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Diversifying Canada’s exports will not be easy. The gravitational pull of the United States is strong, given the size of its economy and our shared border. Many Canadian businesses have also spent decades gearing their products and services to the particulars of the U.S. market.

But there is hope. The energy transition, adaptation to climate change, the rise of artificial intelligence, a retreat from globalization, increased spending on defence and an aging population all create new risks, but also opportunities for Canadian firms.

As businesses develop plans to increase exports to non-U.S. markets, they should carefully consider these global trends. Markets where demand is expected to grow, or where other businesses face challenges, offer opportunities for Canadian companies to gain a foothold. But many businesses struggle to adequately plan more than five years in advance. They focus on quarterly returns, lack the capacity to plan or channel all their energy toward immediate competitive pressures.

Those that do plan may not have the finances needed to position themselves properly. And investors hate the uncertainty associated with being an early entrant in an untested area, particularly one that is capital intensive and where prospective payoffs are far in the future.

The government can do more to help overcome these gaps by providing information and analysis on long-term opportunities, expanding policies that help to address uncertainties that deter investors and improving support for promising small businesses.

Signs of major global transformation

The International Energy Agency has said that the world is entering an “Age of Electrification” in which transportation, buildings, data centres and industry demand for electricity rises and electricity generation increasingly comes from clean sources.

Demand for critical minerals is expected to rise dramatically in the coming decades along with spending on batteries and defence. Electrification and data centres will drive growth in demand for clean energy, as well as supply chain components, including transformers, cables, electrical steel, wind turbines, electric vehicle (EV) chargers and electrolyzers.

The Organisation for Economic Co-operation and Development (OECD) argues that artificial intelligence (AI) is a general-purpose technology akin to the computer or steam engine,........

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