Internationally-focused SMEs prosper in global village – DHL study

A DHL Express study by IHS, a leading global source of information and analytic, has shown that international trade and cooperation had become a key driver of small business success globally.

The macro-economic analysis and survey of 410 SME directors in G7 and BRICM economies revealed that SMEs engaged in international markets were twice as likely to be successful as those that only operate domestically.

Out of the SMEs surveyed, 26 per cent of the companies that traded internationally significantly outperformed their market, in contrast to only 13 percent of those with operations only in their home country.

According to the survey, SMEs cited the key benefits of this international approach as the access to new markets that it provides them with, as well as access to know-how and technology, and diversification of their products or services.

In a statement signed by Mr Kader Coulibaly, General Manager for DHL Express Ghana on Wednesday said the results ring true for SMEs within Africa, which are increasingly being recognized as drivers of economic growth in these countries.

“While no verified data is available around the number of SMEs operating on the continent, they make up over 90 per cent of formalized business within countries like Ghana and South Africa, and are important areas of development within Ghana”, the statement said.

Mr Kader added that the results of the study were reflected in the outlook for SME’s in Africa.

According to him, the possibilities opened up by new technologies, the Internet, and modern transportation meant that there were many foreign trade opportunities out there for Ghanaian businesses.

“With thorough research and a well-defined strategy, local SMEs can successfully expand into new markets, compete with larger companies, and use their size and nimbleness to their own advantage,” Mr Kader said.

The research also reveals an increasing pace of globalization and a sharper international focus among smaller businesses, with SMEs that were founded in the last five years more likely to have international business operations than older SMEs, despite having had less time to grow their businesses.

Significantly, the majority of SMEs, which had out-performed their markets over the last three years, indicated that they also planned to increase the percentage of exports in their turnover over the next three years, despite the uncertain economic environment.

The report also indicated that inadequate business infrastructure was constraining competitiveness by reducing business efficiency, which SMEs needed to work harder to overcome, particularly compared to larger companies with greater resource.

The report however mentioned some SMEs biggest concerns relating to international trade as lack of available information on foreign markets, high customs duties and the difficulty of establishing contacts with foreign partners and an overseas customer base.

It said most of the better-performing SMEs identified in the study employed over 50 people, underscoring the importance of resource in overcoming barriers to international growth.

“There are clearly still some hurdles that remain for small businesses with global aspirations, but we are delighted to see that more and more SMEs are looking at the fantastic opportunity that international trade represents,” said Mr Ken Allen, Chief Executive Officer of DHL Express.

He said the mission of DHL was aimed at making the process more efficient and would continue to tailor services and solutions to help SMEs grow and compete in the global village