Springboarding : A study of Swedish SMEs established in Singapore

Abstract: Background: For Small and Medium Sized Enterprises (SME), international expansion is important strategy for growth. However, considering the facts that SMEs often are characterized by limited personal and financial resources, and that new international markets pose challenges in terms of differences in for instance culture, language and political systems, international expansion is a risky business. We argue that there might be an easier way for SMEs to enter challenging markets and regions through establishing in a springboard country. Such a country is characterized by a possibility to in a westernized context accumulate learning about countries in the rest of the region and also to develop and utilize networks. At the moment, Asia is a rapid developing region and is expected to contribute with two thirds of the world’s GDP in 2050. Hence, the Asian region provides immense opportunities for companies, however particularly for SMEs, also severe challenges. We argue that Swedish SMEs could learn how to overcome these challenges establishing in the westernized Singapore, hence finding an easier way when entering more difficult Asian countries. Purpose: The purpose of this thesis is to explore the phenomenon of SMEs expanding their international activities via a springboard country. This will be done by studying how Swedish SMEs perceive that their establishment in Singapore has affected (1) the development of their networks with other actors in the Asian region, and (2) their accumulation of knowledge and experience regarding doing business in Asia. Method: In order to fulfil the purpose, we have conducted a qualitative multiple case study including seven Swedish SMEs that are established in Singapore. We have primarily used semistructured telephone interviews for our data collection. Conclusion: We found that there is support for the existence of the Springboarding phenomena. We can conclude that Swedish SMEs, by being established in Singapore, can develop and utilize their networks as well as gaining general market knowledge of other countries in the Asian region. We can also see tendencies regarding how these benefits associated with the Singapore establishment can decrease the perceived uncertainties of doing business in other more difficult Asian counties.