BRI NEWS The role of 'born global firms'


The role of 'born global firms'


06:05, October 12, 2018


(Photo: VCG)

October 10, 2018 marks the opening of the China International Small and Medium Enterprise Fair, with more than 3,000 enterprises from 39 countries and regions participating. 

In the complex world of international business, corporate giants are visible everywhere. Most Fortune 500 corporations operate in many countries. In comparison, most of the small and medium-sized enterprises (SMEs) remain at home because of their limited resources, capabilities and lack of knowledge about the foreign market.

Despite these challenges in the international marketplace, there is a group of SMEs that remain very active and competitive internationally, these are the companies sometimes called "born global firms."

Born global is a type of company that from the beginning of its establishment pursues a vision of becoming global and globalizes rapidly without any preceding long-term domestic or internationalization period.

The Middle East is a place where many enterprises are created to be global operators, most of them are in the category of SMEs. Historically, merchants in this region have served the vital role of bridging the gap between different places in the world, often in harsh conditions, to transport silk, spices as well as crude oil.

Today, in the increasingly globalized world, these born global entrepreneurs from the Middle East play a new and important role in linking Africa, Asia and Europe.

It is also the key location to implement the Belt and Road Initiative. SMEs here are bringing goods made in China, the world workshop, to different parts of the Middle East and Africa or Europe. One can see how this has manifested itself in Dubai's development as an international trading center.

SMEs clustered here have knowledge about many less developed markets and are able to take the risks needed to serve these markets, where many large companies find it too costly to do so. To keep this momentum, it is the right time Middle East countries to serve as an official partner at this year's China International Small and Medium Enterprise Fair.

One of the merits of SMEs is that corporate giants are often born among them. Less than 20 years ago, Jack Ma, the founder of Alibaba, started a small company to sell goods to foreign clients by sending e-mails. Once he found the right business model, the company exploded.

In that sense, most of today's corporate giants were born small. Microsoft, Apple and Tencent were all once small companies. A healthy number of SMEs are the foundation in building an innovative economy.

Because SMEs lack some resources, their survival demands better ideas, better products and right business models. 

SMEs may face additional risks by joining the global value chain, the exposure to the global market will also create opportunities that are not available in domestic markets. The success belongs to those with a brave heart.

As Charles Darwin wrote in 1859, it's a survival of the fittest.

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