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SMEs Need to Adapt to the Changing Global Economy: Reaching New Markets
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SMEs Need to Adapt to the Changing Global Economy: Reaching New Markets

The global financial crisis has created some fundamental problems in the developed countries, and the economic development models based on high consumption have failed at providing remedies. The conventional economic policies to stimulate the national economies have not yet created the desired results. Even further, some economists claim that a new era has started in the global economy, meaning the conventional economic theories have to be reconsidered. It is easy to observe that capitalistic economic development has ended up with an increasing gap between poor and rich countries. In the last decade, the number of people in the middle-income class has been dramatically increasing, even in developed economies. In other words, capital-oriented economic development has enlarged the middle-income class, and reaching the middle-class is becoming an essential solution for producers in need of reaching new markets. The most recent global financial crisis has changed the middle-class’s perception of needs, and SMEs need to pay attention to understand the changing needs of the middle-income class.

The increasing income inequality, armed conflicts, and immigration are some of the main items in our agendas. Recently, the outbreak of the COVID-19 virus has proven to us that we are experiencing a new stage of human development. The world is globalized, and the development efforts of humankind has created irreparable damages in nature. On top of that, efficiently allocating resources has become a relatively more important issue. There are some surveys and studies indicating that the new generations born after 2000 are more interested in the protection of the environment. Due to lower earnings and a difficult job market, young people prefer experiencing and learning, and do not have the same perception of saving and investing attitudes of their parents. Purchasing a house, having jewelry, or investing in long-term bonds and other securities are not among the privileges for many young people. The new generation is aware that we as humans have crowded the globe, and natural resources are scarce. The term “sustainability” has gained more importance in today’s world. Subsequently, in a highly populated world, a large portion of the world population is trying to survive as a member of the middle-income class or the low-income class. These conditions are shaping the behaviors of the consumers at the current time.

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Understanding the conditions in a globalized world and the corresponding changes in consumer behaviors is crucial for SMEs to compete in their markets and survive. Although there are some important differences between the consumer preferences in the different countries, there are some essential common points. Any SME willing to be a part of international trade needs to understand the global trend and the local trends to be competitive. The traditional ways of trade might fail to survive. Simply put, the effort spent for understanding the needs of customers has become a vital factor for success for SMEs.

A new kind of customers from the middle-income class with environment sensitivity are the largest customer group. SMEs that want a successful trading experience need to adjust their products, services, and marketing strategies based on the needs of this new kind of customer. In the past, minimizing production costs at the expense of exhausting natural resources and supplying relatively less expensive products has been the way to succeed. Many multinational companies preferred outsourcing their productions to the developing economies where labor and natural resources are relatively less expensive. Even further, some SMEs have served multinational companies by producing for them in the developing countries. However, nowadays, sustainability has become more eminent, and continuing the conventional strategies ignoring sustainability is not considered as a good strategy.

Although there are a few kinds of sustainability theoretically, there is no certain practical definition of sustainability. Sustainability has social, environmental, financial, and economic aspects, and it is quite complex to cover all those simply in one concept. Working on the needs of the customers at the current time will teach us more about sustainability under the conditions of our today’s world.

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