International Entrepreneurship in Small and Medium Size Enterprises

International Entrepreneurship in Small and Medium Size Enterprises

Orientation, Environment and Strategy

The McGill International Entrepreneurship series

Hamid Etemad

The contributors to this volume explore the emerging patterns of SME growth and international expansion in response to the evolving competitive environment, dynamics of competitive behavior, entrepreneurial processes and formulation of strategy.

Chapter 11: The Internationalization Efforts of Growth-Oriented Entrepreneurs: Lessons from Britain

Hamid Etemad

Subjects: business and management, entrepreneurship, international business


Harry Matlay and Jay Mitra INTRODUCTION In the second half of the 20th century, the flow of goods, services, information, capital and labor across national and regional frontiers increased considerably, giving rise to the notion that economic activity is becoming increasingly globalized. Much of the impetus for the globalization process of economic activity was initially provided by large firms through their cross-border expansionary strategies (Taylor, 1995). During the 1980s and 1990s, there was a notable acceleration in the globalization process, which increasingly involved not only large, transnational corporations, but also small and medium-sized organizations (Storper, 1997). The OECD (1997) report shows that internationalized SMEs account for about 25–35 per cent of the world’s manufactured exports, with the contribution of exports to GDP representing 12 per cent of Asian economies and 4–6 per cent for OECD countries. These statistics suggest a radical shift in the internationalization status of SMEs from the 1970s and 1980s. In the UK, for example, while SMEs contributed up to 25 per cent of GDP, they accounted for only 10 per cent of manufactured exports (Willis, 1981). Perceptions are sometimes as important as reality, and the negative perception of size (as in ‘smallness’ being a barrier to internationalization) countered possibilities of growth of SMEs in the international market. In recent years, globalization has increasingly affected the strategies of small, growth-oriented organizations (Karagozoglu and Lindell, 1998). For a growing number of entrepreneurs, the challenges posed by the ‘Global Village’ offered opportunities and threats, which they were...

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