International trade is a key engine for growth and welfare. This is particularly true for France, Germany, Italy, Spain and the United Kingdom, which are not only the largest economies in Europe but also among the largest traders on the continent. Together they account for more than half of all intra- and extra-EU trade flows.
An important part of these exports and imports is driven by large firms and multinational corporations. Small and medium-sized enterprises (SMEs), in contrast, are underrepresented in international trade. In fact, SMEs represent the vast majority of firms in Europe and provide two out of three jobs – but account for far less than half of all exports and imports. When it comes to other forms of internationalisation, such as foreign direct investments, participation of SMEs is even more limited.
This means that many SMEs are missing out on the benefits often associated with internationalisation - higher productivity, faster growth, greater innovation and better chances of survival.
The obstacles SMEs face when expanding abroad are diverse and they differ across countries. However, there is a common issue that emerges in all countries: access to finance. Although financing conditions have improved in most European countries in recent years, SMEs continue to be at a disadvantage when it comes to getting external capital.