Small companies should love trade policy

In general, one of the hardest parts of business is internationalisation. There are very few ways to do it without costs, and sometimes quite excessive ones.

In the end, the logic is simple. If a small or medium-sized enterprise (SME), ready to go international, feels that the potential increase in revenue covers the risks and costs of internationalisation, it is obviously worth a try.

Yet, economies of scale do not often work in their favour. For a large multinational company, the potential increase in revenue is so big that the costs connected to gaining market access for a product pale in comparison – a luxury most SMEs do not enjoy.

The costs are real and multifaceted. Standards can vary, as do technical specifications and conformity assessments. Furthermore, sometimes certification does not exactly happen overnight – if it happens at all. Finally, even shipping costs favour economies of scale.

Of course, if your business is digital, shipping costs remain low, but barriers still exist. Data does not always flow freely from one country to another.

All this being said, it is not necessarily a huge surprise that according to a study by the European Commission, the vast majority of SMEs in the European Union have never had any international business activities. Now, the data is not up to date but, with a slight leap of faith, I am confident in saying that the situation has not changed a great deal during the last five years.

Unfortunately so, because I believe there is plenty of untapped potential, for example, in Finnish SMEs.

The key to increasing their willingness to export and go international is international co-operation, or in other words trade policy, even if that sounds like a bit of a platitude. But really, there is no other way. Regulators and decision-makers all over the globe should boost the opportunities of SMEs by reciprocally decreasing the regulatory costs and risks related to their internationalisation.

I presume that SMEs agree.