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.

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