Internationalization: one third of Swiss SMEs generate three-quarters of their income abroad.

The Swiss International Entrepreneurship Survey (SIES) Report is a study of Swiss SMEs that export their products or services on the international market. Researchers at the School of Management Fribourg (HEG-FR) have analyzed the behavior of 476 companies in two clusters in terms of the degree to which they trade internationally.

The SMEs are classified in two clusters by means of regional distribution: SMEs with little international expansion and SMEs with a strong global presence. It is interesting to note that SMEs with a strong global presence generate almost three-quarters of their turnover abroad. This indicator is divided by three in the case of SMEs with little international expansion.

Timing of internationalization

The SIES Report highlights a fundamental difference between the two clusters: the moment in time when SMEs develop their business in the international market. Whereas SMEs with a strong global presence initiate their international expansion in the very early stages, or within four years after the company has been financed, SMEs with little international expansion wait almost twice as long. In fact, SMEs with little international expansion start to expand abroad after more than seven years.

Another remarkable aspect is that SMEs with a strong global presence use two or three different strategies for developing their business presence in chosen regions. The strategies used by these SMEs tend to have higher risk attached, and are characterized by a markedly entrepreneurial approach. Generally speaking, SMEs with a strong global presence are more proactive and innovative.

Digital Internationalization

Since 2019, the authors have observed that SMEs with an international scope have devoted the most effort to digitalization, which involves infrastructure, process and corporate culture. "Unlike the situation in 2019 when e-commerce was used to canvass in Western Europe, online commerce is now increasingly used outside Europe, particularly in North America," observes Pascal Wild, co-author of the SIES Report.

The greatest change with respect to 2019 is in digital customer integration. This is reflected in the increased customization of offers thanks to data, to the detriment of websites and interactions via standardized channels. Moreover, in response to companies' needs, the School of Management Fribourg (HEG-FR) has set up a postgraduate course in Digital Transformation Management to support these changes through training courses and sharing experiences.

Micro companies who think big

Another category attracted the researchers' attention: micro companies with fewer than ten members of staff, which have seen a huge increase in the last 15 years. Despite their small size, almost half of them conduct business in more than ten countries and in more than three regions of the world. These micro companies rely on their key skills and frequently outsource a large part of the activities to partner companies in their value creation process.

They do business in commerce, industry, information and communication technology (ICT) or in consultancy services, and on average generate a turnover of between 1 and 5 million. They begin launching their business on foreign markets only two years after being created. Because they already have a considerable focus on the international market, it is not surprising that these companies are keener than ever to develop their international business in the future.