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Can SMEs solve the UK’s productivity puzzle through ecommerce?

The UK’s productivity levels have failed to catch-up since the economic downturn – could scaling online be the solution to the puzzle?
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The UK has the largest “productivity puzzle” in the G7, which essentially means we don’t produce as much work as we should.

When the economic downturn stuck, productivity took a hit, and this is not in itself unusual. However, the UK has not caught up with the pre-downturn trend – in fact, according to the Office for National Statistics (ONS) the difference between post downturn productivity performance and the pre-downturn trend was at about 15.6% in 2016, compared to a G7 average of around 8.7%.

Be the Business is an organisation that exists to help UK businesses address this very issue, and recently it partnered with the Amazon Academy as part of an initiative to help small businesses grow their productivity online.

Real Business caught up with Markus Clavin, marketing director at Be the Business, to find out more about what small businesses can do online to address the productivity gap.

Here’s what he had to say:

What would be your advice for businesses looking to scale online?

Seek out firms who have successfully scaled online that might be in different markets to yours, but have similar customer and operational approach to yours. Spend time with them to understand in depth the management, processes and technology they have used to see what you can replicate in your business.

What are the benefits of online marketplaces over selling on your own website?

The benefits of an online marketplace are: access to a market of customers looking to buy in your category; no need for a dedicated web presence; lower up-front marketing costs; and access to tools and widgets that enable you to optimise the positioning, features and benefits of your offer.

How can businesses decide which countries to target?

DiT and banks like Lloyds offer tools and analysis that will allow to understand the best markets to target.

They work by finding markets that are highly attractive (have the right types and volumes of customers with low competitive intensity) with the highest ease of doing business (i.e. pay on time, easy logistic, low language barriers, low regulatory hurdles, low currency volatility).

What do you think is the biggest barrier for small businesses looking to export?

Your frame of mind. When entering new markets, you will probably need to adapt what and how you are doing things to meet the requirements of your new market, and you will need to be prepared for not everything to go the way you expected.

You can lower these barriers by talking to people who have already successfully trod this path, or by finding someone who has been there and got the tshirt who could mentor you.

Why does Be the Business get involved with the Amazon Academy?

The Amazon Academy is a fantastic way for new and established businesses to learn and share how best to build a successful online business.

We are keen to help the attendees to continue this improvement journey by giving them access to a community of businesses looking to share what is working in their businesses.

What was your main take away from the Amazon Academy Newcastle?

It is a fantastic time to start a new business. Technology has reduced the barriers and costs to setting up, provided a simpler low cost means to access ready-made markets at home and overseas, and enables firms to collaborate and learn from each other.

The next Amazon Academy takes place on 11 September at Celtic Manor, Wales. To learn more and register for free click here.

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About Author

Letitia Booty

Letitia Booty is a special projects journalist for Real Business. She has a BA in english literature from the University of East Anglia, and since graduating she has written for a variety of trade titles. Most recently, she was a reporter at SME magazine.

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