A new study released today shows that small and medium sized enterprises (SME) engaged in international markets were twice as likely to succeed compared to those operating domestically. The research also showed firms like this started within the last five years were more likely to have international business operations, compared to older businesses. Of those surveyed, 26% of the companies trading internationally significantly outperformed their market, in contrast to only 13% of those who outperformed their market with operations only in their home country.
Many of the highest performing SME's planned to increase their percentage of exports over the next three years, despite the uncertain economic environment. The report does emphasize that inadequate business infrastructure is usually the greatest obstacle to competitiveness, especially against larger companies.
“The strong correlation between improved business performance and cross-border trade suggests that there is a clear benefit for SMEs in going global,” said Ken Allen, CEO, DHL Express. “As the world leader in international express delivery, we also firmly support the view that international trade creates tremendous value for SMEs. It not only opens up new markets for their products and services, but also gives them access to international best practices and innovations. Perhaps most significantly, competing internationally forces them to sharpen their own internal operations and processes, which benefits their business in their home market as well as abroad.”
The study, conducted by DHL Express and IHS Global Insight, a global economic consultancy, incorporated analysis of IHS proprietary data, recent studies of small business and an online survey of 410 employees, director-level and above, at small and medium sized enterprises in G7 countries and in Brazil, Russia, India, China and Mexico. The study focused entirely on businesses with between 10 and 249 employees.
The full study may be downloaded here.