Which instruments can contribute to a significant improvement of the internationalisation of regional SMEs?

How to improve the governance of the multiple stakeholders usually dealing with SME internationalisation on regional level?

Those questions are being addressed by a number of Interreg Europe project dealing with the challenges and opportunities to foster the international development of SMEs. The SME Internationalisation Exchange (SIE) Interreg Europe project has compiled some answers in their Cross region comparative study on the Internationalisation of Small and Medium Enterprises putting together the findings of all project regions and highlighting some best practices and policy recommendations. Building on the analysis of the major barriers encountered by SMEs in the process of reaching out to international markets, the SIE partners have narrowed down their policy recommendations to the following two main aspects:

  • “First, the establishment of a cross-regional business network that will enable SMEs to take advantage of opportunities in other regions and share risks across borders…”
  • “… Second, the establishment of a policy laboratory that will foster sharing of best practice across regions but will also monitor and evaluate the implementation of policies across regions through engagement with a small number of SMEs.”

The study does not only provide recommendations, it also displays innovative instruments with good results and having a significant potential for being transferred to other regional environments. This selection highlights especially the emergence of practices aiming at delivering support to organised groups of businesses rather than to single enterprises.

Two practices – both available on the Good Practice database of the Interreg Europe Policy Learning Platform – illustrate this approach:

  • Export Consortia (Region Cantabria, Spain - SODERCAN Regional Development Agency for Cantabria),
  • Clustering for International Markets (Region Kujawsko-Pomorskie, Poland - Torun Regional Development Agency).

Both practices address the issues of size and capacity, which are two major barriers identified by SIE hampering SMEs in their international development, by supporting sector-focused clusters of companies that wish to internationalise rather than single ones. For both schemes, the funding is mainly dedicated to the establishment of such clusters, e.g. to form a legal entity, set up financial systems, appoint a manager and start to market themselves. Those clusters enable the members to offer complete solutions to potential international contractors, way beyond the possibilities of each single company.

As a consequence, the participating SMEs have to come up for the costs of operating the clusters after the set-up phase, e.g. for paying a shared cluster manager. Thus, only successful clusters will be able to maintain their activities beyond the seed phase and aim at becoming self-sustainable. And the approach actually works: the Grupa HORECA Cluster (Hotel, Restaurants & Catering) in Torun and the Santander Global Metal Group (metal-mechanical sector) in Cantabria provide hereby examples of such succesful clusters. 

As stated by Guillermo Barredo Gallarza, Consortium Manager for the Santander Global Metal Group, “success is measured by looking at the number and value of new export orders for the group, most of which would not have been accessible without the formal structure of the consortium. Of course, the companies would soon let us know if they weren’t happy with the group so their continued commitment to the group shows how valuable it is for SMEs.”

The Interreg Europe Platform expects to explore further such successful instruments for supporting the internationalisation of SMEs in the framework on an online thematic discussion which will take place by the beginning of December. Stay tuned!

Further information is to be found here:

SIE website

Cross region comparative study on the Internationalisation of Small and Medium Enterprises

Clustering for International Markets good practice

Export Consortia good practice

Grupa HORECA website

Santander Global Metal Group website

Image credit: Photo by Suzy Hazelwood from Pexels