Unless something is done to help businesses enter new markets overseas, the Government is very unlikely to reach its 2020 target of doubling exports to 1tn.
The survey of 1,000 businesses reveals that only 16 per cent export, with those importing also at a low (17 per cent). But recent growth has been led by the housing market and that the Government needs to do more to support business activity if recovery is to be sustained.
When the effects of the new mortgage lending requirements take hold, growth will slow, so we need to stimulate business activity now. There are opportunities in abundance overseas particularly in emerging markets – but businesses dont seem to have the support they need to take advantage of them.
This is where the Government comes in. They can help businesses overcome challenges such as cultural and language barriers; knowledge of local customs; currency fluctuations and financing international operations.
While UKTI and UKEF are valuable sources of information, many businesses are actually concerned about payment terms when dealing with customers abroad, and the uncertainty of when or how they are going to get paid is a significant barrier.
The US, Ireland and France were the top three markets among those exporting, with seven of the top ten featuring inside the EU. Its natural for European countries to be the main export markets for UK businesses but among others, China, Brazil and Australia all offer viable opportunities for those able to build a customer-base.
Businesses dont feel they have the knowledge, funding or support to explore new markets which could fundamentally impact their growth in the long-term. This is a challenge for the UK and one we need to address sooner rather than later.
David Postings is Chief Executive of BFS.