International Trade

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3 barriers to service exports and how we could overcome them

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Research yesterday from the British Chambers of Commerce (BCC) found that 18 per cent of service sector firms described themselves as “on the verge” of exporting.

Almost a quarter (23 per cent) said they were currently exporting, but this is just 1 per cent more than the same time last year. The BCC said it wants more to be done to help companies take advantage of overseas opportunities, and identified three key issues which need to be resolved:

1. Regulation: 32 per cent of service exporters said that excessive overseas regulation was their largest barrier to trading internationally. The BCC says that red tape needs to be reduced, including the completion of the EU’s single market for services, which still has a long way to go.

2. Cultural differences: 26 per cent of companies said that language and cultural differences are a barrier to exporting. All children should learn foreign languages between the ages of 7 and 16, the BCC suggests.

3. Funding: 24 per cent said a lack of funding was a barrier to exporting for the first time. The BCC called on the Government to match other countries such as Germany on their spending on overseas chambers of commerce networks, and also that the banking sector should do more to support exporters.

The survey also showed that firms are very much focused on the traditional export markets of Europe (81 per cent), Asia (54 per cent) and the Americas (48 per cent). The BCC suggested that it was worth businesses considering entering African markets, with the IMF forecasting an increasing demand for services in countries like Nigeria.

John Longworth, director general of the BCC, said: “We need a culture change in the UK when it comes to international trade. This means more investment, stronger language skills and a global mindset instilled in people from a much younger age.

“There is no reason why we shouldn’t be matching the level of export support provided by our major international competitors, like Germany, which spends ten times more on its bilateral Chamber Network than the UK.

“The results also highlight that a shortage of relevant skills is undermining the UK’s export performance. To nurture the next generation of exporters we need to encourage young people to gain experience in international trade, by offering them a range of vocational subjects, such as foreign languages, that prepare them for the wide-range of opportunities available in today’s globalised world.”

Related: 10 reasons SMEs should be exporting in 2014 

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