SME Internationalization Instruments: Unlocking Global Markets for Europe’s Small Businesses

SME Internationalization Instruments: Unlocking Global Markets for Europe’s Small Businesses

Project Reference: 2022-1-TR01-KA220-VET-000089008

Small and medium-sized enterprises (SMEs) are essential to Europe’s economic framework, accounting for 99% of businesses and employing around 100 million people. Yet, despite their domestic success, internationalization remains a challenge for many European SMEs. International trade, which supports over 90 million jobs in the EU, only sees 30% of its export value attributed to SMEs. However, the EU is addressing these challenges through a series of well-funded and impactful instruments designed to bolster SME participation in global markets.

EU’s Financial Commitment to SME Internationalization

Between 2014 and 2020, the EU allocated approximately €850 million to instruments specifically targeting SME internationalization. Of this, €450 million was invested in the Enterprise Europe Network (EEN), and €30 million supported the Startup Europe initiative. These programs were part of a broader strategy that aimed to equip SMEs with the tools, resources, and partnerships necessary to scale internationally.

Despite the significant financial backing, SMEs have been slow to fully capitalize on these opportunities, with only 30% of total exports to non-EU countries originating from SMEs. This statistic reflects a broader challenge—although SMEs are crucial to the economy, they are still underrepresented in international trade, compared to larger enterprises that can more easily navigate complex regulations and access international networks.

The Role of Enterprise Europe Network (EEN) and Startup Europe

The EEN is the world’s largest support network for SMEs with international ambitions. Since its inception in 2008, the EEN has established a vast network, now consisting of over 600 member organizations across 60 countries. During 2015-2021, the EEN achieved notable success by signing over 2,500 partnership agreements and offering advisory services to 232,348 SMEs. However, while the network has met its primary objectives, it has yet to reach its full potential in promoting internationalization across third-country markets.

Startup Europe, another key initiative, focused on helping high-tech startups navigate European and international markets. During the 2014-2020 period, it reached over 1,000 businesses across 60 ecosystems. However, sustainability remains a critical issue for the program, as many projects ceased after the grant period ended. Without continued funding, these initiatives face significant challenges in maintaining long-term impact.

Bridging the Gap: The Impact of SME Internationalization on Growth

For SMEs, internationalization can be transformative. Exporting businesses tend to grow faster, employ more people, and are more innovative. A study by the European Commission found that 56 million jobs within the EU depend on intra-EU trade, while another 38 million are tied to exports outside the EU. When SMEs succeed in international markets, they directly contribute to economic growth, job creation, and overall competitiveness.

The EU’s efforts are working to bridge the gap between domestic success and international expansion for SMEs. By improving access to information, offering support through networks like the EEN, and financing innovative startups, the EU is paving the way for a more globally competitive SME sector.

Looking Ahead: Opportunities for SMEs

Despite the challenges, the future is bright for European SMEs. With continued investment, strategic partnerships, and greater coordination between EU instruments, SMEs are poised to become major players on the global stage. For SMEs looking to expand internationally, the EEN and Startup Europe offer vital support, helping them overcome the barriers that have traditionally hindered their growth beyond Europe’s borders.

For more information on how your business can benefit from EU support for internationalization, visit the Enterprise Europe Network.