Acronym

One of the more interesting facts among international business trends is that every year since the late 1980s the greatest increases in international trade and investment are to be found not among the large multi-national corporations, but among small and medium size enterprises (SMEs). The largest share of international trade and investment is still held by the largest multi-national companies, but this position is being eroded and eventually will be overtaken by the SMEs.

To borrow a line from Ernest Hemmingway, “The curious thing is that [they—the SMEs] should be here at all!” Without teams of lawyers and thousands of professionals on the payrolls in bricks and mortar structures around the world these small and medium size companies have been able to indentify and exploit opportunities in foreign markets—in many cases, even before the corporate giants know what has happened!

In the early 1990s Deloitte Touche Tohmatsu did a study that examined this phenomenon. Bear in mind that this was the time when the Soviet Union imploded, Europe’s Iron Curtain came down and serious trade for the West was opening in China. What the Deloitte study found was that the largest companies had too many investments in established markets that bogged them down and made them too slow moving to take advantage of these new opportunities as rapidly as did the SMEs. But without any international infrastructure of their own, how did the SMEs do it? The Deloitte study found that SMEs essentially formed partnerships using networks of contacts available to them through the associations and chambers of commerce to which they belonged.

“The Power of Partnership” discusses this tangentially, but I think it could be the subject of its own book ...