Our country is recognised as being one of the most globalised in the world. However, many SMEs are still reluctant to make the move into exports. This publication, co-authored by Didier Van Caillie, addresses both financial aspects and measures to support globalisation in Belgium, and may help them overcome their fears.

'The aim of this publication is to provide a scientific, technical and practical view of the consequences of internationalisation upon how small and medium sized enterprises, as well as very small businesses (VSBs) and individual entrepreneurs operate' explains Didier Van Caillie, Professor at the University of Liège's HEC Management School and Director of the Centre d'Etude de la Performance des Entreprises (CEPE). 'It was conducted on the initiative of the Centre de Connaissances du Financement des PME (CeFip) and addresses financial aspects and measures to support globalisation in Belgium.' This practical guide, which has been published simultaneously in three languages (French, Dutch and English), will be welcomed by companies of all sizes, who face globalisation on a daily basis. This may mean importing or exporting services or products, or dealing with potential competitors who think they are operating in a national market, but suddenly find themselves in an international one. The internationalisation which is addressed in this book is a reality which companies can no longer afford to ignore. Nor can they ignore the risks and dangers associated with it.

Belgium is naturally a country which is open to the global economy. Although more than 70% of our exports remain within the European Union, and three quarters of them go to our immediate neighbours (Germany, France, the Netherlands and the UK), Belgian companies are increasingly exporting more widely (outside the EU). Undoubtedly, as the authors stress, 'Belgium is known as being one of the most globalised countries in the world. Whatever classification system is used, our country systematically features in the top ten. The share of trade in GDP is a good indicator of how open a country is to the business world. In 2008, this index placed Belgium at 85%, ahead of all other OECD countries except Luxembourg. In the space of ten years, this figure increased by 17.4 percentage points, far beyond the OECD average (7.9 percentage points).' There are some drawbacks however: Belgium's share in world exports reduced over the past twenty years, dropping from 3.65% in 1993 to 2.64% in 2011; it still plays an insufficient role in developing countries, the BRIC (Brazil, Russia, India and China) thus represent only 6.6% of Belgium's total exports; Belgian companies export relatively few high-technology products (12% of exports).

Barriers to exports

Many SMEs are still reluctant to make the move into exports when they analyse the obstacles that have to be overcome and the risks that have to be addressed. 'However, fewer companies are reluctant than in the past', says Van Caillie. 'Given the crisis, companies are now more inclined to accept foreign clients. At this time, any turnover is good but, clearly, internationalising operations presents SMEs, VSBs and individual entrepreneurs with a number of risks, notably in terms of payment, which need to be addressed. We address these financial elements in the book. In addition, we also focus on existing government support measures, about which too little is known. Indeed, there are a number of support and assistance mechanisms available to Belgian companies on the regional, federal and European levels.'

An analysis of the strengths and weaknesses (SWOT analysis) of internationalisation focuses on the various risks which companies face. Unsurprisingly, financial risks are a major barrier to export, as well as the risk of non-payment of invoices, which is one of the major causes of companies running into difficulty.  Another risk to be taken into account is commercial risk, which includes delivery deadlines, protection of intellectual property, the quality of services or products provided, etc. Transport risks, exchange rate risks, economic risks, manufacturing risks, political risks and cultural risks also need to be addressed. 'This inventory of risks highlights one fact: the further away an export destination is, the greater the risks appear to be. Within the monetary union, there are no exchange rate risks, for example,' highlight the authors. But where there are risks, there are also opportunities.