Vast majority of SME business leaders forecast increase in global expansion activity
Kreston Global’s newest interpreneur report reveals that small and medium businesses hold a positive outlook towards their own global operations and are prepared to harness disruption to drive commercial growth at home and abroad. This comes despite macroeconomic concerns around geopolitical disruption, slowing global GDP, and a gradual decline in international collaboration which are dampening commercial outlooks for many public companies and giving rise to ‘deglobalisation’ concerns.
Now in its second iteration, the Kreston interpreneur report is based on a survey across 14 different countries of 1,400 ‘interpreneurs’ or business leaders of organisations with revenue up to £300 million (approx. $372m) who had successfully expanded their business into international markets. The research explores small-to-medium business global mobility trends and the strategies business leaders are using to navigate the commercial pressures of global entrepreneurship today.
Drivers and barriers to interpreneurial success
While interpreneurs acknowledge the challenging macro-economic headwinds facing global expansion, it is clear that the reward outweighs the risk. Almost all respondents (96%) agree that global expansion has been of benefit to their business, citing commercial growth across increased sales and revenue (53%) and profitability (46%) as the top benefits.
Evaluating their own international expansion journey, more than half of survey respondents said their businesses’ primary motivation was to secure market growth opportunities (52%), followed by a desire to gain a competitive advantage by establishing a foothold in new regions before rivals (36%). Respondents were far less interested in the incentives, that the host country had to offer (17%).
The biggest challenges faced were adapting logistics and supply chain issues (41%), finding the right local partners (39%) and managing economic volatility (38%).
Global ambition: Where to next?
Looking ahead, 87% of respondents said they expect an increase in the number of businesses expanding overseas in the next 12 months. When asked which region or country respondents would consider expanding to, just 1% cited no plans or intention to move into a new market. The most popular destinations respondents said their business would consider expanding into are Western Europe (52%) and North America (48%).
When evaluating what makes a country or region most attractive for international expansion, respondents cited favourable economic prospects (43%), favourable trade agreements (41%) and availability of skills and talent (41%).
Liza Robbins, chief executive of Kreston Global, said: “Our 2022 report – released in a period of global recovery and optimism – demonstrated a huge appetite for SME international expansion. Despite the critical global challenges we are facing, this appetite seems to not only have maintained but intensified as SME business leaders seek out larger markets and commercial channels for growth.
“Although the global challenges faced by interpreneurs are acute, with supply chains and logistics remaining a consistent challenge between the 2022 and 2024 report, SMEs are uniquely positioned to deal with navigating uncertainty. Harnessing the benefit of agility, interpreneurs can turn those challenges into opportunities and leverage new ways in which to make their business successful at home and abroad.
“With these findings in mind, our objective remains to inspire and equip interpreneurs – or those with ambitions to expand internationally – to not only navigate international markets and the ever-evolving regulatory environment, but thrive in any situation and confront any obstacle posed.”
Rich Howard, chair of Kreston Global, added: “It has been very interesting to see how interpreneurial attitudes have changed over the course of two tumultuous years. It is encouraging that most interpreneurs in this survey do not see overseas expansion slowing down any time soon. There is still a clear appetite for accessing and expanding into new markets as well as international collaboration.
“This report provides fascinating insight into everything that current and prospective interpreneurs should consider when looking to expand overseas including both the cited benefits as well as the key risks.”
