International Business

“Small and medium-sized enterprises have as much to gain as to fear from the process of internationalization”

Word count: 2071

Table of contents Introduction 3 I – Drivers and advantages in SMEs’ internationalization 4 II - Reservation and barriers confronted by SMEs 7 Conclusion 6 References 6

Introduction

The global economic growth during the last 50 years has been faster than any time before. The worldwide crisis, which reached several parts of the world, requires small and medium enterprises (SMEs) in the continuation of further improving in their performances, enhance their competitiveness and seize new opportunities. Also, because “globalization has removed the barriers” (Levitt, 1983), international economies and the decrease of the trade barriers have implied in an easier access to markets.

In the last decades, globalisation had an effect on both firms with an export profile and companies targeting domestic markets. The benefits of the globalisation are several. It allows a better competition between the different world economies, which leads to a widest choice of products for cheaper prices. This greater effectiveness in the markets dues to the specialization of economies and larger markets for exportation has resulted in a significant augmentation of the world economic growth. Some of the different causes for the increasing number of internationalization by SMEs are ingrained in political, technological and economical reasons.

Nowadays, SMEs have a considerable impact in the world trade environment. For example, in Europe SMEs account for 99.8% of all enterprises and employ 67.4% of the working population (Annual Report 2009 to the European Commission).

In accordance with the European Union, SMEs are composed by medium-sized enterprises with a maximum headcount of 250, small firms with less than 50 employees, microenterprise with at most 10 employees. Additionally, there are