The internationalization process of entrepreneurial SMEs in high technology niche market segments

This study seeks to make a theoretical contribution to the rapidly growing field of

International Entrepreneurship by investigating the process of internationalization of Small and Medium Enterprises (SMEs). Bell, McNaughton, Young & Crick, (2003) emphasized the need for researchers to re-conceptualize their thinking on the internationalization process of smaller firms.

While there has been substantial research done on the small business internationalization and how the participation of these firms in the global economy has fuelled economic growth in a number of countries (Audretsch & Thurik, 2003; Acs, Randall Morck, Shraver & Yeung, 1997; Storey, 1994; Alam & Pacher, 2003), there is tangible evidence that SMEs in Australia are not keeping up with global trends. Studies conducted on Australian firms allude to the following reasons for their constrained presence in international markets: (i) geographic and psychic distance; (ii) costs disadvantage; (iii) overdependence on inward FDI from large foreign multinationals; (iv) a history of inward-looking and narrowly focussed economic development policies of the Australian government. These factors had the combined effect of imbalanced economic growth which was particularly detrimental to the small business sector (Australian Trade Commission, 2002; Maitland & Nicholas, 2002; Alam & Pacher, 2003).

Despite the identified obstacles, some Australian SMEs have succeeded in penetrating international markets. This study involved a preliminary qualitative investigation of selected Australian SMEs and their unique internationalization process. Evidence from the case study based investigation will indicate that the respondent firms have leveraged on entrepreneurial qualities to overcome the obstacles and enhance their success in international markets. As such, the internationalization process for these selected firms is seen as an extension of and integral to their entrepreneurial behaviour.

Using the lenses provided by relevant facets of the entrepreneurship, internationalization and strategy scholarly fields, this exploratory qualitative study, while building the foundation for further empirical research into the internationalization process of SMEs, can serve as a guide to researchers for ascertaining future directions in this emergent field. The findings from the study are intended to contribute to a body of knowledge encompassing the cross-border operations of SMEs. The research also has value from a practical perspective as Australian SMEs can draw from this body of knowledge as they pursue opportunities internationally.