An Examination of the factors hindering Irish SMEs from going Global

The purpose of this study is to investigate the barriers that hinder Irish SMEs from entering foreign markets. An analysis of these factors may identify why there are so few SMEs in Ireland engaging in exporting activity. This involves examining the owner/manager’s level of education, methods of selling product/service’s and the barriers to entering foreign markets. This study is unique as it is the first of its kind to investigate the topic of SME internationalisation in the South East region of Ireland and the country as a whole. For the current study’s primary research a positivist methodology was employed using quantitative methods. The primary data for this research was ascertained using a survey based method administered to 224 SMEs, with a response rate of 37%. The survey method enabled the researcher to establish information as regards industry sector, levels of owner/manager education, understanding exporting, methods of selling products/services and barriers to entering foreign markets. There are a number of important findings, which have emerged from the current research. Firstly the research findings have indicated that similarities do exist between exporting and non-exporting SMEs. Both groups of SME owner/managers had similar levels of education, reasons for wanting to enter foreign markets and the perceived barriers to going global. Another key fact found during the course of this current research was how many exporting and non-exporting SMEs did not understand the true meaning of the term exporting. While 100% stated they did understand the term only, 4% of exporting and 11% of non-exporting SMEs identified the term correctly. As regards education while Maslach (2005) stated that advanced education was needed to enter international markets, it was found that 69% of exporting SMEs entered foreign markets without having advanced education. Previous literature has suggested that the SMEs most preferred method of selling was through word of mouth therefore, it was interesting to find, in this current study, that 64% of non-exporting SMEs used this method while only 26% of exporting SMEs utilised the same method. It was found that 63% of exporting SMEs preferred to network their business as it provided them with more business contacts and linkages outside the firm. Finally, this research has also identified that the perceived barriers of non-exporting SMEs to entering foreign markets are the same obstacles that exporting SMEs have overcome. Forfas (2004) stated that SMEs lacked the proper education in sales and marketing in order to enter foreign markets successfully. The current results supported this as both exporting and non-exporting SMEs cited lack of marketing as a barrier to going global. However, while exporting SMEs cited marketing as a barrier they still managed to enter foreign markets successfully therefore, it could be said that, there is no reason why all SMEs cannot enter international markets. From the beginning, this research has set out to establish the factors that are hindering Irish SMEs from going global. The current research will therefore, add to the expanding body of literature on SME internationalisation, but more importantly it contributes to the developing field that is focussed on SMEs and exporting. This current research has highlighted the fact that similarities do exist between enterprises that export and those that do not engage in exporting activity. Therefore, this research has implications for researchers, enterprise support agencies, policy makers, providers and teachers of enterprise education, entrepreneurs and governments.