Why Are US Manufacturing SMEs Behind the EU SMEs in Export?

Feb. 9, 2014
American SMEs have a lot to do to catch up their EU counterparts in export business.

SMEs accounted for approximately 31 percent of the total manufactured goods exported by the EU in 2005, whereas SMEs in the United States accounted for only 13 percent. Unfortunately I do not have more fresh information, however, I do not think these proportions have changed considerably.

Generally, in the USA manufacturing SMEs account for a considerable smaller share of employment than in EU.

I feel that American SMEs could do much better than this and consequently USA as a manufacturing nation.

I do not believe in government programs, regardless who initiated them. My experience from Europe is that these programs tend to be money drains for SMEs. They are build by highly paid consultants and government officials, who  rarely have experience of real life SMEs.

American SMEs contemplating to start or increase export activities do perceive that there are many barriers. According to a US government study, some of the reasons are U.S. government regulations, access to finance, lack of economies of scale in own production, as well as transport costs.

I personally also believe, that large US corporations could have also favored more American SME suppliers, while off -shoring and re-shoring. Germany’s large corporations are a good example. Large corporations in Germany really do pull the SMEs into the export business. While large US corporations are off- shoring to EU, do they require and support their suppliers, American SMEs, to establish a European production location?

USA has been for a long time a single market. In Europe only recently borders have disappeared. For decades European SMEs in small countries had to find ways to export. There is less “export tradition” among American SMEs.

Exporting is not expensive and difficult. But it takes a whole lot of extra efforts in addition to your daily activities, plus some healthy patriotism from larger US corporations.

About the Author

R. Paul Vuolle Blog | CEO

R. Paul Vuolle's blog "The SME's Guide to European Manufacturing," has moved. You'll find his latest ideas and commentary on SME European Manufacturing on IndustryWeek's IdeaXchange. 

You'll find more articles written by Paul at http://www.industryweek.com/blog/smes-guide-european-manufacturing.

R. Paul Vuolle, CEO of Bellevue SME Advisors GmbH in Switzerland and Germany, works actively with small and medium (SME) size manufacturing companies in Europe in SCM/Outsourcing, logistics, turnaround and restructuring, market expansion, as well as succession planning and financing. He also frequently supports technology start- ups in building up their business. 

Paul has over 20 years operational industry experience in engineering, electronics, industrial automation, building automation, investment goods like electrical drives, automatic test & measurement systems, HV Transformer production systems. During his career he has worked in manufacturing industries in supply chain management, outsourcing, logistics, production, R&D and successfully selling to international large key accounts. Paul has also run a sizeable amount of M&A transactions in numerous countries around the world.

He has built up his experience working in various leadership positions and functions in large corporations, such as ABB, and having executive positions in medium-size family companies and as a technology entrepreneur.

Paul is MSc. E.E. from Swiss Federal Institute of Technology in Zürich as well as BSc.E.E. from Helsinki Institute of Technology.

Paul is a long time member of IEEE and of its Industrial Applications Society.

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