Scottish salmon is one of the UK's most valuable exports.
UK industry loses out on a potential £141 billion due to a lack of exporting among small and medium-sized companies (SMEs), according to a new report commissioned by money transfer company World First.
Less than a fifth of the UK’s SMEs currently export their products overseas – compared with over 40% of large businesses – creating an ‘export shortfall’. The research also found that just 5% of SMEs have plans to start exporting in the next five years, with the UK’s decision to leave the European Union (EU) denting optimism about exporting.
The UK ranks in the bottom five among European economies when it comes to SMEs as a proportion of total exporters.
The report, entitled Thinking Global: The Route to UK Exporting Success, was conducted by the Centre for Economics & Business Research (CEBR).
Jonathan Quin, CEO and co-founder of World First, said: “The value of the export opportunity to the UK economy is enormous and so much more needs to be done for the UK to fulfil its potential as a trading nation. But with only 5% of UK SMEs considering exporting over the next few years, it is clear that the UK’s SMEs need much more in terms of inspiration and support to seize the growth opportunities that exist in global markets.”
Quin suggested that a government minister for scale-ups would help support businesses in their international development.
“The fallout from the UK referendum has also brought about a significant amount of uncertainty for businesses but, if anything, it reinforces the importance of taking a global view and exploring new markets. As the government’s Brexit negotiations take centre stage over the next few years, we would urge that SMEs are included and actively consulted throughout the process in order to ensure their views and needs are actively considered.”
CEBR’s report found that by trading their goods and services internationally, the typical exporting SME added over £287,000 in revenue over the last 12 months, with nearly one in ten saying that exports had boosted their profits by more than 20%. It claimed that, if an extra 5% of UK SMEs began exporting, they could add more than £33 billion to the UK’s GDP.
Language was labelled the top barrier by companies looking to export to Asia-Pacific and South America, while cultural differences were cited as the biggest barrier for SMEs wanting to enter Africa and the Middle East. More than two-fifths of SMEs said that the Brexit vote would hinder their business’ ability to export, with just 19% saying that it would help them.
UK SMEs have reacted to the decision to leave the EU with a mixed response. When asked whether Brexit would impact their business’ ability to export, more than two fifths (42%) said that it would hinder them versus only 19% who said it would help them. Just over a third (35%) said it would make no difference.
And the analysis showed that the UK is one of Europe’s worst performers on small to medium-sized exporters.
Between 2008 and 2015, UK exports were up 3% from $473 billion to $486 billion – 19% lower than the global average and 7% lower than Germany, the EU’s leading exporter.
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