Why Startups Should Internationalize: The Role of Governments and Public Institutions

By Mariola García-Cañada Candela Published on Apr. 30, 2024

In the current interconnected global economy, startups are powerfully driving innovation and energizing the entrepreneurial paradigm. However, the challenges they face when trespassing their activities into international markets might limit their expansion. The immense contribution of startups to national growth and global innovation is fostering the support of public institutions and governments in the internationalization of such enterprises.

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Analyzing how internationalization creates this mutually advantageous relationship between governments and startups and exploring how it fuels mutual growth and the dynamic strategies that should be undertaken to facilitate startup internationalization is vital to understanding the role governments have in improving the process.

Internationalize startups: A mutual growth opportunity

Startup internationalization represents a beneficial situation for both governments and startups. For startups, exposure to diverse markets and cultures nurtures innovation, enabling them to adapt to new environments and redefine their offerings. Furthermore, entering global markets unlocks new revenue streams, reducing their reliance on a single market and enhancing their competitive resilience. The creation of an international work environment will also bring innovation to the foundations of the company, contributing to its internal and external growth.

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On the other side, governments gain substantial benefits from enhancing startup internationalization. One of the most significant advantages is the strengthening of diplomatic ties with other countries. Collaborations between governments to support startup initiatives and open their frontiers to entrepreneurship lead to closer relationships, facilitating international trade and economic cooperation. The global expansion of startups will attract foreign investment and talent, bolstering the host and new country's economy and contributing to job creation by offering the latest generation greater opportunities to access the labor market.

The increased collaboration between countries will not only be limited to economics but also facilitate mediation and foster global understanding. Startup interaction with markets from abroad helps bridge cultural gaps and foster cross-border conciliation. Moreover, startup internationalization allows countries to remain adaptive to global shifts, equipping them with the necessary tools to react promptly to new market trends and technological advancements.

Internationalize catalyst: Government support

Nevertheless, the road to startup internationalization encounters considerable challenges, from cultural barriers to administrative complexities, limited training, lack of resources, and weak entrepreneurship initiatives, posing government support as a pivotal factor in catalyzing access to new markets. Startups need governments and public institutions to assist them with the necessary resources, guidance, and networking opportunities to navigate the challenges internationalization poses successfully.

This is the reason behind the notable approaches governments are undertaking with the establishment of training programs, incubators, and accelerators in their agenda. With these government-backed initiatives, startups are offered tailored guidance, mentoring, and access to networks of industry experts. By providing startups with the necessary skills and insights, governments facilitate their entry into foreign markets, offering them a range of possibilities and opportunities. Additionally, having an active approach to educating young entrepreneurs is crucial to nurturing a culture of innovation and entrepreneurship. By fostering an entrepreneurial mindset in the young leaders, governments prepare the next generation to take on global challenges and seize international opportunities.

Plug and Play: The propulsor for startup internationalization

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Although there is a global willingness to support the internationalization of startups, the difficulties in the journey tend to limit the startups’ predisposition to move their activity abroad. Governments, as catalysts for internationalization, might not have the capacities and resources available to support internationalization and need a third actor to achieve the startups’ expansion in the global sphere successfully.

Within Plug and Play, we’ve been very active in facilitating and supporting public authorities, governments, and startups to enter new markets with our Global Overseas Acceleration and Learning (GOAL) program. Through this platform, startups from around the world are given the opportunity to enter international markets with the support of Plug and Play’s experts in critical pillars such as business development, fundraising, and expansion techniques. During the program, startups engage with potential customers and partners, access funding opportunities from external venture capital and angel investors, gain traction in the new market through workshops, mentorship, and pitching sessions, and achieve the opportunity to expand internationally. Additionally, through this program, start-ups get acquainted with the legal and fiscal framework of the country they want to establish a presence in. This greatly facilitates their soft-landing in new markets. The GOAL program, supported by public authorities or big corporations, outlays the place third-party innovation platforms have in guiding startups’ entry into the global market.

internationalize startups_Modena Motor Valley Accelerator EXPO

The support innovation platforms can offer for the internationalization of startups is demonstrated with measurable results obtained through Plug and Play’s GOAL program, which, through its efforts, managed to facilitate 83% of startups to enter into strategic negotiations with at least one corporate, 70% to enter into strategic talks with at least one investor and contribute to the creation of more than 400 jobs a year. This data exemplifies the push innovation platforms can give to public authorities in surpassing the difficulties they may encounter in their journey to internationalize the entrepreneurial market. Furthermore, it is also an example of the benefits startups and governments can get from internationalization, demonstrating the importance of taking this step forward.

The reciprocal relationship between governments and startups in fostering internationalization enhances economic growth, innovation, and cultural transformation, leading to the creation of an open and global society. As governments recognize the value of startups in the worldwide sphere, they are proactively providing them with the necessary support and infrastructure to thrive on the international landscape.

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Through strategic partnerships that offer to mentor and facilitate startup access to global markets, governments are empowering startups to transcend borders and achieve success beyond their headquarters while boosting their reputation and diplomatic ties. As a result, the scenery of innovation is becoming increasingly interconnected, bridging cultures and contributing to a more collaborative and prosperous global economy.

Plug and Play connects the world's largest corporations with the most disruptive startups to spark change. Don't miss out on the opportunity tocatalyze your own innovation journey and join our platform today.