Did you know… over the next 10-15 years, 90% of global growth will be outside the EU. That’s a fascinating stat.
And that’s one of the reasons why the UK Government is going crazy for exporting, and wants the UK to do much, much better in this area as we move into a post-Brexit era. They’ve even set a challenge for themselves to increase the amount of UK GDP derived from exporting, from 30% to 35%. It’s ambitious stuff, but not impossible.
While you might think this is pie in the sky, and let’s be honest government do have past form for making outlandish claims – take the 3m apprentice starts by 2020 for example – and if you’ve read certain op-ed pieces in the media last week, there are some commentators who’d agree.
I was at a roundtable last week at the DIT’s Daresbury offices in Warrington, where I heard the Minister of Trade for Exporting, Baroness Fairhead, make a compelling case for why we should be positive. Seven years ago, 25% of the UK’s total GDP came from overseas trade. We’re now at 30%, and that’s pretty good progress if you think about it. And, if we can make the 35% figure, that’s equivalent today, to another £100billion for the UK economy, she said – and that’s what it’s all about.
At present, the UK is the sixth largest exporter in the world, despite us being the fifth largest economy. We’re at the bottom of the G7 for exporting – just below the likes of Italy, France and Canada in comparable GDP terms. The government wants us to rise up the league though, and although we’re unlikely to get above Germany, there’s nothing to stop us having a crack at beating the latter lot.
I hear you chuckle. But let’s take a look back at Germany’s stats. Seventeen years ago they were roughly where we are now, at 30%. However, they’re now at almost 49%. Yes, you read correct, virtually half of their annual GDP from exporting, which is pretty incredible. If we can get even close to that figure…
But how will we do that? The Government has a plan, which it announced last week: it’s their Export Strategy, which will fit in to their wider Industrial Strategy. So we have:-
Encourage and inspire businesses that can export but have not yet started or are just beginning; placing a particular focus on peer to peer learning – there’s no better person to learn from than somebody’s who been there and done it before. Keep your eyes out for their Export Champions who are dotted all over the place – including Greater Manchester, one of whom is an FSB member too.
Inform businesses by providing information, advice, and practical assistance on exporting. DIT have offices in Manchester that can be contacted on 0333 320 0392. If you need any advice on exporting, this is a good place to begin.
Connect UK businesses to overseas buyers, markets and each other, using their sector expertise and networks here in the UK and overseas. Don’t underestimate what a referral from government can do for your business – it’s the ultimate recommendation.
Finance – putting this at the heart of their offer, to ensure no business is prevented from exporting simply because they can’t access the necessary funds. Banks have a dismal record of providing cash for exporting, and hopefully this will provide a credible alternative source of finance.
Don’t get me wrong, I think a lot of the latter is going to be akin to reinventing the wheel, while some of it will be government doing what government should be doing anyway, but I think this represents an important milestone in terms of culture, ethos, and overall direction. The government is now really pivoting to put exporting front and centre of business policy, and that is how you get from 30% to 49%, a la Germany style.
The good news for smaller firms too – right down to the micros – is that there will be support for firms of all sizes, not just the mediums up. DIT are promising a holistic approach to the support offered, with government doing what it can where it can, and leaving the rest to business as per it’s peer-to-peer tack.
The proof will be in the pudding though, and if any small or micro firms out there find the support wanting, please do let us know.
For more info, take a look at the DIT’s exporting website.