Over the past few years, the U.K.’s economy has been crawling back from the Great Recession. Much of that economic revival can be credited to the vigor of its export market. Great Britain posted the strongest export growth in the EU last year, ahead of all other large economies.
But that growth masks a surprising fact about U.K. small and medium-sized enterprises (SMEs). While SMEs make up 99.9 percent of the nation’s private-sector businesses and account for 49.8 percent of British GDP, only one quarter of them are currently “internationally active,” according to the Great British Export Report, which was released in July 2014 by FedEx Express.
Exporting offers a world of opportunity for businesses. Statistics and studies show that businesses that trade internationally are three times more likely to grow than those that don’t. Perhaps not surprisingly, the British government has been an enthusiastic proponent of exporting. Officials have set a target of boosting U.K. exports to £1 trillion by 2020.
The report offers additional insights into U.K. SMEs and their perceptions of exporting:
- Perhaps not surprising given the lack of a language barrier, the U.S., Australia, New Zealand, and Canada are the top export markets outside of the EU
- The U.S. also was cited by the greatest number of respondents (22 percent) as the most promising export market, followed by China (11 percent) and the Middle East (9 percent)
- SMEs in London and the southwestern U.K. are most likely to export overseas (32 percent), compared to 15 percent in the northwest and 13 percent in Scotland
- SMEs in the manufacturing and technology sectors are most likely to export (59 percent and 41 percent, respectively)
- A total of 41 percent of companies that currently export predict their business will be mostly international within five years
- Top sources of exporting information for U.K. SMEs: the internet (44 percent), government (30 percent), and trade bodies (20 percent)
- Even with access to these sources, U.K. SMEs cite a “lack of technical knowledge” and concern over costs (both 20 percent) as the greatest barriers to exporting, followed by “concern over the resource and effort required” (17 percent)
This last data point is cited as “one of the most interesting findings from our report” by Trevor Hoyle, vice president of FedEx Express UK & Ireland. “Although U.K. SMEs are doing a good job, there seems to be a lack of awareness — not only of the benefits to exporting — but to the resources available, which are plentiful if you know where to look.
“In a global economy rich with opportunity, the fundamental exporting question SMEs must now ask themselves is: If not now, then when?” Hoyle adds.
The complete Great British Export Report is available here.