Globalization in the Middle Market: Lessons for Business Leaders

Every day, billions of dollars in goods and services cross country borders around the globe. International trade helps businesses expand their markets, reach new customers, and ultimately, increase sales and profits. For middle market executives, however, three out of four say the biggest driver for globalization is long-term growth prospects, according to recent research by the National Center for the Middle Market (NCMM).

The NCMM traveled to sunny Miami, Florida, for the first-of-its-kind Commercial Finance Association (CFA) factoring-focused event. The event brings together senior decision-makers from the leading companies in the entrepreneurial and traditional factoring space, trade finance professionals, supply chain finance specialists, lender finance providers, and international lending professionals.

GE Capital's Brenda Tsai, Commercial Director for NCMM, shared the latest findings on globalization in the middle market. Conducted by the Economist Intelligence Unit, the report "U.S. middle market firms and the global marketplace" revealed that 45 percent of US middle market companies operate and sell outside of North America. Specifically:

  • 29 percent of respondents said a minority of operations and sales are in markets beyond North America.
  • 11 percent of respondents said about one-half of operations and sales are in markets beyond North America.
  • 5 percent of respondents said a majority of operations and sales are in markets beyond North America.

In addition to long-term growth prospects, mid-market business leaders cited a number of other drivers for going abroad:

  • 30 percent wanted to spread business risk across more than one market.
  • 29 percent needed to keep up with competitors doing the same thing.
  • 25 percent saw an opportunity to leverage connections between company leadership and people in foreign markets.

Based upon their experiences, middle market executives offered some sound advice to their business colleagues:

  • Expansion beyond North America is more than a simple opportunity: It is a strategic necessity driven by globalization.
  • Finding success abroad requires a combination of long-term planning, understanding local markets, hard work, and patience.
  • As economic power shifts towards emerging markets, international companies are exhibiting less interest in investing in major European states and more interest in Latin American nations.

To learn more about globalization in the middle market, click here to download the full report.


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