SME internationalisation decision-making: An innovation-based knowledge model

The internationalisation of small and medium-sized enterprises (SMEs) is an important topic in economics, with numerous studies focusing on this process over the past decades. Many researchers have concluded that internationalisation of SMEs is a complex task requiring the consideration of many factors. A key issue in existing research is the insuffi cient attention given to the role of knowledge in the internationalisation process. Despite the recognition of the importance of knowledge, most studies focus on other aspects such as innovation activities, network structures, and management. While these aspects are important, the potential of SMEs remains untapped without adequate attention to the knowledge that underpins successful international operations.

This article proposes a new model of internationalisation based on knowledge-driven innovation, which views international market entry through the lens of knowledge acquired by SMEs and the resulting innovations implemented. The model is based on empirical research with 179 respondents representing SMEs operating in international markets.

The model views internationalisation as a dynamic process in which knowledge-based innovation plays a crucial role at each stage, helping SMEs adapt to international conditions and enhance their competitiveness. The study found that successful internationalisation of SMEs depends on the creation of knowledge-based innovations. Eff ective knowledge management - including collection, storage, dissemination and exploitation - is essential for the development of such innovations. To achieve better results, SMEs should prioritise aspects such as regular knowledge sharing, the use of effi cient information systems, and the involvement of management in knowledge management processes. The knowledge-driven innovation model provides a structured approach to internationalisation, covering the stages of preparation, initiation, and experienced market penetration. 

To successfully enter international markets, it is essential to create an environment where employees understand their role and the importance of knowledge, and where mangement actively supports knowledge sharing and innovation processes. Such approaches will help SMEs achieve sustainable success and remain competitive in international markets.

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