International trade and investment drives economic growth, increases profits and expands corporate horizons. From the mid-1980s through the end of 2015, international trade grew by over 7% a year – twice the rate of growth of GDP. That growth was based not only on a wider acceptance of free market attitudes and falling trade barriers but also on reduced transport costs, geopolitical changes and advances in technology and communications. While the landscape has changed dramatically since 2015 with challenges to the World Trade Organization, implementation of new tariffs in some quarters and the renewed emergence of nationalism in many countries, the opportunities attendant to export promotion remain significant.
Stef Wertheimer, the founder of Israel’s Iscar Industries which was bought a few years ago by Warren Buffet’s Berkshire Hathaway Group for $6 billion (in two tranches), once commented: “Achievements in successful export industries, which need highly skilled people, can create an area as flourishing as South Korea and Singapore.”
Foreign sales are a sine qua non for major business growth but trade issues for businesses can be every bit as complex as those of sovereign governments. Exporters need to identify, assess and enter export markets, find reliable partners and ensure that their overseas investments face minimal risks.
But how does an average small to medium sized enterprise (SME) enter the arena of international trade with minimal risk? In our 27 years of business experience, we have found that the ideal way to do this is to rely on local “guides” who can help accompany SME’s through the intricacies of doing business and conducting trade in foreign markets. These “guides” can take the form of consulting firms, industry associations, government agencies and others who can provide SMEs with market information, familiarize SMEs with the market’s business practices, design market entry strategies, identify potential business partners, arrange meetings/visits, organize trade exhibition support and more.
One network of “guides” is the International Business Group (www.ibgglobal.com), an association of 22 business development and consulting companies strategically located around the world, covering over 150 country markets. [Full disclosure: Our firm is a founding member of the group.] During the 15 years since the group was founded, IBG members have successfully handled a total of over 47,000 export promotion projects while simultaneously generating over $5 billion in inward capital investment for governmental economic development organizations.
Networks such as IBG can provide a whole host of services that minimize risk while maximizing the potential for success. Typical services include:
• Company/product assessment and marketability reviews
• Target market identification, market and competition analysis
• Market entry strategy and goal setting
• Agent / distributor & partner searches
• Market development
• Investor Searches and Matching
• Trade Missions
• Trade and Investment Exhibitions and Events.
So what is the major barrier to SME’s making the decision to pursue further export promotion activities? Clearly, it is fear of the unknown whose catalyst is not having a level of confidence and trust in people whom one has never met. Why should an SME trust a consultant or other “guide” from another country?
This is why it is critical for SMEs to identify appropriate supporting players whom they can trust in each of the target markets. An established business development consultant network with worldwide coverage and a solid reputation like that of IBG is a terrific solution for providing trustworthy partners in a range of markets.
Apple’s founder Steve Jobs said: “Great things in business are never done by one person. They’re done by a team of people.” In the same way, wise SMEs can seek out appropriate “guides” abroad in order to identify and seize the countless business opportunities in world markets. The future is waiting to be grasped.
Sherwin Pomerantz is president of Atid-EDI Ltd., an economic development consulting firm with 26 years’ experience in assisting overseas companies and public entities in their export promotion and foreign direct investment attraction efforts.