Government export target under threat as many SMEs say they're held back by a lack of support and financial concerns
At some point in every company’s growth it starts to look beyond its shores towards foreign lands. It’s certainly hard to overstate the opportunities that exporting can provide to start-ups and SMEs – there’s a reason the government has set a target of £1tn from exports by 2020.
However, turning ambition into reality is always a hard task and some worrying new figures from FedEx state that only one in four SMEs in the UK currently trade internationally. The Great British Export Report questioned over 1,000 SMEs on exporting, revealing that a lack of technical knowledge, concerns over the cost and the current economic conditions all act as barriers.
According to the report, 32% of businesses located in London and the south west are already trading abroad, with the north-west and Scotland lagging behind on 15% and 13% respectively. America, Australia, Canada and New Zealand are the top destinations for current exporters but some of the world’s most rapidly expanding markets, China and Russia, are being overlooked.
China, the world’s second biggest economy, was voted as the most difficult market to enter by 44% of respondents, suggesting that our businesses are letting a lot of opportunities pass them by. However, those that do export said that more support would be of value – and with 35% saying that reaching new markets will be critical to their success, this is evidently an area that the government would do well to look at.
Moreover, with 41% of SMEs see themselves mostly trading internationally in five years’ time, it appears America, China and the Middle East will be the preferred areas to do business, having been voted as the markets with the greatest potential. Unfortunately though, it looks like Africa and Brazil will be left out in the cold, as they are believed to be the poorest markets for future growth.
“Although UK SMEs are doing a good job, there seems to be a lack of awareness not only of the benefits to exporting, but to the resources available, which are plentiful if you know where to look,” said Trevor Hoyle, vice president of FedEx Express UK & Ireland.
“The future is indeed looking bright but if the economic recovery is to continue, now is not the time to rest on our laurels; now is the time to push towards further growth and a period of sustained stability which can be achieved, in part, through stronger exporting activity."