Transitions towards an entrepreneurial economy: A case study based investigation of the SME internationalization process

There is a need for researchers to re-conceptualize their thinking on the internationalization process of smaller firms (Bell, et al 2003). It is therefore the purpose of this study to generate a theoretical contribution to the rapidly growing field of International entrepreneurship with a specific focus on investigating the process of internationalization of Small and Medium Enterprises (SMEs). This study makes a unique contribution in terms of the actual focus of the study. A substantial portion of the extant literature has focused on the patterns, pace and intensity of internationalization of firms. For instance, the investigation of internationalization of firms and whether they follow a Staged (sequential) as opposed to a Contingency (strategic choice) approach is a well-travelled area of research. Leonidous & Katsikeas (1996), Ellis & Pecotich (1998) and Coviello & McAuley (1999) have all previously published comprehensive reviews of the internationalization of firms with substantial coverage of the internationalization patterns cited above. However, a flaw in much of the literature reviewed thus far is the assumption that firms follow rigid pathways to internationalization. Bell, et al's (2003) empirical work on small firm internationalization indicated that the actual internationalization trajectories of firms are highly individualistic, situation specific, and unique. Each firm's internationalization pattern results from a combination of managerial insights, experience, connections and contacts, network relationships, and informal and formal industry analyses. Despite the advances that have been made in research on SME internationalization in recent years, there remains the need to conduct exploratory, in-depth analysis to generate qualitative insights that will further substantiate the process view of internationalization. The gap in the understanding of these unique, firm-specific processes, which reflects the interrelationships between internal and external drivers of internationalization, is more pronounced in an economy like Australia. Audretsch and Thurik (2003) make reference to a 'fundamental shift from a managed economy to an entrepreneurial economy (p267)' characterized by a rise to prominence of SMEs in global markets. Australia, however, presents a contradiction to indicative trends around the world. It is a wealthy, developed resource-rich nation with observably low SME participation rates in the international arena. An understanding of the internationalization process of Australian SMEs will shed light on what hinders their participation in international markets and will be an important step towards achieving a re-conceptualization of the internationalization process of small and medium-sized firms.