Small and medium-sized enterprises (SMEs) are operating in an extraordinary business environment. Increasing globalization, heavy competition, newly empowered customers in new markets, and fast-changing technologies—SMEs are no more immune to these issues than large multinational corporations. Even firms that do not seek geographic expansion must contend with increased competition at home from rivals based outside their domestic markets.
To prepare for this new environment, SMEs are transforming themselves in fundamental ways. Around the world and across industries, they are making major changes to their business models, products, and go-to-market strategies, and using technology to level the playing field with bigger companies.
Many SMEs believe they not only are equipped to compete with larger firms, but actually have some advantages over them. This thinking defies some entrenched stereotypes of smaller companies, which often are perceived as local or regional entities that are largely technophobic, and have at best only a supporting role in international trade. Indeed, “Even in this age of globalization, SMEs . . . are seen acting merely as suppliers to multinational companies,” wrote Bright Simons, president of the mPedigree Network and social entrepreneur, in a February 2013 blog post for Harvard Business Review.
This Oxford Economics study of 2,100 SMEs in 21 countries reverses all of these notions. SMEs are thinking and acting globally, competing with rivals of all sizes—including much larger firms—and investing aggressively in technology to improve operations and make themselves more nimble.
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