Small Business, Big Global Opportunities
FedEx Express study: Small businesses that export are well-positioned to prosper in today’s connected international economy. But many are simply unaware of how to translate that potential into business success.
Have you heard of “micro-multinationals”? They’re small enterprises, sometimes with only one or two employees, with a presence in at least two different markets. And they’re making waves in the world of global commerce.
How do they do it? It typically comes down to some combination of a distinctive product or service, a well-designed website, and technology tools that are more affordable than ever thanks to open-source software and cloud-based data storage. One of the most high-profile examples of a successful micro-multinational is Skype, started by two entrepreneurs — one Danish, one Swedish — in 2003 and sold to Microsoft in 2011 for nearly U.S.$9 billion.
But millions of lesser-known businesses are also reaping the benefits of our increasingly connected world. A McKinsey study found that 90 percent of commercial eBay sellers worldwide now sell and ship their products across international borders.
And that success reflects a new world of opportunity for small- and medium-size enterprises (SMEs) in nearly every country. The problem: Many of them simply aren’t aware of the opportunities, or how to go about becoming micro-multinationals themselves.
That finding comes courtesy of a new global research study commissioned by FedEx Express. The study, which was conducted by Harris Interactive, offers valuable insights on the import and export behavior of small businesses worldwide, as well as the challenges they face.
Harris interviewed 6,891 senior executives from SMEs around the world. One key finding: Exporting SMEs are 1.7 times more likely to be experiencing rapid growth than those that don’t sell across borders. In a similar vein, SMEs that export generate average annual revenues of US$1.5 million. In the Asia-Pacific region, that figure is even higher, at US$1.8 million.
“SMEs form the backbone of many markets in today’s global economy,” says Raj Subramaniam, executive vice president, Global Marketing and Communications, FedEx Services. “And the findings of the research make clear that good things happen when those SMEs connect to global markets. The revenues they generate create jobs that can help lift up entire communities. At the same time, however, the study indicates that many SMEs are still missing out on export opportunities.”
- Two other findings from the report underscore Subramaniam’s analysis:
Although 79 percent of SMEs worldwide recognize the potential of export markets, only 38 percent currently export.
- Only 16 percent of SMEs globally feel they have sufficient logistical and other support to succeed in international markets. In the Asia-Pacific and Latin American-Caribbean regions, the number is even lower, at 10 percent and 14 percent, respectively.
Still, the report also notes that SMEs are optimistic about the prospect of exporting despite those perceived barriers. Globally, 55 percent of SMEs anticipate they will be doing so by 2020. They are even more positive when it comes to international business growth: 66 percent anticipate they will be reaping greater revenues from overseas business within five years. SMEs in Latin America, the Caribbean, the Middle East, the Indian subcontinent and African regions are particularly bullish; approximately 70 percent see themselves doing international business and enjoying higher international revenues by the end of the decade.
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