The UK’s larger companies are probably at the limit of their exporting capacity. The focus will therefore be on the SMEs which have the largest exporting growth potential. But they will need to tackle infrastructure and find able leaders to succeed so that the UK economy can increase its exports. They should think of their success in terms of the obligation to export.
The new 3,760 strong Department for International Trade (DIT) should provide the support and help them to develop their exporting role. What challenges will they face?
First, they must “map” and assess the opportunities presented by state-owned enterprises that exist in their target customer countries (for example, the world’s three largest state-owned enterprises are all Chinese energy companies – State Grid, Sinopec and China National Petroleum). Instead of seeking agents or distributors to do that for them, as now, they must see them as key points of contact within them. That is something which civil servants and UK diplomatic posts overseas are well placed to do for the SME sector. By working closely with DIT officers in London before they travel, particularly the market sector managers, meetings could be arranged directly by the overseas missions to avoid contracting with a local agent prematurely.
Next the SMEs, which often lack the in-house infrastructure for research on links between the UK and the target country concerned, from a historical, military, security, financial or cultural perspective, must fill that gap if they are to build trade links. The Department of International Trade and the Foreign & Commonwealth Office can provide some expertise for new and existing exporters. SMEs must use UK diplomats as a valuable hands on source: in recent years they have become far more integrated and dynamic than hitherto and many “Deputy Heads of Missions” have trade as one of their key responsibilities. SME leaders should therefore visit our overseas trade emissaries first to become acquainted with business reality rapidly on a range of matters right down to customer payments. For instance, how many SME leaders know that UK Export Finance is now configured to support transaction values as low as £10,000 and to extend customer, not merely supplier, credit guarantees?
Finally, if SMEs are to grow and export, they must innovate and adapt.
The UK is a nation of innovation. It invented ultrasound, radar, electromagnetic induction, the world-wide web. More Nobel Prizes have been won by the academics in a single Cambridge college than in the whole of France. Though this country may have around one percent of the world’s population but generates 17 per cent of all its research. And 17 per cent of every aircraft in the skies are made in the UK. For the future, innovation and the ability of businesses to adapt will continue to matter.