When one size doesn’t fit all: Why we need a tailored and segmented approach to meeting the export challenge

by David Armstrong Partner

Email +44 (0)7713 680266

The phrase “one size fits all” has never sat right with me.

I’ve been a strategy consultant for more than 20 years and in that time I’ve become very cynical about silver bullet approaches, which claim to fix complex problems.

The attraction is obvious, but usually such an approach doesn’t fit the “all” it purports to. In my experience solutions are messy and complex, and almost never one dimensional. Take one of the many challenges facing the UK government as we approach Brexit - how to improve the UK’s export performance?

We need to raise our game. Exports are currently 30% of the UK’’s economic output, that’s comparable to France and Italy but substantially behind the likes of Germany. The Department for International Trade (DIT)’s export strategy sets the objective of increasing trade to 35% of GDP.

To put this in context DIT believes there are 400,000 additional businesses that could be exporting, but aren’t. So one of the key challenge that lies ahead is getting these businesses to engage with the growth opportunities of exporting. Setting the ambition is the right first step, but what’s required now is the specific and detailed interventions that are going to shift the needle.

PwC recently ran a pilot survey of 128 business decision-makers across the UK, because we wanted to better understand their export experience and their awareness and take-up of export support services. Our initial findings are a snapshot on what business needs.

The first thing that comes across loud and clear is that they recognise the opportunity. 79% of the businesses we talked to are optimistic that exporting has the potential to accelerate their business growth in the next 5 years.

But 75% report facing barriers to exporting, and looking at the whole survey common problems emerge. Firms are being held back from exporting by a lack of knowledge and relationships in international markets, concerns about risk and return, the impact of tariffs, and lack of financial and managerial resources.


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These export barriers will be no surprise to anyone with an interest in trade, but what’s of note is that when we dug deeper into the data there is a more complex set of needs. A businesses’ history, sector, location, reach and customer base are among a range of variables that determine whether it exports at all and critically the type of support and guidance from government needed.

For example, the construction industry is mostly facing risk/return barriers, while the services industry cites knowledge and relationships as the key obstacle in exporting.

Smaller businesses find exporting more challenging than larger firms. Only 41% of businesses (<£2M turnover) report having at least a reasonable level of exporting experience compared with 86% of those with £50M+ turnover. And businesses with a “local footprint” seem to face a much higher level of what we’ve defined as “significant barriers” relative to those with a national or global footprint (43% vs 10%).

We know that a successful export business is the result of a long process involving many steps. The diagram below shows a simplified export journey from initial research to order fulfilment. But what’s less well understood is how export barriers play out along each step of the journey, and there’s a dearth of data on how the key variables of size, sector, locations and customer base affect the type of support, guidance and incentives needed to unlock export potential.

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This suggests what’s needed is a highly segmented and tailored approach to government support for exports. Indeed our survey found that business identified the need for a more tailored and specific service from government as one of the key priorities.

One size will not fit all business looking for help to export, but a tailored and segmented approach will need data, and lots of it.

Our survey was intended as a step towards getting better data, what’s needed now is quantitative research at scale. The DIT needs to work with the private sector and other key stakeholders on a comprehensive exports survey of UK business, with a large enough sample to make robust and analytically grounded conclusions. Over time this data set would generate a solid body of evidence from multiple thousands businesses to answer the critical question of where, what and who to focus resources to best achieve the 35% target.

by David Armstrong Partner

Email +44 (0)7713 680266

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