Posted: Wed 22nd Mar 2023
The UK must become an export powerhouse if the economy is to rebound from the COVID-19 trade shock, a new report by Enterprise Nation and the Entrepreneurs Network has found.
The 'Access all areas: Markets' study says that if UK exports had rebounded as strongly as Germany’s following the pandemic, it would be exporting $111bn more than is currently the case.
It also finds that even if the UK had simply kept pace with other G7 countries, it would be exporting $65bn more.
The study urges the government to unleash an SME entrepreneurial export boom and tackle the issues that prevent SMEs from exporting such as cost, complexity and lack of skills, through a series of recommendations including trialling Export Vouchers, broadening the government-backed business curriculum, simplifying information and doing more to raise awareness of the funds available from the UK Export Finance (UKEF).
It also heralds the launch of an intensive private sector-backed initiative to support more SMEs to export and grow.
Over the next 12 months, the Enterprise Nation Go Global scheme aims to offer targeted guidance to 100,000 SMEs, supported by leading international banking firm Santander, international accounting firm Deloitte and Irish business delivery solution An Post Commerce.
The programme will unlock the global ambition of SMEs and smaller businesses with high quality resources, e-learning modules, trade events, mentoring and advice tailored to support growing businesses.
Eamonn Ives, head of research at The Entrepreneurs Network and report author, said:
"International trade represents a world of opportunities for Britain's SME community, with evidence showing how effective it can be in boosting their productivity. But, as we heard time and again from Britain's entrepreneurs throughout this research, importers and exporters face a thicket of challenges - from complex regulations to costly tariffs.
"Even when the government lends a helping hand, support can be confusing and piecemeal. The recent fusion of business and trade into one single department is a promising step forwards - and Kemi Badenoch must be unstinting in championing Britain's entrepreneurs whose ambitions go beyond our own borders."
Emma Jones CBE, founder of Enterprise Nation, said:
"Export must be a major focus of the government's growth strategy. Unlike other economies, the UK has fallen behind in its export ambitions.
"We must reignite the UK's appetite to export and ensure that Britain's SMEs have the best conditions possible to flourish on the international stage.
"We know that exporting, whether it be a product or a digital service, is a key driver of productivity and growth. For example, firms that export introduce more innovation and develop more products. We must ensure SMEs have all the information, support and skills they need to join the dots and see exporting for what it is - a clear route to growth.
"This report sets out how the government can support a new age of exporting."
John Carroll, head of International and transactional banking at Santander UK, said:
"In our most recent Trade Barometer (released last week), 59% of internationally trading companies reported improved performance over the past year compared to just 46% of those which do business solely in the UK. It's clear international trade is a significant growth driver and the fastest route to recovery for businesses that have been up against challenge after challenge in recent years.
"I'm delighted to be working with Enterprise Nation on the Go Global initiative. We have already supported over 1,000 businesses into a new market overseas since 2019 and I firmly believe that our unique international network, together with the knowledge and expertise of our teams, can make a real difference to many more, as well as the wider UK economy."
The report found the economic benefits of exporting extend beyond productivity. Survey evidence of SMEs across 33 European countries found that SMEs which export are more than three times as likely to introduce new products or services than those which do not.
Import and export are key drivers of productivity and growth. Figures from the Office for National Statistics (ONS) show UK businesses which declare international trade in goods can be around a fifth more productive on average than similar firms which are non-traders, even when you factor in firm size, industry and ownership status.
Small business export case study: Teddo Play
"I had to dedicate time to learn about the different regulations, customs requirements and so on."
Another initial challenge was the cost of delivery, especially to individual customers, rather than B2B sales.
"It was a massive strain on the business as I tried to absorb the delivery costs making it attractive for international customers."
But despite that, Keisha lists a number of positive effects – from an expanded customer base (and a more diverse one at that, with reduced reliance on a single market), to improved competitiveness as she can exploit greater economies of scale.