Success factors of an outward-looking business policy and the role of the State
Published on 23/2/2017
The main subject of exports in any case are private enterprises. Their mobilization, however, can be not only self-sustaining, but also a result of the coordinated effort of the state, which is called upon to intervene and to remedy free market dysfunctions within an internationalized economy. The role of the state must in all cases be as effective as possible to support the exporter in ensuring minimum conditions, such as ensuring a stable macroeconomic environment and access to appropriate information and sources of finance.
In particular, the nature and extent of public intervention in the context of export policy is linked to the country's macroeconomic aggregates, the degree of employment of its existing productive potential, its growth potential, international economic conditions and technological developments, the capacity of private initiative and the adaptability of entrepreneurship to changes in demand in a globalized environment. In this context, the state sometimes appears simply as a facilitator and supporter of the business community in achieving its export choices and goals, and sometimes assumes a more active role.
Large businesses usually have the resources needed to explore their export capabilities, as well as approaching and penetrating international markets with a relatively reasonable burden on their overall costs. On the other hand, for small businesses the cost of investigating their export prospects is disproportionately large in relation to their size and cost of production. This is true even in cases where they have excellent products but also the human and financial resources to explore the possibilities for export activity.
In Greece, the potential for expanding the export base mainly concerns small and very small enterprises, mainly family, with low production capacity, introverted administration, and limited working capital. The above data, coupled with the unfavorable economic environment and the financial sector's inability to respond to market needs, necessitate public intervention, whose role is a priori decisive in boosting the country's export footprint.
In this context, the state is called upon to undertake those initiatives that are deemed necessary to meet established needs, mainly due to weaknesses of public bodies or to failures of the free economy (eg inadequate information) to design measures which are intended, but not limited to:
  • inform entrepreneurs about issues concerning foreign markets,
  • the continued support of exporters, both in their exploration of their potential to operate in foreign markets, and then at each stage of the export process
  • improving the skills of businesses in terms of exports,
  • organized market approach through strategic planning,
  • eliminating entry barriers to foreign markets,
  • the direction of enterprises in the production of products with export orientation and high added value
In addition, the state is called upon to ensure that the necessary financial resources are made available to support and strengthen the engagement of outward-looking businesses on international markets. Given the current difficulty of business access to bank finance, the role of state tools to enhance outward-looking entrepreneurship through grants and receipts from EU Structural Funds, and through funding instruments from other actors, However, the specialization of aid should be systematically directed towards the achievement of export policy objectives.
During the current economic crisis, exports are often the only way out of existing businesses that have experienced a significant drop in their domestic sales. Through the promotion of exports, affected Greek businesses can maintain their turnover, activity levels and jobs. Furthermore, given the shrinking of the internal market, the development of extrovert entrepreneurship should evolve into a firm strategy and selection of Greek businesses and not only a solution to the crisis and an antidote to it.
Therefore, broadening the export base of the economy and fully exploiting the country's high level of human resources are the most important prerequisites for transforming the Greek economy towards a new sustainable growth model based on production, innovation and extroversion. In this context, an effective national export promotion strategy should have as ultimate objectives:
  1. increasing exports, and in particular:
  • consolidating and further increasing the market share of exported products in traditional export markets,
  • the penetration of the existing product mix into new markets,
  • expanding the product mix of exports to diversify exported products and enrich them with new products, high added value and knowledge and technology intensive.
  1. attracting foreign investment funds that will be directed to expanding the export-oriented production base, mainly in areas of high value added and knowledge-intensive technology.
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