Internationalisation of small and medium-sized enterprises in Europe: many opportunities remain untapped

  • National promotional institutions Bpifrance, British Business Bank, CDP, ICO and KfW present joint study in Brussels.
  • The percentage of small and medium-sized enterprises (SMEs) that export goods and services in the five largest EU economies is less than 30%.
  • SMEs face a wide range of obstacles that prevent activities beyond their own borders.

The national promotional institutions of the five largest European economies (Bpifrance, France; British Business Bank, United Kingdom; Cassa Depositi e Prestiti, Italy; Instituto de Crédito Oficial, Spain and KfW, Germany) presented a joint study today in Brussels on the international activities of small and medium-sized enterprises in the participating countries.

SMEs play a much less significant role in international trade than in their domestic markets, where they contribute more than 50% of the added value and provide two-thirds of jobs. For example, less than 30% of all SMEs export their goods or services — mainly to other EU countries — and only 3% have direct investments in other countries.

The joint study conducted by the five national promotional banks also shows the importance of the EU internal market for the economic performance of the member states. In 2016, intra-EU exports and imports accounted for more than three fifths of the EU’s total trade. If the trade between the countries in the EU’s internal market is disregarded, the EU’s share of global trade would fall by about half.

Despite the positive effects of a stronger international focus on productivity, growth and sustainability, only a small number of SMEs are considering exporting or importing in the future. The main obstacles to greater internationalisation include a lack of information about international markets, difficulties finding business partners abroad, cumbersome administrative processes and limited human resources. Moreover, access to investment capital is much more difficult for SMEs than for large companies, which makes it even more challenging to finance foreign activities.

Nicolas Dufourcq, Directeur Général of Bpifrance, Dr Fabio Gallia, Chief Executive Officer of Cassa Depositi e Prestiti, Pablo Zalba Bidegain, Chief Executive Officer of Instituto de Crédito Oficial, Dr Günther Bräunig, Chief Executive Officer of KfW and Keith Morgan, Chief Executive Officer of British Business Bank said in a joint statement, “The obstacles SMEs face upon expansion abroad are diverse and they differ across countries. However, a common issue that emerges in all countries is access to finance. SMEs continue to be at a disadvantage when it comes to getting external capital. National promotional institutes (NPIs) have a long history in providing finance to SMEs. In France, Germany, Italy and Spain, NPBs also play a key role in providing export finance to SMEs,”

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