International entrepreneurship and business growth C18TP Enterprise Concepts and Issues © Goodfellow Publishers 2016

Agenda Globalisation and the internationalisation of start-up firms The Theoretical Foundation of International Entrepreneurship Motivations for International Entrepreneurship Building International Entrepreneurial Capability for Growth Enterprise Concepts and Issues © Goodfellow Publishers 2016

The globalisation contextual factors for internationalization of firms Advances in international communication, information technology Pace of technological change in production and transportation Advances in international transport Integration of world’s financial markets Enterprise Concepts and Issues © Goodfellow Publishers 2016

The globalisation contextual factors for internationalization of firms Market-oriented and globalization polices International nature of industry Homogeneity of international market International Competition Enterprise Concepts and Issues © Goodfellow Publishers 2016

Internationalisation of start-up firms The growing success of young international start-ups, who internationalise and succeed in multiple foreign markets early in their operation despite limited resources. The emergence of small and medium enterprises who successfully competed almost from their inception against large and established players in the competitive global market Early internationalised firms or born global firms are more common in countries with smaller domestic markets. Due to the nature of their young age, born globals tend to be mainly micro or small enterprises. Examples: Skype, Seaflex AB, Edinburgh Business School, Cochlear Enterprise Concepts and Issues © Goodfellow Publishers 2016

Theoretical foundation of International Entrepreneurship International Entrepreneurship is the emergent research area at the intersections of International Business, Entrepreneurship and Strategy International Entrepreneurship studies “the process of an entrepreneur conducting business activities across national boundaries” Enterprise Concepts and Issues © Goodfellow Publishers 2016

Theoretical foundation of International Entrepreneurship International Entrepreneurship is the emergent research area at the intersections of International Business, Entrepreneurship and Strategy International Entrepreneurship studies “the process of an entrepreneur conducting business activities across national boundaries” Enterprise Concepts and Issues © Goodfellow Publishers 2016

Theoretical foundation of International Entrepreneurship “the development of international new ventures or start- ups, that from inception, engage in international business, thus viewing their operating domain as international form the initial stages of the firm’s operation”. McDougal (1989, p.389) The authors later on introduced the broader concept to include the study of established firms: “international entrepreneurship is a combination of innovative, proactive, and risk-seeking behaviour that crosses national borders and is intended to create value in organisations” McDougall and Oviatt, 2000:903). Enterprise Concepts and Issues © Goodfellow Publishers 2016

Theoretical foundation of International Entrepreneurship International Entrepreneurship concern early internationalised firms being born global firms and international new ventures and entrepreneurial established firms International Entrepreneurship is considered as a international growth strategy Enterprise Concepts and Issues © Goodfellow Publishers 2016

International New Ventures Entrepreneurs who can identify and act on international market opportunities and be able to manage effectively different resources from multiple countries can drive their INVs to success. There are four types of INVs: Export/import start-ups Multinational trader Geographically focused start-ups Global start-ups Enterprise Concepts and Issues © Goodfellow Publishers 2016

Motivations for International Entrepreneurship Overcome local market constraint: Limited size of domestic markets Pursue unique international niche market: specialised products Shorten product life cycles Need to access to foreign resources: financial, human and technological capital Enterprise Concepts and Issues © Goodfellow Publishers 2016

Motivations for International Entrepreneurship Exploit proprietary technology internationally Avoid domestic inertia within firm Seek for lower costs: labour cost, R&D cost, tax Advantages of small firms in terms of quicker response time, higher flexibility, adaptability Competitiveness of domestic markets Enterprise Concepts and Issues © Goodfellow Publishers 2016

Characteristics of International Entrepreneurs Global vision and commitment International market orientation International experiences Alert to the possibilities of combining resources form different national markets Cross cultural background and network Enterprise Concepts and Issues © Goodfellow Publishers 2016

Characteristics of International Entrepreneurs Innovative mindset, entrepreneurial orientation Emphasis on learning and knowledge development International marketing capabilities Flexibility to adapt to changing conditions abroad Emphasize differentiation and/or focus strategies (eg: super product quality) Enterprise Concepts and Issues © Goodfellow Publishers 2016

Building International Entrepreneurial Capability for Growth Articulating a global purpose. International market opportunity identification: Connect the dots Institutional Bridging: Preference and Capacity for cross-cultural Collaboration Strategic Alliances building Supply chain creation (Adapted from Karra et al, 2008; Isenberg, 2008) Enterprise Concepts and Issues © Goodfellow Publishers 2016

Readings Isenberg, D. (2008). The Global Entrepreneur. December Issue. Harvard Business Review Zahra, S., Ireland, R., & Hitt, M International expansion by new venture firms: International diversity, mode of market entry, technological learning, and performance. Academy of Management Journal, 43(5): Rennie, M Born global. McKinsey Quarterly (4): 45–52. Enterprise Concepts and Issues © Goodfellow Publishers 2016