IN A study released last year, UK Trade and Investment (UKTI) found that British companies that export see a 34 per cent increase in productivity within their first year of selling abroad. Unfortunately, according to Ernst & Young, only one in five small to medium-sized UK firms currently do so, compared to one in four in the EU. Britain’s share of the global export market has declined sharply – from 5.3 per cent in 2000 to 4.1 per cent in 2010.
There are plenty of reasons why. Some say Britain is over-reliant on advanced markets, to the detriment of high-growth developing nations. Others have criticised inconsistent government support. Part of the responsibility, however, lies with businesses themselves. Not all companies have products that can be exported, and it obviously takes a certain kind of bravery to enter a foreign market. Foreign market analysis is challenging, and currency risk, potential political instability, and language barriers can be difficult for smaller firms to manage. There is, however, support available.
UKTI’s initiatives are much-maligned. Daniel Kawczynski MP has noted that only 530 companies used its chargeable services in 2011. However, it could be useful to some. There is a huge amount of material on its website (www.ukti.gov.uk) for small firms. If you’re unsure on the practicalities, advice on protecting intellectual property, structuring your market research, and exploring routes to market entry could be useful.
Another route might be through industry associations. The British Chamber of Commerce provides services for its members, including financial products to protect against currency fluctuations. The Confederation of British Industry, in turn, offers research on potential markets.
But don’t forget your bank. Santander, for example, runs a programme called Breakthrough that targets companies with high growth potential. Although not aimed at start-ups, it seeks to support fast-growth SMEs through a total of £200m in funding and through accompanied export missions. Other banks are also keen to assist.
Tom Welsh is business features editor at City A.M.