Innovation and Export. Manon Enjolras
rights of Manon Enjolras to be identified as the author of this work have been asserted by her in accordance with the Copyright, Designs and Patents Act 1988.
Library of Congress Control Number: 2021945495
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ISBN 978-1-78630-620-3
Acknowledgments
This book is drawn from the work of a French doctoral thesis on the topic “Methodology for analyzing the innovation and export capabilities of manufacturing and process SMEs: identification and characterization of a common space with a view to developing a multi-criteria decision support tool”, conducted between 2013 and 2016 at the ERPI laboratory of the University of Lorraine (located in France). They were financially supported by the UIMM, the F2I, the Lorraine regional council as part of the PRINCIP research chair as well as the InnovENT-E initiative of excellence (IDEFI). This thesis has paved the way for new research projects that also feed this book. They have themselves benefited from the support of the CNRS and the University of Lorraine (PEPS Mirabelle CIIPME project), as well as the Lorraine University of Excellence Initiative of the PIA2 from the French government (ANR-15-IDEX-04-LUE).
First of all, I would like to thank the Research Network on Innovation (RNI), as well as the ISTE Group, for giving me the opportunity to publish this book by awarding me the Honoris Causa prize for the promotion of research in the study of innovation. It is a real pride to see our thesis work valued in this way and a great opportunity to continue to develop it within a long-term research project.
I would also like to thank the ERPI laboratory of the University of Lorraine for allowing me to carry out this thesis and for allowing me to build my research path on a daily basis within its team. I would also like to express my gratitude to my two thesis directors, Mauricio Camargo and Christophe Schmitt, without whom none of this would have been possible.
I would like to thank all the practitioners and institutions that agreed to participate, in one way or another, in this work and to devote some of their precious time to it. Thanks to the different laboratories that have been kind enough to welcome me during these last years, allowing me to give an international dimension to this research work: INRPME Trois Rivières, HEG Fribourg, the Industrial Engineering Department of the USACH, the University of San Juan and the National University of Cuyo.
Finally, I would like to warmly thank my family and friends who have always supported me in my projects, both professional and personal.
Introduction
Innovation and internationalization have been identified as two of the main driving forces of economic growth (Pla-Barber and Alegre 2007; Bołkunow 2019). And while globalization has changed the competitive playing field for all companies, this is especially true for small organizations within which available resources are limited (Etemad 2004; Szczepanski 2016).
The internationalization of a company can take several forms: import, external growth, direct/indirect export, etc. For this research work, we focus on a specific mode of internationalization: exporting. Several studies point out that exporting is one of the most common ways to enter the foreign market in the early stages of SME internationalization (Bianchi and Wickramasekera 2016). Thus, throughout this book, we will define exporting as the internationalization strategy aimed at positioning our products and services outside the geographic boundaries of our home country.
Exporting provides an additional source of demand via a larger market or by enabling the creation of a new market (Monreal-Pérez et al. 2012). In addition, international competitiveness helps boost the domestic market and pushes other companies to internationalize (DiPietro and Anoruo 2006). However, international markets are characterized by much stronger competitive pressure than domestic markets (López et al. 2005). SMEs are thus generally hampered by their difficulties in mobilizing the strategic resources needed to enter and succeed in international markets (Etemad 2004). However, if we look at the main figures on the competitiveness of companies, and more particularly small companies, it appears that despite the difficulties they face, SMEs do export. However, although SMEs employ a large share of the workforce, they are under-represented in global trade relative to their contribution to national economies (OECD 2018), particularly in the industrial sector. Direct exports by SMEs account for only 3% of the total SME manufacturing sales, compared to 14% for large companies (WTO 2016). In contrast, the rate of export participation appears to be clearly correlated with company size. The participation of medium-sized companies1 (59%) is higher than that of micro or small companies2 (9% and 38%) and is quite similar to that of large companies (66%) (WTO in English 2016). Thus, it seems necessary to strengthen export support, particularly for smaller structures by helping them better mobilize and optimize their strategic resources.
On the other hand, innovation has always been synonymous with success for companies, but it was generally considered a privilege reserved for some, mainly the large high-tech multinationals. However, the rapid industrial evolution linked to globalization has led all companies to constantly renew themselves in order to more quickly react to the changing conditions they face: shorter product life cycles, changing customer requirements, an evolving technological environment, aggressive competition and environmental regulations, among others. As a result, SMEs, perhaps even more than other companies, are also affected by these challenges. They are therefore forced to integrate innovation3 into their survival strategy. Nevertheless, managing innovation for small businesses in traditional sectors remains a difficult task. Although an SME is generally considered to be an environment conducive to innovation, it is not always successful (BPI France 2011b). Their flexibility seems to be a major asset, but their lack of access to resources and skills can prove to be a major constraint (Szczepanski 2016). Innovation represents a risk for SMEs, and they are not always able to assume it (European Commission, 2016b). Thus, innovation is clearly identified as a success factor for SMEs, but the difficulties they face hinder the proper management of their internal processes.
Supporting SMEs in their innovation and export activities is, therefore, a major challenge. Indeed, SMEs are the most common form of business organization and the largest provider of employment in the world. Indeed, they represent more than 95% of industrial enterprises in OECD countries (European Commission, 2016a). Consequently, they represent an extremely important economic stake and supporting them in their innovation and export efforts is therefore crucial. It seems essential to help them improve their internal practices in order to change their behavior and improve their performance while adapting to the environment in which they operate.
In this respect, there is currently a real political and economic will to take into account the considerable stakes involved in the development of SMEs. All over the world, numerous support services are offered, at the regional or national level, by public and private institutions. However, and despite the important commitment of the European Union and local authorities (innovation and export have been identified as priorities for action at the European level, such as the Horizon 2020 program), support for SMEs in innovation and international activities is not always adapted.
For example, it seems that current support services are mainly represented by financial or informational incentives (Enjolras et al. 2015). If the main difficulties encountered by SMEs, both for innovation and export, do indeed concern access to resources, it is nevertheless worth questioning the relevance of a temporary increase in resources without the organization and strategy necessary for their proper exploitation being put in place. In the case of incentive schemes, the resources provided to SMEs are mostly ad hoc, without the organizational and strategic difficulties associated with innovation and export being really addressed. Several European Commission reports have emphasized that the most effective type of support seems to be individualized support, as it allows direct action on the