The importance of exporting in these economically fragile times is in danger of becoming a cliche, but for a country such as the UK it is also more important than ever before.
As a country we need to quickly develop an International Trade Strategy to concentrate on increasing the number of our companies trading on a global level, while also providing encouragement, advice and know-how to existing exporting companies for them to be able to extend their activities.
We need, as a matter of urgency, to create the right structures to pursue our exporting ambitions, and to adopt effective and practical structures to pursue a grand vision and challenging objectives.
In a nutshell, the UK needs to develop and diversify our products in international markets, place special emphasis on the needs of small and medium size enterprises (SMEs), enhance the image and competitiveness of our products and services in world markets, and reinforce our image as an open market and good business partner.
We need to increase the prosperity of our people by creating a change in the business community culture, thereby opening new opportunities in the global market. However, a deeper business culture change is needed, including a change in the outlook of governments.
Such a change in outlook would include revisiting our education system, entrepreneurial development policies, public sector grants, planning policy, as well as better targeting of European Structural Funds.
Developing the export component of businesses must be consistent with present attempts to revise and improve business support services, and must also be linked to the strategy of generating more business start-ups.
Current exporters themselves should assist this cultural change in business by proactively demonstrating the benefits of overseas trade, while assisting others to develop an export capability and increase their interaction in overseas markets. It is a matter of encouraging involvement and enabling success.
We must also recognise the importance and potential of SME’s in increasing our exporting activity as part of a new international trade strategy. While it will on occasions be understandable to focus on the most successful exporting businesses, we should be cautious not lose sight of the contribution made by the sum total of all individual exporters.
Specialised and high value services need to be offered as part of an International Trade Strategy to promote the image of the country as being a major force in the world markets. The services such a strategy needs to cover should be wide-ranging and include, to name a few, the provision of:
- International trade contacts
- Business information to industries, services and markets
- Special advisors to small and medium enterprises
- Specialist product magazines and catalogues to target overseas customers
- Trade promotions and trade fair events
- Promoting the UK’s image and maintaining a favourable overseas trading environment
- Creating a global network of influential businesses that support Britain
The strategy needs to be ambitious in its outlook while also remaining realistic. While it is correct to work for an improvement in our performance compared with the rest of Europe, the strategy also needs to take account of the difficulties faced with this objective if the global downturn continues. In such circumstances the strategy must investigate credible options of ensuring that our export share continues to expand and that our export performance improves in relation to the rest of the EU.
Appropriate measures should be targeted to enable UK companies to export. We should, therefore, aim to provide the services that would allow companies to develop that capacity. It’s essential to provide services that are customer-led rather than providing services that would merely justify the existence of the producer.
The strategy should decide on the best mechanism to ensure that customers (i.e. SMEs) are satisfied with the services and quality of advice and assistance offered. It is important that we strive to improve our overseas trade performance as a whole, while also ensuring that businesses in every region within the UK are in step with the improvements.
Despite the grim economic outlook in Europe, consumer and industrial demand in emerging markets, such as Brazil and Indonesia, is healthy and poised for sustained growth. Technology and falling trade barriers have made the conduct of international business simpler, less costly, and less risky than ever. There have never been fewer barriers to success in the global marketplace.
We should stand to benefit from these trends in the global economy. Those businesses that export abroad tend to win. Evidence shows that firms engaged in international trade and investment are more productive and innovative than their purely domestic counterparts.
Yet only a small percentage of our companies are making the leap. The number of firms selling in foreign markets has levelled off in recent years, and exports remain at a low percentage of our Gross Domestic Product.
Our challenge is nothing less than to get business to significantly boost export levels, as we try to rebalance the UK economy from consumption to production.
Russell Lawson is Managing Director of The Ideas Distillery, which helps companies tap into new markets through innovation