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Enabling and supplementing organisational innovation is technological changes and usage capabilities.
Electronic data interchange (EDI) with customers and suppliers, internet-based integration of
manufacturing and service sectors, end-user platforms bringing users of products and services
upstream with producers, enterprise resource planning systems, third party logistics, global tracking
and information systems, are critical technologies at work today. The upshot of the use of such
technological capabilities is the increasing specialisation of production and manufacturing together
with connections with different parts of the value chain across different regions in automobile,
clothing, electronics logistics and retailing sectors. New business models accommodate such
specialisation and connectivity with global lead firms engaged in research and development
(upstream) and marketing, distribution, and post-sale services (downstream), and international
strategic and supply chain partners in charge of the rest of the value chain.
Talent, technologies, institutions remain the key drivers of regional development in a globalised world.
What appears to have changed is the new embeddedness of globalised resources in regions and the
networks of production systems connecting these regions. Enabling much of this change process is
organisational and technological innovation harnessed and activated by the search and realisation of
new opportunities by entrepreneurs (Mitra, 2012).
At the industry level globalisation refers to the degree to which a firm within that industry has its
competitive position interdependent with the competitive position in another country. This global
interdependence allows it to leverage technology, manufacturing, prowess, brand names and capital
across borders. This degree of interdependence tends to favour larger firms such as Nokia, Motorola,
Samsung, Sony Ericsson, Coca Cola, Pepsi Cola Cadbury Schweppes (Gupta, et al , 2008) . However,
this analysis ignores the role of small innovative firms on two counts:
a) the role that many small firms play in sub-contracting work with larger forms or in some cases
licensing technologies to larger firms; and
b) the opportunities for fairly small players to enter the global market independently through the
internet and through portals and platforms such as E-bay or Amazon, and increasingly through
the so-called “Apps” or applications world of web based technologies and Cloud Computing.
Shifting trade: the role of emerging markets
Emerging markets have become the world’s growth centres and source of opportunities for firms in
advanced and developing countries. Emerging economies have experienced sustained economic
growth since the 1990s and have led world economic growth, especially during the recent global
financial and economic crisis and the uneven recovery.
Over the 2000s, the rapid growth of developing countries had a considerable effect on the trade
structure of OECD countries. Regarding exports, from 2000 to 2009, in almost all OECD countries the
annual average growth rate of exports to non-OECD countries exceeded that to OECD countries. As
many governments in OECD countries search for new sources of economic growth, in the context of
stagnant domestic demand and public-sector budget cuts, participation in these expanding growth
markets is increasingly perceived as an important strategy to re-activate growth dynamics.
The drastic changes in global growth and trade dynamics may open up opportunities for SMEs in
international markets. However, the regulatory framework of some high-growth economies makes it
more difficult for SMEs to enter the markets, which can be characterised by an unpredictable business
environment (e.g. frequent regulatory changes, weak protection of property rights, non-transparent
judicial systems and inadequate enforcement of commercial law), and specific institutional constraints
(Luo and Tung, 2007). All these factors create additional challenges for foreign investors and pose an
even greater challenge to SMEs, which are typically resource constrained and less experienced than
large enterprises (OECD, 2013).