Internationalisation evidence review: final report

Scottish Development International (SDI) offered a range of products which aimed to help firms internationalise, increase export volumes and improve productivity. The evaluation aimed to provide an in-depth review of the literature on business internationalisation; a discussion of market failures and the rationale for public sector intervention; a review of SDI internationalisation activities; a consideration of the evidence on the effectiveness of interventions; and a synthesis and identification of evidence gaps.

The methodology consisted of a: literature review; a review of SDI and Scottish Enterprise (SE) evaluations; and new estimates based on data from the Global Connection Survey (GCS), a postal survey questionnaire sent to a stratified sample of market-based firms operating in Scotland.

The literature review finds there is a case for government intervention to help firms overcome barriers to internationalisation, linked to information costs. The range of products available from SDI is relatively broad, but much of its activities seem to have been concentrated at the lower end of the productivity-enhancing spectrum. Products which were more closely associated with having an impact on GVA were exhibitions, missions and learning journeys, and the international strategy workshop. The report finds that SDI products seem to have the largest impact in terms of increasing GVA in Scotland. However, there is a lack of demand for SDI products which enhance productivity and help build competitiveness. The report finds there is a lack of monitoring and evaluation to provide evidence of outputs and current methodologies do not provide a rigorous analysis of whether firms who seek help with export promotion already have the means to overcome barriers to entry.

The report recommends that monitoring and evaluation should take a central role within SDI and SE in order to increase the capacity of SDI to determine firm-level competitiveness, the barriers to achieving this and the new policy instruments required to counteract increased global competition. The report recommends the setting up of a team, similar to the UK Trade and Investment's (UKTI) Economics and Evaluation team. For the current Policy Evaluation Framework (PEF), the evaluation suggests an analysis of merged data from the Annual Respondents Database (ARD), the Global Connections Survey (GCS) and the information on those receiving SDI products, in order to provide evidence on whether exporting/outward FDI (foreign direct investment) has a productivity impact.