Bdaily's Dr Roy Stanley on the case for internationalisation: why SMEs should think globally
**Following on from his Black Swan Series, entrepreneur and Bdaily chairman Dr Roy Stanley has focused his attention on the potential for internationalisation.
In the first of a week-long series of pieces, Roy will look at how it may benefit SMEs to be internationally-minded in the post COVID-19 world.
“Less than 30 per cent of SMEs are involved in international trade and less than 3 per cent have any direct selling in other countries - most of this trade is with EU countries. This compares to their domestic markets, where they contribute more than 50 per cent of the added value and provide two-thirds of jobs.
“This pandemic has thrown up a need to act and a focus on the impact of globalisation and international supply chains. On the negative side the UK is in competition with other countries for such things as PPE, treatments and potentially vaccines.
“On the positive side the UK is collaborating with other countries on data gathering, virus knowledge, treatments and vaccines. This pandemic is a global Black Swan Event (BSE) being unpredictable, rare in its rapid contagion and is having massive economic and social impact.
“It is understandable that the temptation for many leaders and managers of SMEs is to hunker down and concentrate on survival and focus on their existing domestic market. Is this the opportunity to consider expansion into international arenas post the lockdown?
“Growth inclined businesses have demonstrated openness to engaging in internationalisation while growth-ambivalent and growth-resistant business owners have typically avoided this activity. Business owners disposed to growth are also more likely to think and act strategically.
“Research indicates that rapid growth results from unpredictable random events. Once these random opportunities are taken then strategic thinking kicks in.
“Using an international strategy means focusing on exporting products and services to foreign markets, or conversely, importing goods and resources from other countries for domestic use.
“SMEs often depend on personal networks and even word of mouth to develop a presence in a new market. While it is relatively easy to establish personal networks in a domestic market, it may be more difficult and cost prohibitive for SMEs to establish themselves in overseas markets.
“The SME should start early to study market internationalisation and access to public support for SMEs contemplating internationalisation movements. Some questions SMEs looking to internationalise might want to consider are:
“Is there a growth mindset within the business?
“Do we want to internationalise the business?
“Has the business and people within the business got what it takes to internationalise?
“Who can be networked with to assist in going international?
“Are there any mentors out there who could help?”
For more information on internationalisation for SMEs, contact Dr Roy Stanley here.
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