even be in Italy right now?' This virtual trade mission lets us cost-effectively do the exploratory work to find out," says Grant Robinson, TDG's chief executive officer.
Another plus, he says, is the extra credibility that comes from being involved with a government-sponsored project. As a result of the Milan meeting, the company is talking with an Italian company interested in teaming to build portals and wiring communities for health-care delivery, economic development and general telecommunications infrastructure.
There are other spinoffs, too. Participants talk about the networking that goes on with other Canadian companies involved at this end. Then there's the burgeoning business of providing virtual-trade-mission services.
DXNet, part of Toronto's Design Exchange, for instance, has provided videoconferencing facilities for the Ontario Exports meetings. DXNet does this free of charge and, at a discount, is upgrading Ontario Exports' virtual-meeting Web site, which will include company presentations, videostreaming of past virtual missions and audio interviews with trade experts. In return, DXNet gets prominent international promotion of its broadband capabilities and services such as its Internet portal for the design community.
Another company, Tradebuilders, headquartered in Washington, worked on the recent Canada/Atlanta mission, linking videoconference sites in Toronto and Ottawa with three U.S. cities. One of the principals, Peter Turner, also president of another company, Bottom-Line Communicating in Ottawa, provided the technology for the Canada/Malaysia mission as well.
This year, Tradebuilders is doing a U.S. virtual meeting with India and has plans to link American companies with Singapore, Costa Rica, France and Australia. The company also is talking with Canadian business associations and Industry Canada, says Tradebuilders vice-president Elizabeth Vazquez, about another cross-border mission with the United States.
Clearly, there is all kinds of value in virtual meetings for all concerned, including savings for corporate sponsors and governments, which subsidize travel-for-trade missions, as well as participants. But no one is suggesting that they can completely replace face-to-face deal-making. "If I'm spending substantial money," Ms. Vasquez says, "at some point, I'm going to want to see the people, the plant and the widgets."« Back to Press