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 Only 8% of European SMEs report turnover from exports (figure for large enterprises is 28%). Only 12% 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 - facts Trade barriers impact more on SMEs than on larger companies because of their limited resources and lower capacity to absorb risks, especially when operating in intensely competitive markets. SMEs therefore need assistance in: - getting information on potential partners - openings in their markets. - overcoming cultural barriers and differences in regulatory or legal environments.

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 - 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 - 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.

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

Policy recommendations and policy examples from Member States

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

Policy recommendations and policy examples from Member States 1 Improve awareness - the UK and PL Passport to export, the Dutch programme Prepare2start 2 Focus on micro and small SMEs - First Flight IR 3 Combine innovation and internationalisation - Innovation Packages DK, NCBR in PL, 4 Not only export, also import - Marketplace Baltic Region SE 5 E-commerce – PIPENET in ES 6 Improve efficiency in collecting market information -

Policy recommendations and policy examples from Member States

World Bank on export promotion

The effectiveness of support measures 1 EIM (2011) based on 8 measures: the most efficient are support services that combine aspects of advice in designing internationalisation plans and strategies, provision of market information and support in establishing business contacts in the target country 2 OECD/APEC (2008) based on a 45 country survey, notes that SMEs new to international activity need information about markets and opportunities. Government support services should pay more attention to these experienced companies, and focus on more types of internationalisation than exporting.

The effectiveness of support measures 3 evaluations of UK Trade & Investment (UKTI) programmes: innovative firms derive greater benefit from UKTI’s support services and inexperienced internationalising companies benefit most from general support services; The value for money for support services in 2009 is £16:£1 benefit to cost ratio with 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 Daniel Lederman, World Bank Policy Research Working Paper 4044 November 2006 (revised March 2007) 108 TPOs in various countries Average world value for maney is US$1 to US$40 For Eastern Europe and some Asian countries it can go up to 1 to 100

The World Bank on export promotion 1) The average scale pays the most with just spending in the range of 1 US$/per capita; 2) the best results when made in PPP, 3) no need to double organisations efforts – one TPO per country 4) On domestic market important are information and support services 5) for developed countries trade promotion representatives are important, 6) the most efficient are actions directed towards medium and large exporter, least efficient actions towards non-exporters (confirmed by Nowak in PL)