78% of Andorra's Innovative Firms Export Abroad, Study Reveals

Nearly 80% of companies in Andorra's innovative ecosystem export products or provide services abroad, reveals the first Observatory on the Internationalisation of Andorran Companies, presented on Wednesday by ACTINN and Andorra Business.

The study, based on responses from 34 firms—73.5% in technology, telecommunications, and professional services—shows that 78.9% are active internationally, with two-thirds having pursued such activities for over a decade. ACTINN general director Ignasi Martín described the findings as a "snapshot of the innovative ecosystem" tied to the cluster, stressing they do not represent Andorra's overall economy or traditional trade. He said the results dispel the myth that Andorran firms shy away from foreign markets.

Small businesses demonstrate notable global reach: 70.6% employ ten or fewer workers, and 64.7% report annual revenues up to €1 million. ACTINN director Albert Moles noted this upends past assumptions that only companies with €50 million in turnover were positioned to expand abroad, pointing out that much smaller operations can now compete effectively.

Foreign markets play a substantial role for many participants. Some 37% derive more than half their revenue from overseas, while 29.6% to 30% operate subsidiaries or representative offices abroad. Spain leads as the top destination, with 78% of firms active there, followed by other European countries. Activity also extends to North America, Latin America, and Asia across all five continents. Tech sector firms stand out, with 44.4% earning over half their income internationally, compared to around 40% in professional services. Notably, 33% of tech firms and 30% of service providers engage in Asia.

Challenges persist despite this outward orientation. Over half lack dedicated international staff, signaling room for professionalization. The main hurdles include legal and administrative barriers (26.5%), internal resource shortages (20.6%), and low prioritization (23%).

Andorra Business director Judith Hidalgo praised the report despite its limited sample, confirming firms' drive to grow abroad amid high costs. She emphasized that international expansion "is neither cheap nor easy," but Andorra Business remains committed to support services. The partners plan to repeat the observatory later this year, then biennially, to broaden coverage and track trends.

The forthcoming EU association agreement stands out as a major boost. Hidalgo called it a "before and after" for internationalisation, particularly by streamlining product and service homologations from country-specific processes to a single EU-wide certification. This would cut costs for small firms, whose pricing currently absorbs per-market fees. She highlighted potential for new business models, such as re-exporting imported goods—currently unviable due to re-entry restrictions from outside the EU. Moles agreed, saying the deal would remove key constraints and greatly aid competitiveness. Service providers face fewer hurdles now, but product, tech, and import-based firms would benefit most from reduced bureaucratic obstacles.