For Small Firms, the World Has Already Arrived

Jul 11 , 2026
By Workineh G. Abitew

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An SME needs not cross a border to meet foreign competition. For Africa's small enterprises, internationalisation is no longer an ambition abroad but a test of survival at home, argued Workineh G. Abitew (gaworkineh@gmail.com), a doctoral candidate in International Business and an SME Development Practitioner focusing on SME internationalisation, trade competitiveness, and enterprise development.

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A small business does not need to cross a border to face international competition. In many African markets, the border has already crossed into the shop, the supermarket shelf, the mobile phone and the consumer's mind.

For a long time, internationalisation was treated as a choice reserved for ambitious firms. A business was expected to serve its domestic market first, grow stronger, build capital, and improve its systems, and only later to consider exporting or entering regional and global markets. That sequence no longer reflects the reality facing micro, small and medium enterprises (SMEs) in the 21st Century. Imported products, foreign brands, digital platforms, regional trade agreements, global supply chains and rising quality expectations now shape the survival conditions of even the smallest local firms.

Internationalisation is no longer only about going abroad. For many SMEs, it is first about surviving at home.

A local enterprise may never export, open an office abroad, or attend a trade fair. Yet it competes every day with imported shoes, garments, processed foods, cosmetics, detergents, electronics, furniture and packed goods. Customers weigh local products against foreign ones on price, packaging, durability, brand image and perceived quality. In this sense, SMEs are internationalised not only when they go out into the world, but also when the world comes to them.

This is the new meaning of internationalisation, and it is no longer an expansion strategy. It has become a survival imperative. The firm that ignores this does not lose a distant opportunity abroad. It loses customers on its street to a rival it may never meet.

The pressure is plain in ordinary marketplaces. A local soap or detergent maker no longer competes only with nearby factories but with imported brands that offer better packaging, stronger fragrance, wider distribution and more aggressive advertising. A textile producer competes with imported garments; a small food processor with packaged foods that look cleaner and last longer; a furniture maker with imported designs; a retailer with online sellers; and, a training provider with international digital platforms. The local market is no longer strictly local.

In Ethiopia, that pressure is evident in consumer goods, from textiles, processed foods and furniture to detergents, leather products, and construction inputs. Local firms are forced to compete with imports not only on price but on packaging, consistency, brand image and trust. The problem is not confined to export-oriented firms. It is already present in shops, open markets, supermarkets, digital platforms and household choices.

This is a hard reality for SMEs, which are born small, run on limited finances, use outdated technology, lack skilled labour, suffer supply interruptions, and incur high production costs. However, they are expected to compete with imports made under better infrastructure, cheaper finance, stronger logistics, larger economies of scale and more sophisticated branding. The result is not only competitive pressure but an existential threat. Firms that cannot improve quality, cut waste, package attractively, deliver consistently, use digital tools and win consumer trust may not merely fail to grow. They may fail to survive.

This is why internationalisation should be understood differently. It is not only about exporting goods or entering foreign markets. It is a firm's capacity to operate competitively in a market shaped by global forces, and that capacity begins at home.

For African SMEs, especially those in Ethiopia, the matter should be urgent. Regional and continental integration through the African Continental Free Trade Area (AfCFTA) promises larger markets and new opportunities. But a larger market also means stronger competition. Opening rewards firms that are prepared and exposes those that are not. An SME that cannot defend its place at home will struggle to compete regionally. A producer that cannot hold consistent quality, quantity, delivery and documentation will not easily enter formal regional value chains.

This is where policy and business strategy can meet. Governments often speak of SME promotion, job creation, export diversification, import substitution and industrialisation. These ambitions matter. But support should reach beyond registration, licensing, occasional training and promises of credit toward building competitiveness. The policy question is no longer how to create more SMEs, but how to build SMEs that can survive in open markets. Firms need practical help alongside business development services that address the real problems they face in the market.

Banks, too, should stop viewing SMEs only as borrowers with collateral problems and start seeing them as enterprises that need financial literacy, market preparation, working capital and growth-oriented advice. Chambers of commerce, training institutions, development partners, universities, and industry associations should rethink their roles in the same spirit. The critical question is not how many SMEs are created, but how many can compete, formalise, scale and enter wider markets.

The shift also demands a change of mindset among owners and managers. Many still assume that being close to the consumer is enough. It is not. Consumers are more demanding, exposed to foreign brands, online reviews and global standards of presentation. They compare, switch, and reward businesses that give them confidence. In the 21st Century, confidence is itself a form of competitiveness. A product may be locally made, but it should not look careless. A service may be domestic, but it should not be unreliable. A business may be small, but it should not stay informal in its thinking.

Internationalisation, therefore, begins before export. It begins when an SME asks itself hard questions.

"Can my product compete with imports? Can my packaging attract attention, and my price be justified by quality? Can I deliver consistently, earn trust, use digital tools to reach and keep buyers, and meet standards? Can I learn from competitors rather than complain about them?"

These are no longer optional questions. The stakes are wide because SMEs are not marginal actors. They create jobs, support livelihoods, supply local markets, absorb young workers and drive entrepreneurship. If they are overwhelmed by global competition without upgrading, the damage will not stop at business owners. It will reach jobs, incomes, domestic production, industrialisation and social stability. An economy cannot industrialise on the ruins of the small firms meant to carry it, nor can it create work while the enterprises that employ the young are displaced by imports.

The task, then, is not to shield SMEs from competition forever. Protection without upgrading only postpones failure. It is to help them become competitive enough to survive openness, use integration and grow through it. That needs coordinated action. Government should build SME support around competitiveness rather than slogans; banks should tie finance to enterprise upgrading; training institutions should teach practical market-based skills; chambers and associations should supply real market intelligence; and owners themselves should treat quality, discipline, innovation and customer trust as survival tools.

Internationalisation should no longer be a distant ambition for a few successful SMEs. It has become part of the basic survival equation for ordinary firms. The world has already entered local markets through products, platforms, standards, brands and expectations. For Ethiopia and Africa, the urgent question is not simply whether SMEs should cros borders or export. It is whether they can survive at home without becoming internationally competitive.

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PUBLISHED ON Jul 11,2026 [ VOL 27 , NO 1367]

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