3 out of 4 Flemish SMEs stay in their home market
08 May 2008The globalisation of the economy is giving SMEs more competition in their home market. At the same time, globalisation is opening up new possibilities. But, even though import and export increase a company’s chances of survival, Flemish companies are making too little use of these opportunities. Therefore, according to Prof. Dr. Leo Sleuwaegen and Mr. Jonas Onkelinx of the Flanders DC knowledge centre at Vlerick Leuven Gent Management School, SMEs need to think strategically about how they can (continue to) play a part in the global economy. In addition, the existing SME support policy should be adapted to the new market conditions.
Shocking figures:
- In Flanders, 3 out of 4 SMEs stay in their home market. 74% do not export.
- 1% of all enterprises is responsible for nearly half of our export. And this exportation does not extend much further than our neighbouring countries. Our long-distance exportation is even declining.
- No less than 85% of the export is conducted by only 10% of the companies.
- 1 in 6 potential export companies does not export, because it thinks that its product cannot compete internationally (Flemish false modesty?).
- Over 40% of the SMEs have never even considered internationalising.
- Obstacles to internationalisation often cited in the press and at entrepreneurial forums are: complicated laws and regulations, access to capital, cultural differences, lack of information and support and advice. In practice, these turn out to really be obstacles for just +/- 10% of the SMEs.
Pascal Cools, General Director of Flanders DC, responds: “A small nuance: although these figures are shocking, we score somewhat better than the European average. But you would expect much more from an open economy like Belgium’s. We are exploiting our potential to only a very small degree.”
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