Foreign Embassies Internationalization Support for Small and Medium-Sized Enterprises: Need to Balance Innovation Strategy and Innovation Support Policies

Abstract

For American businesses trying to expand internationally, the embassies serve as a crucial component of the innovation ecosystem. By utilizing their close professional relationships with stakeholders like governments, market experts, local consumers, and local public institutions, they boost access to information about international markets. Since foreign markets differ from domestic markets, expanding internationally necessitates adaptations and/or innovations to current business models. An accurate international market study should be the foundation for successful adaptations or innovations. The cost of the assistance provided by embassies appears to be minimal to the firms. From the perspective of SMEs, support policy innovations appear to be required. SMEs don't appear to be in a position to decide which embassy resources they need and take the best advantage to internationalize, given their liability of newness and smallness. This makes it clear that support policies should provide these SMEs with more holistic, organized, and thorough help that is customized to their specific needs, business size, product category, and industry of operation. Additionally, SMEs must align their innovation strategies with the innovation support policies of a nation, which are pushed out through by different institutions, for instance, embassies abroad. As they must take part in SMEs' innovation management processes in global marketplaces, embassies play a role more akin to boundary spanners or co-innovators. Strategic alliances with university libraries may also aid embassies in improving their commercial diplomacy because they can co-create with SMEs to innovate their services and SMEs benefiting from improved globalization assistance.