SME Internationalization Intelligence Information and Knowledge on International Opportunities

Abstract

Small and medium enterprises (SMEs) internationalization intelligence, referring to the process of gathering information and knowledge on international opportunities, is crucial to initiate SMEs’ internationalization. The literature has stressed organizational resources, networks and information sharing as means to acquire internationalization intelligence, suggesting that the resource-based, network and social capital perspectives can be adopted to explore this issue. However, previous literature still lacks evidence on how SMEs acquire relevant intelligence, and who or what are involved with the process. To address this lack of evidence, we interviewed 54 SME owners/key personnel in the manufacturing sector to: identify sources of internationalization intelligence; examine how those sources assist SMEs to internationalize; and develop propositions on internationalization intelligence. Analyzing the data using NVivo, four themes emerged including institutions, business associates, personal efforts, and other means. The analysis suggests internationalization intelligence occurs mainly through the networks of the SME owners/key personnel, built on their firm’s resources through their internal and external information sharing activities, indicating the need of the SMEs to position themselves in their environments. These findings are developed into propositions. The study indicates multiple perspectives in conceptualizing the process of internationalization intelligence. This study advances a conceptualization of internationalization intelligence, and offers avenues for future research.

The Internationalization of SMEs: Motives and Barriers

“…Uppsala's internationalization model emphasizes knowledge and experience as an organizational learning process that is carried out systematically and gradually 19 . Resource decisions for foreign operations are based on firm's knowledge and experience 20 , the learning process required to acquire and use knowledge in foreign markets 21 . Whereas Innovationrelated internationalization is a model that emphasizes innovation in every stage of the internationalization process, in addition to learning and acquiring company knowledge during the process 19 , this model combines innovations in information, computers, and technology (ICT) as a means to acquire international knowledge 21 .…”

“…This model states that the company's resources are the advantages to getting international opportunities, information and knowledge as internal factors that affect the growth and development of the company 21 . The resource-based view (RBV) argues that competitive advantage is derived from a set of firm resources 22 , identify the potential of the company's main resources, and evaluate whether these resources meet the criteria of valuable, rare, in-imitable, and non-substitutable (VRIN) 2 .…”

“…Network-based approaches to internationalization 2 that are popular among researchers include the Network Perspective and The Uppsala Model Revised. Network Perspective of SMEs Internationalization is an approach that emphasizes interaction with various networks in the international market environment 21 , the network that is built is very important to trigger internationalization 23 , so as to be able to see new opportunities and markets for company performance development 13 . Daszkiewicz & Wach 2 revealed several types of networks for internationalization, namely personal and ethnic, organizational, community, and supplier-buyer.…”

Factors Affecting Propensity to Export: The Case of Indonesian SMEs

“…However, in the case of Indonesia, there are few comprehensive empirical works that shed light on its SMEs' propensity to export, as the extant studies mostly looked at a particular aspect or determinant of export engagement. For example, some studies examined various export enhancing factors including entrepreneurship, human capital and social capital (Sari, 2011;Sari, Alam, and Beaumont, 2008), networking and information dispersion (Revindo and Gan, 2016;Senik and Sham, 2011), the government's industry and trade facilitation (Tambunan, 2009a(Tambunan, , 2009b, product competitiveness (Firmanzah, 2008) and the adoption of information and communication technology (Putra and Hasibuan, 2015). Some other studies rather focused on the export barriers hampering SMEs exports, including Revindo (2018) and Tambunan (2012).…”