SMES AND THE NEW GEOGRAPHY OF BUSINESS: NO SME IS AN ISLAND. The era of Global Opportunity, Global Competition, Global Talent?

– by Juha Saukkonen –

intertwinedTo the members of INSME and readers of its publications the fact more and more known and acknowledged by public and political spheres has been clear for long: net job creation in all developed economies – and increasingly also in the emerging countries – is based on SME cohort of companies. The key word in this statement is NET. Yes, multinationals and large domestic organisations still hire – but parallel to hiring they fire, outsource, offshore even more.

Let’s look at the country where I come from: Finland with its 5,5 million population. Between years 2002 and 2013 microsized and small firms created 102.000 net jobs in them. In the same timeframe the large corporations were job destructors, the balance for them shows -16.000 jobs. As said earlier, the knowledge of this SME role in employment dynamics is spreading, and even more and more students honing their professional skills for the career in business are increasingly aware and attracted in SMEs as their future workplace. And since the youth of today is much more international and diverse than any generation up to this date, their offering to SMEs has much more of global flavor than we have seen earlier.

SMEs have been, are and will be also key players in internationalization of economies and societies they operate in. At this front, however, there is still road ahead. Or in other words – much of underused potential. How much of the total amount of exports do the SMEs account for: Eurostat (2014) points out Estonia and Denmark with their appr. 30 % share as leaders in this measurement, followed by a bunch of countries with 25 % contribution of SMEs (employing less than 50 people), Sweden, Italy, Netherlands, Austria. My home country Finland has the same figure in 10 %! Even in the countries leading the league table there are constantly projects and initiatives aimed at ranking up in the SMEs and export competition.

What could we do? I state that we have a sleeping beauty or a race horse kept in the stable in the hands-on, pragmatic cooperation between SMEs and institutions of higher education. I do not say that because it sounds good in the eyes of my own supervisors, but because I´ve “been there, done that” – In my 10 years in academia after a career in industry I count having 300+ projects of this kind on my belt, and hope more to come. Sometimes failing, sometimes succeeding – and continuously aiming at developing that action further.

Due to the nature of a blog-writing, I do not add any references and research citations in here, but I would like to summarize briefly the drivers that seem to point towards more and better interaction between SMEs and educational institutions – meaning both students and faculty members in them:

SMES:

  • Need to adapt to technologically more and more demanding – and enabling – environment. Both in what comes to their own products and services as well as in their processes making those products and services;
  • To master those technologies and obtain them at the right time, place and cost they need to network with others. Increasingly the most relevant partners are not the ones nearest to you – it is a global ballgame;
  • The better you become, more opportunities there are on the global market, and your international customer might be just a few mouse-clicks away;
  • If and when you have a global opportunity, so does the competition, if you are not prepared to knock the away-from-home doors, someone from out there will knock the doors of your “home customers”.

STUDENTS:

  • Do not even think the way we older generations do. They are cultural and digital savvies, for them the question of home market – or just home – is irrelevant, they tend to think globally in all aspects of life, business included;
  • Want to make meaningful things – do things were the impact can be seen – SMEs are more likely to offer that then a role as a small part in a big corporate machine;
  • Want to meet and learn from and for true entrepreneurship – that can not be done by reading about the subject – live experience is what counts.

UNIVERSITIES:

  • Are required to show their worth and impact: how are you improving life and society around you?
  • Are willing to keep up-to-date with latest advancements – and agile SMEs are always in the front-line showing where the world is going to.

These points are more just examples of our hopefully joint motivation to collaborate rather than the whole story. It would be equally easy to make a list of challenges and showstoppers to the interaction promoted. But just like more generally in life, it is always easy to slip to be running that problem-track. As somebody wisely said “A problem can only be a true problem if there is a solution. If not, then it is a law of nature and you should not spend time on it”. The point is: there always is a solution-track running next to the problem-track. We should run that track!

Members of INSME as well as Universities and SMEs have a lot of good practices to present and share, as well as ideas to develop these issues further. I challenge all readers to share a) everything that we already know that works in making our SMEs more international and prosperous via involvement of academia and global talent in them b) to give ideas for a blueprint of a collaboration that you have not yet seen but feel is needed.

The poet John Donne said close to 400 (!) years ago that “No man is an island”. Today we can extend that statement to companies. Even if there were islands, we would be a part of an archipelago of international business. And the other islands always have something we do not have. And vice versa. Let´s embrace this new order head up – and hands on!


juha-saukkonenJuha Saukkonen | Senior Lecturer of JAMK University of Applied Sciences, International Business

As a faculty-member in his School of Business, Juha is involved yearly in 50+ Education-Enterprise projects and 2-3 larger R&D projects, where SMEs and organization supporting SMEs are involved. He is a member of the Finnish Network Academy in Futures Studies and publishes regularly on the topics of Entrepreneurship, Project-based learning and Foresight. On top of research and teaching duties, he is a certified coach for tech- and knowledge-based start-ups for Supercoach Entrepreneurial Training ® (SET) methodology.

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