Policy and Strategy Perspectives
- The McGill International Entrepreneurship series
Edited by Hamid Etemad and Richard Wright
Chapter 5: Internationalization of Australian SMEs: Challenges and Opportunities
Quamrul Alam and John Pacher INTRODUCTION Globalization encompasses a wide range of issues and developments. It includes changes in business strategies in production, marketing, ﬁnance, and research and development (R&D). The increase in globalization has signiﬁcantly inﬂuenced global trade and investment. Rapid technological changes in communications and transport, and an increasing trend toward deregulation of foreign exchange, foreign investment and ﬁnancial markets have signiﬁcantly aﬀected the structure of industry and business competitiveness. Globalization has created greater incentives and opportunities for companies to access the various markets and knowledge sources needed to build lasting competitive advantages through continuous innovation (OECD, 2000). As well, it has brought about new competitors for SMEs in the industrialized world, especially in countries with high labour costs, such as Australia. SMEs need to search for competitive advantages across national borders in order to sustain their existence. They are faced with pressures to reduce production costs, increase productivity, and become more knowledge intensive. To achieve this end they have to internationalize their business activities. Consumers today want the best and the cheapest products, with little concern about where they are produced. Australian SMEs need to establish themselves as critical partners in the new internationalization process. This chapter examines the challenges and the opportunities that face Australian SMEs which want to internationalize their operations. The aim is to demonstrate that as the economy becomes more integrated into globalized trade and business, there is an increased need for a supportive domestic environment to help...
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