A recent McKinsey study of Australia’s high-value-added manufacturing exporters spotlights the rise of numerous small to medium-sized companies that successfully compete—virtually from their inception—against large, established players in the global arena. These firms did not slowly build their way into international trade. Contrary to popular wisdom, they were born global.

Exports account for a full 95 percent of Cochlear’s $40 million sales—sales that have been growing at a real annual compounded rate of over 25 percent throughout the last five years. Cochlear is a company specializing in the production of implants for the profoundly deaf. Based in Australia, it maintains an international technological lead through its strong links with hospitals and research units around the world and through its collaborative research with a network of institutions in Australia, Switzerland, Germany, and the United States. It is a prime example of a company that was "born global."

A recent study of Australia’s high-value-added manufacturers (see insert) identifies two very different types of exporting firm. The first, domestic-based firms, fit the traditional idea of an exporting firm. Their core businesses are well established, with strong skills, solid financial capability, and a...