Innovation and Internationalization of Small and Medium Enterprises

Nowadays and for several years, the race to technological innovation has reached its limits. Innovation is now associated with major societal issues: sustainable development, digital economy, renewal of housing and urban planning, mobility, product “servitization” ...

Regarding companies’ international activities, instead calls for protectionism and for reducing the international exchanges, some research works underline that a regulated commerce of a “moderated globalization” is still needed to take advantage of the local comparative advantages and competencies. For example, the Covid-19 crisis has greatly increased the internationalization potential of companies. By radically accelerating the digitalization of business development and trade, reducing delivery and supply chains, and promoting more local governance, it is now providing the opportunity for accelerated and reasoned internationalization strategies that are managed in a more agile and sustainable way. Indeed, paradoxically some international exchanges could be beneficial in terms of environmental impacts (Rajan, 2019).

Thus, reshaping innovation and internationalization in the current evolving environment appears as a joint challenge that SMEs must face. International activities represent a way to diversify sales and reduce risk when domestic sales are slowing down. In parallel, innovation helps firms to adapt their products, processes, and organization to embrace these new opportunities. However, these two activities are generally considered independently of each other both in terms of management within companies and in terms of the support offered by external bodies. A joint and cross vision of these activities nevertheless represents an interesting way of managing the complexity of SMEs under these new circumstances and takes all its importance in the changing context in which they evolve.

How does this new context call into question the dynamics, approaches, and strategies for evolving in the international market? What role does innovation play in pursuing these changes? What skills are now required? What new dynamics still need to be created?

These shared reflections have then given rise to this collective and multidisciplinary book, through which we confront the point of view of management sciences, engineering, and the professional world, to provide a rich and complementary multifaceted insight into innovation and internationalization in SMEs. Based on the experiences of the authors, we thus have had the opportunity to cover different perspectives of the SMEs’ international and innovative capabilities in various countries: Switzerland, France, Spain, Canada, Costa Rica and Chile.

First of all, this book aims to promote the paradigm according to which innovation and internationalization are intimately linked among SMEs, both for their growth perspectives and for their daily operations. Thus, this relationship is explored by the authors in several chapters:

Through Chapter 1, P. Wild and R. Baldegger investigate how international activities impact the innovation capacity of companies. They propose an interesting study on the influence of the Degree of internationalization (DoI), Entrepreneurial Orientation (EO), and Firm Size on the SME innovation performance. Their analysis is based on data from more than 1,500 internationalizing SMEs in Switzerland that were collected over a period of 10 years. Their empirical results demonstrate that SMEs Innovation Performance is significantly influenced by the Degree of Internationalization (DoI).

In the same vein, Chapter 2 is a contribution from the Think Tank “La Fabrique de l’Exportation” co-authored by J.P. David and J.C. Gessler. “La Fabrique de l’Exportation” is the main French think tank dedicated to the internationalization of companies. Its objective is to identify best practices and promote them to French companies and the exporting ecosystem. This chapter aims to explore how and why the international activities of a company induce an increase in its innovativeness. Relying on empirical cases and examples from Canadian firms, the authors illustrate this phenomenon from a practitioners’ point of view and highlight the effects of market and entrepreneurial orientation as drivers of innovative development of companies via their internationalization.

Considering this strong relationship between innovation and international activities, one of the ambitions of this book was also to look at the way in which it was concretely implemented within companies. Several authors have therefore sought to identify the characteristics of innovative and exporting SMEs in order to identify their specificities.

In Chapter 4, G. Benito, J. Pla-Barber and C. Villar, from the University of Valencia contribute to a better understanding of resilient companies through the business model framework. To achieve this objective, they propose a taxonomy of the business model of traditional manufacturing exporting SMEs in Spain, explaining how they have managed to compete, survive and succeed in international markets.

Chapter 5 exposes the case of SMEs’ export performance in Costa Rica. S. Arce, M. Faith and J. Martinez share with us the results of a long-term qualitative and quantitative study over a population of firms regarding factors determining their export. Data obtained from SMEs’ detailed exporting records are used to calculate the Export Performance Index (EPI), enabling the measurement of each company’s export performance. The index considers an SME’s exporting continuity, exporting dynamism, market diversification, and market access conditions.

Chapter 6, authored by M. Enjolras, M. Camargo and C. Schmitt, provides an explorative taxonomy of innovative and exporting companies’ management practices. Considering that the behavior of a company depends both on its own characteristics, but also on the nature of its environment, this study aims to highlight the convergence and divergence of internal practices, exploring a sample of 25 firms and analyzing contextual and structural variables as differentiating factors. Mobilizing data analysis techniques, the authors highlight several companies’ behaviors profiles in terms of innovation and export management, showing specific context- and structure-related orientations.