Just five per cent of small businesses in Britain have plans to start exporting abroad in the next five years, leaving a potential shortfall in the economy of £141.3bn, according to a new report commissioned by money transfer company World First.
The report – Thinking Global: The route to UK exporting success – was conducted by the Centre for Economics & Business Research and highlighted Britain’s lack of progress compared to other major economies.
The research showed that between 2008 and 2015, UK exports grew from £372bn to £382bn – an increase of around three per cent. Had exports grown at the same rate as seen in Germany – the EU’s leading exporter – the UK would have seen the total export figure increase by seven per cent to reach £399bn.
Commenting on the research, World First CEO and co-founder Jonathan Quin spoke of the need to inspire small firms to engage with international markets in order for the UK to “fulfil its potential as a trading nation”, specifically citing the need for a dedicated government minister to support entrepreneurs in accessing global customers.
“With only five per cent of UK SMEs considering exporting over the next few years, it is clear that the UK’s SMEs need much more in terms of inspiration and support to seize the growth opportunities that exist in global markets,” Quin said in a statement.
“The creation of a government minister for scale-ups would go a long way in supporting businesses in their international development and drastically improve this figure.”
The research showed that only 19 per cent of small business owners in the UK believed that their company’s exporting prospects would improve following Britain’s decision to leave the EU, while 42 per cent of those surveyed believed exporting opportunities would be negatively impacted. Quin urged the government to ensure that the country’s business owners be actively consulted and considered in forthcoming Brexit negotiations.
Noting the positive opportunity, Quin said: “The fallout from the UK referendum has also brought about a significant amount of uncertainty for businesses but, if anything, it reinforces the importance of taking a global view and exploring new markets.”
Further research from the Royal Mail recently uncovered some of the reasons why small business owners in the UK were resistant to global exporting.
According to the study, 26 per cent of firms cited the complexity of customs procedures as the main barrier to exporting, in spite of the fact that many international orders fall below the minimum price threshold at which customs duties are chargeable.
Language barriers and a lack of knowledge of international markets were found to be of equal concern for 21 per cent of small business owners not exporting their products abroad.
Find out the three crucial things you need before taking your business overseas.
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