A DHS Express-sponsored global study of 410 Small and Medium Enterprises in G7 countries, Brazil, Russia, India, China and Mexico reveals that those who are engaged in international trade grow faster than their counterparts in domestic trade
| By Maureen Chigbo | Feb. 25, 2013 @ 01:00 GMT
INTERNATIONAL trade and cooperation has become a key driver in the success of small businesses, according to an in-depth and wide-ranging DHL Express-sponsored study by IHS, a leading global source of information and analytics. The macro-economic analysis and survey of 410 SME directors in G7 and BRICM, an acronym for Brazil, Russia, India, China and Mexico, economies reveals that SMEs engaged in international markets are twice as likely to be successful as those that only operate domestically.
Of the SMEs surveyed, 26 percent of the companies that were trading internationally significantly outperformed their market, in contrast to only 13 percent of those with operations only in their home country. SMEs cited the key benefits of this international approach as the access to new markets that it provides them with, as well as access to know-how and technology, and diversification of their products or services.
The results ring true for SMEs within Africa, which are increasingly being recognised as drivers of economic growth in these countries. While no data is available around the number of SMEs operating on the continent, they make up over 90 percent of formalised business within countries like Ghana and South Africa, and are an important area of development within the continent.
“The results of this study are reflected in the outlook for SME’s in Africa,” said Charles Brewer, managing director for DHL Express Sub-Saharan Africa. “The possibilities opened up by new technologies, the internet, and modern transportation means that there are many foreign trade opportunities out there for African businesses. With thorough research and a well-defined strategy, local SMEs can successfully expand into new markets, compete with larger companies, and use their size and nimbleness to their own advantage,” Brewer said.
The research also reveals an increasing pace of globalisation and a sharper international focus among smaller businesses, with SMEs that were founded in the last five years more likely to have international business operations than older SMEs, despite having had less time to grow their businesses.
Significantly, the majority of SMEs who had out-performed their markets over the last three years indicated that they also planned to increase the percentage of exports in their turnover over the next three years, despite the uncertain economic environment.
The report does, however, highlight that inadequate business infrastructure is constraining competitiveness by reducing business efficiency, and that SMEs are having to work harder to overcome infrastructure inefficiencies, particularly compared to larger companies with greater resource. SMEs biggest concerns relating to international trade are a lack of available information on foreign markets, high customs duties and the difficulty of establishing contacts with foreign partners and an overseas customer base. Most of the better-performing SMEs identified in the study employ more than 50 people, underscoring the importance of resource in overcoming barriers to international growth.
“There are clearly still some hurdles that remain for small businesses with global aspirations, but we are delighted to see that more and more SMEs are looking at the fantastic opportunity that international trade represents,” said Ken Allen, chief executive officer, DHL Express. “Our mission as a global logistics company is to make this process more efficient, and we will continue to tailor our services and solutions to help SMEs grow and compete in the global village.”
DHL is the global market leader in the logistics industry and “The Logistics company for the world”. DHL commits its expertise in international express, air and ocean freight, road and rail transportation, contract logistics and international mail services to its customers.
A global network composed of more than 220 countries and territories and about 275,000 employees worldwide offers customers superior service quality and local knowledge to satisfy their supply chain requirements. DHL accepts its social responsibility by supporting climate protection, disaster management and education. DHL is part of Deutsche Post DHL. The Group generated revenue of 53 billion euros in 2011.