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Small Business Act Principle X: Encourage and support SMEs to benefit from the growth of global markets. By Igor J. Mitroczuk PhD Econ. Encourage and support SMEs to benefit from the growth of global markets - facts.

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Small Business ActPrinciple X: Encourage and support SMEs to benefit from the growth of global markets

By Igor J. MitroczukPhDEcon

encourage and support smes to benefit from the growth of global markets facts
Encourage and support SMEs to benefit from the growth of global markets - facts

Only 8% of European SMEs report turnover from exports (figure for largeenterprises is28%).

Only12% of the inputs of an average SME are purchased abroad.

Fast-growing markets present untapped potenti

al for many European SMEs.

encourage and support smes to benefit from the growth of global markets facts1
Encourage and support SMEs to benefit from the growth of global markets - facts

Trade barriers impact more on SMEs than on larger companies because of their limitedresources and lower capacity to absorb risks, especially when operating in intenselycompetitive markets.

SMEs therefore need assistance in:

- getting information on potential partners

- openings in their markets.

- overcomingcultural barriers and differences in regulatory or legalenvironments.

encourage and support smes to benefit from the growth of global markets actions
Encourage and support SMEs to benefit from the growth of global markets - actions

EU business centres helping the EU SMEs to enter third-country markets were established in India and China.

Both centers provide business support services including matchmaking, market access assistance, guidance on regulatory issues, IPR.

encourage and support smes to benefit from the growth of global markets actions2
Encourage and support SMEs to benefit from the growth of global markets - actions

The IPR Help Desk in China has been operational for the last three years delivering a targeted advice on IPR issues to EU SMEs.

The Enterprise Europe Network continues to enlarge in third countries.

encourage and support smes to benefit from the growth of global markets actions5
Encourage and support SMEs to benefit from the growth of global markets - actions

The Commission established a number of SME policy dialogues both bilaterally (China, Russia) and multilaterally (EU-MED Cooperation, Eastern Partnership) aimed at approximation of SMEs policy framework.

Market Access Teams are now operations in 30 key export markets. They bring together trade councilors, European Commission and EU business organizations closely cooperation to inform each other about trade barriers and the way how to tackle them.

A study on internationalisation of European SMEs was completed.

policy recommendations and policy examples from member states1
Policy recommendations and policy examples from Member States

1Improve awareness - the UK and PL Passport to export, the Dutch programme Prepare2start

2Focus on micro and small SMEs - First Flight IR

3 Combineinnovation and internationalisation - InnovationPackages DK, NCBR in PL,

4Not only export, also import - Marketplace BalticRegion SE

5 E-commerce – PIPENET in ES

6Improve efficiency in collecting market information -

the effectiveness of support measures
The effectiveness of supportmeasures

1 EIM (2011) based on 8 measures: the most efficientaresupportservices that combine aspects of advice in designing internationalisation

plans and strategies, provision of market informationand support in establishing business contactsin the target country

2 OECD/APEC (2008)based on a 45 country survey, notes that SMEs new tointernational activity need information about markets and opportunities.

Government supportservices should pay more attention to these experienced companies, and focus on more types

of internationalisation than exporting.

the effectiveness of support measures1
The effectiveness of supportmeasures

3 evaluations of UK Trade & Investment (UKTI) programmes: innovative firms derivegreater benefit from UKTI’s support services and inexperienced internationalising companies benefit most fromgeneral supportservices;

The value for money for support services in 2009 is £16:£1 benefit to cost ratiowith passport service at £17:£1 and International Trade Teams in the English Regions (internationalisation and sector experts present in

local offices in the UK, who can provide tailored support) achieve a benefit cost ratio of £25:£1

the world bank on export promotion
The World Bank on export promotion

Daniel Lederman, World Bank Policy ResearchWorking Paper 4044 November 2006 (revised March 2007) 108 TPOs in variouscountries

Averageworldvalue for maneyis US$1 to US$40

For Eastern Europe and someAsiancountriesitcan go up to 1 to 100

the world bank on export promotion1
The World Bank on export promotion

1) The averagescalepays the most with justspending in the range of 1 US$/per capita;

2) the bestresultswhenmade in PPP,

3) no need to doubleorganisationsefforts – one TPO per country

4) On domestic market importantareinformation and support services

5) for developedcountries trade promotionrepresentativesareimportant,

6) the most efficientareactionsdirectedtowards medium and largeexporter, leastefficientactionstowards non-exporters (confirmed by Nowak in PL)