The technology sector is a staging ground for new ventures that are born global. Anchored around knowledge and innovation, new technology firms launch with a global niche in mind even before operations begin. Essentially, these firms are the ones that internationalise rapidly.
International by Design
From day one, new technology ventures focus on targeting global niches and aspire to develop a global presence in the next two to three years. These firms have distinctive characteristics which easily satisfy a global niche. Compared to their domestic counterparts, born-global firms easily adapt to business ecosystems that allow them to develop a global presence in a short period of time.
Characteristics of Born-Global Firms
In a study published in the Technology Innovation Management Review, the author underlines eight distinctive characteristics that born-global firms possess. He notes that these firms internationalise rapidly because they
- Have limited tangible or financial resources
- Have strong presence across most industries
- Active in international markets
- Adopt differentiation strategies
- Engage in direct international sales
- Develop new products with superior quality and have few trade barriers
- Serve highly-specialised buyer needs
- Founded and managed by entrepreneurs with a strong international orientation
Domestic Vs Global Firms
While many entrepreneurs thrive in domestic markets, those who possess a strong international outlook thrive in both domestic and global ecosystems. They invest heavily in knowledge-based markets, take big risks and continually innovate.
Even new ventures that start with limited funding, easy loans or venture capital develop an edge of their industry or product category. They tend to outgrow the market in their home country,
Researchers also put emphasis on the importance of ecosystems. New Zealand, for example, is an ideal staging ground for global start-ups because its government and multicultural community facilitate a global outlook.
There are quite a number of conditions that influence that rapid globalisation of such ventures. But the level of knowledge and expertise of its managers and organisational capabilities give them a global competitive advantage.