On March 16, 2016 the report International Market Exit and Re-entry: An empirical study of the export patterns of Swedish SMEs authored by Lucia Naldi Andrea Kuiken, Professor and Doctoral at Jönköping International Business School was launched. The report identifies the internationalization patterns of Swedish small and medium-sized enterprises. At the seminar there was a discussion of both exports and imports, global value chains, businesses’ export maturity and the need to defuse exports – a part of the everyday trade.
Targeted measures best
The seminar moderator Pernilla Norlin, Deputy Managing Director and Head of Communications Swedish Entrepreneurship Forum, opened the seminar by stating that the organization has published several reports on the export-theme, for example the policy brief Immigrants and the Internationalization of Business -Do They Increase Service Exports?. With that, Lucia Naldi and Andrea Kuiken were welcomed up on stage. Pernilla Norlin
Initially Kuiken explained that their study investigated the export patterns for Swedish companies. This included, the length of stay in any given market, in what region, if the enterprise exited the export market and if they re-entried at some stage.
– The probability of exit is highest during the first year.
Export is a greater challenge for SMEs compared with large enterprises since they can spread risks more, Kuiken showed. The smaller a company is, the more careful it must be with market selection. She also showed that more and more companies choose to internationalize at an earlier stage. This can have an advantage since the companies do not need to change deep rooted structures.
During the covered period, 60 percent of companies continuously exported, the authors showed. About 20 percent left the export market completely, and about as many re-entered. Jönköping County stood out with almost 80 percent of companies which continuously exported. The area is famous for its entrepreneurial spirit and this study showed nothing to contradict this, Naldi determined.
Family businesses had the greatest likelihood of continuous exports, something Naldi and Kuiken felt was a surprising result. The authors speculated whether this could be related to the enterprise being the financial security for the family. This would mean planning for longer terms and not giving up at the first adversity.
– We must not forget the young firms that have been exporting but do not keep up continuously, Naldi said.
More efforts should be directed at this group. Especially since previous research has shown difficulties in persuading companies to start exporting if they have not shown interest to start with.
Make internationalization less dramatic
Following Kuiken and Naldis presentation Lena Johansson, Secretary-General of Sweden International Chamber of Commerce was the first to comment. One of her reflections was that there is no such thing as Made in Sweden, one third of exports depend on imports. Production and manufacturing is international. Thanks to the imported goods Swedish exports have higher value added than before.
– Internationalization doesn’t have to be so dramatic, to trade with other countries is almost the same as to trade within a country.
Johansson was followed by Helen Rönnholm, Director Regional Trade Advisor and the SME-programme, Business Sweden. She would have liked to see a company maturity apect as well as company profitability in the report.
– Why do companies leave markets? Are there macroeconomic variables?
Carl B. Hamilton, Professor and Special Adviser on Trade Policy to the EU Commissioner for Trade, Cecilia Malmström, gave his views on the report’s conclusions in the perspective of a politician and as a recipient. He said that increasing exports is not a goal in itself. Imports actually creates more jobs, for example within clothing. Exports are often managed by capital intensive companies, if one is to become an exporter one must deal with rather complex goods. Carl B Hamilton