How the Internet Empowers Internationalisation Know-How
When it comes to business, knowledge really is power. Decision making requires a keen understanding of who your target audience is, what your competition is up to and what the capabilities of your own business are. The internet has radically overhauled this process, providing managers with detailed information on all aspects of the consumer journey, real time logistics data and cutting edge innovations. However, one of the most overlooked forms of knowledge is “know-how”. More than just data, know-how is the understanding of how to apply that data to make good decisions. It is the skill and insight of a seasoned professional, the intuition and personal wisdom gained through experience.
Unlike other forms of knowledge, know-how is hard to express or extract. You could write a book about your experiences, host a seminar explaining your intuition, but you would be unable to fully capture the implicit elements of your experience. The skills you acquire, the instincts learnt from your mistakes and triumphs, the subconscious patterns of behaviour that are the result of your lived experience. These are the elements of your tacit knowledge, your know-how, that are ultimately one of the most critical factors behind the success and failure of business.
And while the internet has been a great boon for the creation and dissemination of the explicit elements of knowledge (such a consumer and market data), there has been debate in academia regarding how the internet might be used to create and share know-how. It is well understood that tacit knowledge can be supported through the internet, in much the same way as reading books or talking to mentors has traditionally been used to support developing know-how. However, the interactive and immersive nature of online interaction represents new possibilities, potentially unlocking new ways to develop know-how.
This may be a critical step towards increasing the internationalisation of small and medium enterprise in Australia, as a lack of know-how relating to export markets has been identified as the key barrier to internationalisation. Exploring this topic, this paper examines how the owners of small and medium-sized enterprise acquire and use knowledge for internationalization via internet-enabled platforms.
Method
This study drew on case studies from 13 Australian small and medium enterprise businesses identified from the Austrade database. The owner operator of each firm was interviewed face-to-face, and this data was analysed along with publicly available data (media reports, website data, advertising material) and privately provided data (financial data, logistics details, etc),
Key questions included in these interviews included education backgrounds, international experience both before and during the operation of the firm, the significance of internationalisation to the firm, and the owner’s internet-enabled experiences and the way that the owner used the internet to gather and analyse information and knowledge relating to internationalisation.
Analysis of these interviews was conducted through thematic analysis, identifying sections of the transcript in the qualitative analysis software NVivo, as they related to different theoretical constructs from existing research and themes that emerged through the interviews themselves and the provided secondary data (such as media reports, financial data, etc)..
Key findings
The firms interviewed in this research represented a range of goods and service industries, from jewellery manufacturers and financial service providers to tourism operators and food services. They also represented significant diversity in level of internationalisation, with some firms making the majority of revenue from international markets (with the largest making 85% of revenue internationally) down to firms that had only recently started internationalising the company (with the lowest making 2% of revenue internationally). Analysis of these interviews reveals four differing types of internet-enabled experiences: technical, operational, functional and immersive.
Technical internet enabled experiences are ones that are directly used to accumulate specific information and are used to inform decision-making. This sort of experience is associated with firms at an early stage of internationalisation before online infrastructure is built up, drawing on publicly accessible resources such as search engines and databases. This experience supports explicit data level knowledge acquisition, but did not lead to any growth in know-how, and often required some level of initial know-how to inform information search strategies.
Operational experiences related to optimising the firms’ day-to-day operations. Often these kinds of experiences are developmental, representing the firm’s online infrastructure such as cloud-based financial management (i.e. Salesforce, Zero, SAP), inventory control (i.e. QuickBooks Enterprise, NetSuite, eTurns), and human resources (i.e. BambooHR, Gusto, SAP, Success Factors). These enabled greater internationalisation by streamlining business activity, allowing firms to operate in markets they were not physically present in, while still retaining the ability to provide support and collect data. These experiences can vastly improve a firm’s ability to share information internally, but again do not directly support the development of know-how.
Functional experiences are ones that facilitate business activities online, and typically consist of online interaction, communication and community development. These experiences are often highly social and empower the transfer of nuanced know-how related knowledge through social interaction. Many of the participants of these interviews spoke to the transformative interactions they had with peers and mentors through platforms such as LinkedIn, Meetup, PartnerUp and Xing, that informed their understanding of how to best internationalise their firms.
Immersive experiences were the rarest form of internet-enabled experience, where the technology itself was integral and deeply embedded within the firm’s technical infrastructure and operation. In these firms, often online start-ups, technology such as mobile devices and augmented or virtual reality empowered digital forms of internationalisation. The process of developing and implementing these digital technologies often resulted in huge growth in know-how, with the managers of these firms often highlighting how the lessons learnt from these experiences informed later steps towards internalisation.
Recommendations
This research highlights that the more involved the internet enabled experience is with the actual practice of the business, the more likely it is to be able to support the development of know-how. Technical (such as databases) and Operational (such as cloud-based inventory management) experiences provide greater access to surface level knowledge, which can help inform decision making, but they are hands off and rely on existing know-how rather than supporting its development. Functional (such as social networks) and Immersive (such as digital service delivery) experiences are ingrained and help develop know-how by facilitating hands on deep engagement.
While the internet is an incredible source of explicit data-level knowledge, its capacity to support actual lived-experience through building communities and providing immersive learning should not be ignored. When it comes to internationalisation, a lack of know-how is one of the biggest barriers for small and medium enterprise. This research shows that by incorporating internet-based technology into the actual operation of the firm, managers not only gain access great information to support their decision-making, but also to broader online communities and immersive experiences that can support the development of their own know-how.
