Export Consortia in Developing Countries. Successful Management of Cooperation among SMEs

Small and medium-sized enterprises (SMEs) are highly significant in both developed and developing countries as a proportion of the total number of firms, the contribution they can make to employment, and their ability to develop innovation. The internationalization of SMEs is an increasing global trend and attracts the interest of not only academic researchers, but also policy-makers, as it is seen as an important means of enhancing the long-term growth and profitability of SMEs. Governments are interested in setting up support programmes which enable firms to increase their export sales, given the positive effects that increasing exports has on the economic growth and competitiveness of countries. SMEs suffer from a number of major internal barriers to export related to their limited resources and lack of competences necessary to meet the challenges of the new business environment. This is particularly true of SMEs in developing countries, where relatively few entrepreneurs have international experience or a high level of management education. Compared to those in developed countries, firms in developing economies have fewer managerial resources and fewer private or public support services. Both these factors negatively affect their ability to go international. It is widely acknowledged that firms are able to increase their export potential by leveraging on networks or collaborative strategies. Export consortia represent specific network arrangements, based on domestic collaborative relationships, which are well-suited to the characteristics of SMEs. Export consortia generally involve SMEs which are characterized by complementary and mutually-enhancing offers, and may be sales- or promotion-oriented. Consortia of SMEs can facilitate solutions to export problems and enable the loosening of the constraints related to the investments needed to penetrate foreign markets. However, the successful management of cooperation among SMEs in the form of export consortia makes it necessary to pay careful attention to the distinctive features of these networks. Although the importance of cooperation for the international competitiveness of small firms in both industrialized countries and developing countries is widely acknowledged, the interest of academic research in export consortia has until recently been very limited. They continue to be almost completely unexplored in academic publications. Export consortia appear to be one area of professional practice that management research has not been able to analyze, despite its economic relevance and social implications. This publication aims to fill this gap in management literature. The book analyzes export consortia from the strategic management perspective. It builds on an empirical analysis of nine export consortia promoted by UNIDO (United Nations International Development Office) in developing countries between 2004 and 2007: four in Peru, three in Morocco, and one each in Tunisia and Uruguay. Besides reviewing the academic literature and discussing models for the management of export consortia, the book is based heavily on actual export consortium experiences, in order to combine a rigorous research approach with a more pragmatic view of the phenomenon. The material presented here will be of interest to a variety of different readers. Scholars in the field of management represent our primary target. We include a literature review which combines the topics of SME internationalization, strategic networks and alliances, and the issues which relate specifically to SME alliances in the form of export consortia. Entrepreneurs and executives involved in the internationalization processes of SMEs will find useful business models and management tools for the successful design and implementation of export consortia. This is also the case for management consultants who support the international expansion of SMEs, and whose role is often crucial in the start-up of export consortia. Insights into the functioning of export consortia may also be of interest to policy-makers and institutions that develop support programmes for the growth of SMEs in developing countries. Given the relevance of internationalization as a driver of competitiveness at both micro and macro level, policy-makers from developing countries are increasingly interested in setting up appropriate systems of incentives and support services that can enable firms to grow and be successful in foreign markets. For this reason, there is considerable benefit to be gained from a deeper understanding of export consortia and a better comprehension of the mechanisms that favour the successful management of cooperation among SMEs.