Small businesses remain skeptical of a government pilot project launched yesterday designed to infuse $80 million into the small and medium sized business (SMB) sector to help companies adopt information and communication technologies.
In his announcement yesterday, Christian Paradis, Minister of Industry, said the program will provide advisory service and financial contributions of up to $100,000 to eligible SMBs within the three-year life of the program starting in the fiscal year 2011-2012. The Digital Technology Adaption Pilot Program (DTAPP) is actually a part of the Conservative government’s Digital Economy Strategy which was announced when the government budget for this year was released.
“This program will help more than 600 small and medium-sized enterprises integrate innovative technologies into their businesses to create jobs and economic growth,” said Paradis in his announcement yesterday.
However, the Canadian Federation of Independent Businesses (CFIB), which has some 102,500 member businesses across the country, was taking a wait-and-see posture.
“We’re always a bit skeptical of government grants and programs. We’re waiting to find out if the program will really help the people it was intended to help,” Corinne Pohlmann, vice-president of national affairs for the CFIB told ITBusiness.ca.
Pohlmann said the two main concerns of CFIB members is that release of the funds to recipients will be tied up by government red tape, and that smaller businesses might be left out.
“Sometimes, the funding does not get to the real small businesses that need it. Instead the funding goes to the larger mid-sized businesses,” she said.
Many small business owners, Pohlmann explained, “do not have the awareness or the time” to research available government programs. By contrast, mid-sized and large companies with more resources are able to hire consultants to scour for programs and put together the required documents to apply for the grants, she said.
She also said that many small business owners have become tired of the long wait stemming from often unnecessary and bloated government procedures.
Pohlman said a CFIB survey in 2010 revealed that SMBs and larger businesses lose an estimated total of $30 billion each year due to red tape.
Business that have the money to hire consultants to help them wade through government paperwork and regulations still end up not taking home as much as they expected from government grants, she said. “Those that hire consultants typically pay them anywhere from 20 per cent to 40 per cent of the grant or credit,” the CFIB executive said.
Why IRAP rocks
However, Pohlmann said CFIB is happy to learn that the DTAPP is being administered by the National Regional Council of Canada’s (NRCC) Industrial Research Assistance Program (IRAP).
“The IRAP enjoys a good reputation with our members because they know it is an independent body and that it is committed to helping small businesses,” she said.
Through its team of technology and business experts around the country, IRAP provides small businesses with mentorship services and aid in accessing financial assistance, according to Bogdan Ciobanu, director general of the NRCC – IRAP. One of the IRAP’s strengths, he said, is in its ability to assess the needs of small businesses and help them connect with government, education and professional organizations that can help them achieve their business goals.
When asked about the SMB sector’s fears that red tape will bog down the release of DTAPP funds, Ciobanu replied. “We are different from other agencies, where businesses often contact through the Internet and require companies to fill out forms before they get an audience with agents.”
He said that when businesses call or contact IRAP through the NRCC website, “somebody contacts them back hopefully within a day.”
Ciobanu stressed the contact does not start with paperwork. “Our advisers arrange to meet with the business owners and operators in their location to discuss with them their problems and assess their needs.”
This he said, will be roughly the same procedure that will be followed when it comes to handling the DTAPP.