The Trend of the Micro-Multinationals

Entrepreneurship and micro-multinationalsThe Council on Competitiveness has issued a study on the state of entrepreneurship in America. One of the most fascinating parts of the report is that it identifies a trend toward something called the “micro-multinationals.”

Micro-multinationals are small companies with a presence and people in multiple countries:

When most people hear the phrase “multinational corporation,” they think of large, established firms with subsidiaries in major markets around the world. But a new breed of entrepreneurs is now creating “micro-multinationals” that are global from day one. Vast.com, for example, has 25 employees across five time zones, four nations and two continents. Its executive team is in San Francisco, its CTO is a Serbian who lives in the Dominican Republic, and its development team is in Belgrade. According to the CEO of Vast, “We are building a company in a way that wouldn’t have been possible even two years ago.”

The report goes on to note that not only is a global attitude and approach the right move to find staff to grow the business, but it is seen increasingly as a prerequisite for getting venture funding:

Particularly since the bursting of the IT bubble, venture capitalists have encouraged start-ups to implement global strategies to reduce costs and get to market faster. According to a USA Today survey of venture-backed software startups created since 1999, nearly 40 percent have employees outside the United States. And the global firms received more than twice as much funding from venture capitalists as firms with U.S.-only operations.

Entrepreneurs could not have created many of these companies if they had been unable to leverage global talent. And as these companies grow, they create more jobs in the United States. * * *

The ability of even small start-ups to go global offers unprecedented opportunities to U.S.-based entrepreneurs. But it also means that having a supportive environment for entrepreneurship will become even more important. Entrepreneurs can increasingly choose to develop and finance their new ideas anywhere in the world. Regions whose regulatory systems do not support the creation and growth of new businesses will find entrepreneurial activity (and the jobs that it creates) moving elsewhere.

I’ve observed this trend blossoming in the past few years, particularly among technology and Internet businesses. This idea of the world transforming into one global village is happening before our eyes. The numbers of companies that can be characterized as micro-multinationals is still small, but they are out there.

In fact, in my role as entrepreneur-in-residence (official title Executive Editor) of Creative Weblogging, I participate in a startup that runs 110 content-based websites, in five languages, with writers from over two dozen countries. If it were not for the ability to tap into the talent of people in countries outside the U.S., the Creative Weblogging group would look very different today. Creative Weblogging has benefited hugely from the ability to (1) find skilled highly-qualified people in parts of the world where the U.S. dollar goes farther, keeping costs low, and (2) to develop a global audience by hiring local writers who know the culture and the language.

Download the report here: Where America Stands: Entrepreneurship (PDF).

Note: I am on the Board of NorTech, an entrepreneurship-based economic development organization, and NorTech is a national affiliate of the Council on Competitiveness, which issued this study.

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Anita Campbell - CEO


Anita Campbell Anita Campbell is the Founder and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses, and also serves as CEO of TweakYourBiz.com.

10 Reactions

  1. The Internet and other modern communication systems have eliminated boundaries that previously limited small companies from conducting business overseas. This is a great development, not only for business but also for society as a whole. These “micro-multinational” companies are helping to bridge gaps between nations and bring people all over the world to work on common ventures.
    Good job highlighting such an important topic!

  2. Hi, Anita,

    Mindset is critical to international expansion success. An individual must have a proactive disposition and a high tolerance for ambiguity. If you have both those traits, you’re well on your way to taking on the world.

    Thanks for an insightful post.

    All the best,
    Laurel

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