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SMEs adopting a global mind-set: Oxford Research

Updated: Jul 04, 2013 12:29:35pm
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New Delhi, July 4 (KNN) Small and medium enterprises (SMEs) across the world are making major changes to their business models in order to cater to global demand, an Oxford Research has said.

SMEs are also competing with larger companies by investing in technology to improve operations and become more efficient. The survey of 2,100 executives from SMEs in 21 countries shows they believe they are equipped to compete with larger firms and have some clear advantages over them.


The survey looked at SMEs with an annual turnover of USD 20 million– USD 750 million across the globe.

“The overarching finding of the study was that successful SMEs are going outside of their home market to accelerate growth. And by doing so, they face fierce competition from large multinational corporations and more empowered customers in new markets,” said President, Global Ecosystem and Channels, SAP AG, Eric Duffaut. 


Important findings from the research include:
SMEs are expected to grow outside their home markets while facing increasing global competition at home. The number of firms expecting to generate as much as 40 per cent of their revenue internationally jumps by 36 per cent in the next three years. 

Nearly 60 per cent say competition from companies in other countries has increased substantially in the past two years. And 59 per cent say they are competing more with larger companies now than in the past.

SMEs are forming networks around the globe. Over half of respondents say they increasingly are forming partnerships with suppliers and other vendors located in countries outside their home markets. A similar number are increasingly collaborating with other firms via online business networks and platforms to help drive innovation and growth. 

Nearly 40 per cent of SMEs cite forming strategic partnerships and alliances as a key challenge as they remake their companies for the global marketplace. 

Cloud computing and social media are believed to be important enablers.

SMEs recognize they must embrace business transformation to compete. Two-thirds of all companies surveyed are at some stage of the transformation process (about to begin, in process, or recently completed), with transformation understood to help achieve significant changes to their company’s business models, technology, product offerings, or go-to-market strategy.

Technology is important for SMEs and a major element of transformation. Investing in new technologies appears to be a top strategic priority as SMEs remake their businesses for the global marketplace, including business management software, data analytics, mobile, social media, and cloud computing. 

Almost two-thirds strongly believe technology helps them achieve longevity and sustainable growth. Overall, 35 per cent of respondents identify themselves as early adopters; the figure rises to 42 per cent for discrete manufacturers and to 47 per cent for firms in North America.

Additionally, less than one-third of respondents say their firm lacks the technology capabilities of larger competitors and only slightly more than one-quarter say they struggle to understand how technology can create measurable benefits for their firm.


Innovative technology is a key to help enter new markets and create strong customer relationships. Regionally, emerging markets (55 per cent) place an especially high emphasis on innovation. 

Emerging-market companies also are more likely (54 per cent) to expect growth to be driven by new product and service offerings than those in developed markets (43 per cent). 

Mobile is the leading technology driver of competitive advantage for SMEs as well as an important driver of innovation; respondents cite improved innovation as the biggest benefit of mobile adoption, more than other technologies considered.


SMEs are job engines but face cultural obstacles to technology adoption. Nearly half (46 per cent) of respondents are actively hiring employees to support their growth activities. SMEs face the same issues as their larger competitors; 39 per cent find it increasingly difficult to recruit people with the right skills.

According to 31 per cent of responses, encouraging employees to use mobile technology is one hurdle; while 35 per cent say lack of understanding of the benefits of cloud computing is an issue. And 43 per cent of SMEs indicated they have trouble encouraging employees to embrace social media.

“The road ahead is well marked for SMEs,” said Edward Cone, managing editor and senior analyst at Oxford Economics. “Globalization, transformation and technology will be the hallmarks of successful small and midsize companies.” (KNN)

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