Helping SMBs Reach International Markets
SMBs are often local businesses with a single physical location that are thought of as having a regionally limited customer base.
But as documented in a session hosted by the International Digital Services Centre (IDSC) at the Ireland Gateway to Europe Expo held in Boston on March 27, SMBs are actually a critical part of the rapidly growing global digital economy.
‘Micromultinationals’ Fuel Global Digital Growth
According to IDSC data, the total size of the global digital economy is $20.4 trillion, and the global digital economy is expected to create 25.3 million jobs in the next five years. Interestingly, although dominant international IT players such as Microsoft and Google are often assumed to be the primary catalysts of global digital growth, in fact SMBs are expected to create 90 percent of these new jobs.
“Micromultinationals,” or small companies doing digital business internationally, have the same basic needs as any other global digital company. As spelled out by the IDSC, these include aggregating data in one place, generating content, cloud-based computing and analytics, developing and hosting supporting platforms and technologies, accounts payable and receivable, content distribution and delivery, and obtaining the assistance of professional services as needed.
EU Beckons to SMBs
The European Union (EU), featuring 500 million consumers in mostly developed countries using standard currency and business regulations, holds significant potential for globally-minded U.S.-based SMBs. Naturally, most SMBs do not possess the technological infrastructure or knowhow necessary to make their digital content available to consumers or businesses based in the EU.
However, MSPs with a relatively robust IT operations should be able to connect U.S.-based SMBs with EU-based customers, and there are numerous software packages available to help with matters such as currency exchange, international invoicing and billing, and other complexities of doing business across international borders. Of course, there are potential obstacles to this kind of global commerce.
Competing with EU-based MSPs
The main purpose of the Gateway to Europe expo was to promote Ireland as a destination for US businesses to reach customers across the EU, and Irish MSPs do offer a number of advantages over U.S. MSPs, most notably in terms of substantial tax breaks provided to foreign companies that develop, hold and distribute intellectual property from an EU location, rather than a location outside the EU.
However, to achieve the full benefit of tax breaks, US companies can only outsource a portion of their content development operations, and must actually locate a sizable portion of their content development in an EU location. Many SMBs seeking to reach EU customers will be unable or unwilling to take this step, still leaving US MSPs with an opening. Global commerce is not easy, and many MSPs may find it necessary to partner with someone who specializes in handling international business issues, but even a small portion of a $20 trillion-plus market is worth going to some trouble to capture.