Helping the economy, improving your growth
Why now could be the time to move into export markets
The UK is still recovering from arguably the worst recession in living memory, with the threat of a double dip still ever present. To help pull the country out of this economic dip economists and business leaders are encouraging companies to look at export markets as a way to help the UK economy, as well their own growth prospects.
Although UK exports grew by 8% pa during the period 1985 to 2008, the UK’s share of world goods exports has declined from 5.3% in 2000 to 4.1% in 2010. The Government believes that by increasing the number of companies who export by roughly a quarter, about £36bn could be added to the UK economy. So, is now the best time to move into a new overseas market?
The benefits of exporting
Economic research has consistently shown that companies which export to any country, in any financial climate, perform better than those who don’t1. The research suggested that if your company moves into exports this will improve your productivity and help you achieve levels of growth and economies of scale which just aren’t possible in a purely domestic market.
There are other benefits too, which can include an increase in the commercial lifespan of your products and services and an improved return on your investment in research and development (R&D). There’s also potential for an improvement in your financial performance with the research showing a 34% productivity uplift and better long-term prospects. Critically, companies who export are 11.4% more likely to survive than those who don’t.
Exporting for growth
The results from our recent Enterprising UK survey of private businesses showed that more than half expected to expand into new geographical markets as a crucial element of their growth strategy. But our clients consistently tell us that exporting can be tricky, with problems such as access to finance and a lack of contacts and/or knowledge about doing business in another country. Often the best way to explore new opportunities is to learn from the experiences of those who’ve have already tried it. And that’s why we’re sponsoring the UK Trade & Investment’s (UKTI) Exporting for Growth initiative.
The initiative was launched by the Prime Minister, David Cameron and the Trade and Investment Minister, Lord Green, at an event at the London IMAX in November 2011. The overriding aim is to encourage small to medium-sized enterprises (SMEs) to take their first steps exporting their products and to provide them with the help and advice they need to do so. We’ve worked with many clients to help them succeed in the more traditional export markets, such as Europe and the US. But increasingly, we’re helping clients tackle the challenges of exporting to the emerging markets and capitalising on the massive growth opportunities presented in the Far East and India.
Helping the UK economy
Since the initiative was launched in November, there’s been a series of roadshows across the UK where business owners have had the opportunity to hear Lord Green’s views on why exporting is vital to the growth of the UK economy. We’ve also had the chance to hear first hand from local companies who’ve built successful export businesses and question them on the trials and tribulations they’ve faced on their export journey.
Our partners have also been on hand to talk through our Pathfinder programme – a service we offer to help clients with the often complex formalities and registration requirements of setting up in a new overseas location – as part of a panel session alongside HSBC, the other supporter of the initiative.
Warren Buffet, the US philanthropist and CEO of Berkshire Hathaway, once said ‘I don’t look for seven foot bars to jump over. I look for the one foot bars that I can step over’. It’s these small, practical steps that the UKTI initiative aims to help with. By supporting businesses to take these first tentative steps we hope we’ll see a marked difference in the way UK businesses look to target new export markets.
For more information about the Exporting for Growth initiative, please go to www.pwc.co.uk/exportgrowth
If you’d like to talk to us about the Exporting for Growth initiative, you can contact Simon O’Brien via email or telephone 020 7804 9696.
This article is taken from the April 2012 edition of Private Business magazine.