Managerial Capacity Barriers

Support programs for addressing internationalization barriers related with SMEs‟ limited managerial skills and knowledge are also identified in several countries. Examples of such programs include the 18-month export coaching course offered by UbiFrance, the French Agency for International Business Development; the Export Academy provided by Czech Republic; the 6-month Global Company Development Program offered by the Scottish Enterprise (a sub-national initiative); and the export managers‟ forum available to Greek SMEs.

Network/Social Ties and Supply Chain Links

Network/Social Ties and Supply Chain Links.

A number of recent studies have highlighted the importance of network/social ties and supply chain links in triggering SMEs‟ first internationalization step and extending internationalization processes. Both North American studies particularly reported the stimulating effect on export activity of firms ‟ soft assets, including social and network capital, some of which may have accrued through managers‟ immigrant background and associated links. The study among fish exporters from the Azores Islands, an autonomous Portuguese archipelago in the North Atlantic, some 900 miles from the European mainland, highlighted the importance of family and social ties with emigrant communities in global markets in driving SME internationalization (see Boxes 3 and 4)These include research among American, Australian, Canadian and Portuguese businesses. Kocker and Buhl also observed that taking advantage of collaborative links is a common motive among the firms they investigated across ten OECD countries.
Finally, it is important to mention the value of the linkages back to their birth countries that migrants can bring in arranging exporting opportunities [OECD CFE/SME(2008)5/PART1/REV1].

European Union Direct Taxes

Permanent Establishment is a vital concept in international taxation. While for direct taxes, it is mainly defined by the OECD Model Convention, the European VAT Directive and its implementing Regulation provide an EU-wide approach for VAT.
Difficulties arise as terminology and definitions in indirect and direct tax diverge. Moreover, countries have implemented and interpreted the EU and OECD rules in a different way, impacting on issues like cross-border reorganisations, transfer pricing, taxation of dividends and interest and royalties, tax residence, temporary and permanent transfer of assets, place of supply and VAT liability.
In both direct and indirect tax, the concept of Permanent Establishment has undergone very recent changes: The 2010 changes to the OECD Model Convention and Commentary, and in particular the new Art. 7, will be adopted in national law, as speakers from the Netherlands and Germany will report. The effect of the new definition on treaties with other countries will also be considered.
Some of this topic is addressed in the new book "European Union Direct Taxes", by the International Tax Professor Salvador Trinxet Llorca.
In indirect tax, the current more important issue is the practical consequences of the adoption of the Regulation implementing the EU VAT Directive in January 2011.

Internationalization

internationalization and international entrepreneurship among small and medium-sized enterprises (SMEs) has remained a topic of considerable contemporary relevance, principally owing to the observed growth effects of cross-border venturing, and the demonstrated capacity of SMEs to drive economic development at national, regional, and global levels (European Commission, 2007). This realisation was at the heart of the 2007 OECD-APEC study on Removing Barriers to SME Access to International Markets, which provided general findings on the major barriers to SME internationalization as perceived by SMEs and policymakers in OECD and APEC member economies.1 The need to obtain a greater depth of understanding and an updated view of the issues raised by the OECD-APEC study provided a raison d'être for this follow-up project. Other value adding features include the additional focus on motivations for SME internationalization ; the coverage of recently available documentation from economies involved in the OECD enlargement (Chile, Estonia, Israel, Russia, and Slovenia) and enhanced engagement process (Brazil, China, India, Indonesia, and South Africa); and the sub-national and sectoral insights offered on SME internationalization barriers, motivations and support programs.

The specific objectives of OCDE report about SME Internationalisation

                        i. To analyse in-depth the most significant barriers to SME internationalisation identified from the 2007 OECD-APEC sponsored research on this theme, with a view to uncovering new insights into the nature of these top barriers;

                        ii. To review recent work pertaining to factors that drive or motivate the internationalisation of SMEs; and

                        iii. To develop a deeper understanding of the current programs for SME internationalisation, particularly the specific measures aimed at addressing the top barriers identified.

 

To ensure a greater depth of understanding on SME internationalisation barriers, this study focused on the top four barriers identified by the OECD-APEC study as being by far and away the most serious impediments to SME internationalisation (see Table 1). These include 1) Shortage of working capital to finance exports; 2) Identifying foreign business opportunities; 3) Limited information to locate/analyse markets; and 4) Inability to contact potential overseas customers. A fifth barrier, „lack of managerial time, skills and knowledge‟, is additionally examined. The reasoning is threefold: one, this reflects the importance of this barrier in the Member Economy survey (see Table 2); two, the consistently highlighted primacy of managerial factors in previous relevant global surveys; and three, the widely acknowledged importance of skilled human resources in all areas of economic activity, including market innovation.

To provide an updated appreciation of pertinent aspects of SME internationalisation, the report reviewed the post OECD-APEC survey evidence on the top barriers, drivers and support programs across OECD and APEC member economies and other economies involved in the OECD enlargement and enhanced engagement processes. This has yielded important longitudinal insights, thereby indicating that support programs are appropriately focused on the most resilient and enduring of the factors affecting SME internationalisation.