For policy makers, it will be helpful to have an idea about the degree of SME internationalization in their respective economies. A good understanding of the process and extent of internationalization could make policies more specific and targeted. Internationalization is also closely linked with industrial development strategies aiming to improve economic competitiveness.
Indeed, research by the European Commission found that “innovation and internationalization share a positive causal effect in competitiveness22.” Successful born-global SMEs are good examples of this. Measuring SME internationalization though is a challenging task. Various attempts have been made to measure international activities at the micro and macro levels. However, the reliability and validity of these measurements are debatable. Although over 97% of the companies in the APEC region are SMEs23, obtaining data on SMEs’ business activities is not easy.
On one hand, SMEs are usually not part of any representative business association promoting their interests, and many of them do not necessarily keep detailed records of their activities. On the other hand, business patterns are constantly evolving and this makes it difficult to find a sound methodology to measure the degree of internationalization across time.