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Only one quarter of UK SMEs are currently ‘internationally active,’ according to the new Great British Export Report, released today by FedEx Express. However, a third (35%) of UK businesses identify tapping into new markets as essential to their success in the next twelve months.
Businesses which trade internationally are three times more likely to grow than those who do not and FedEx Express is urging UK businesses to start thinking internationally to stimulate their growth and boost profitability. However, more than half (51.9%) of the 1,000 UK SMEs surveyed said they would require more support to achieve international expansion and FedEx Express is highlighting the solutions and expertise available to ensure UK businesses continue on an upward trajectory—driving the UK economy forward.
The UK has recorded the strongest export growth in the EU in 2013, outstripping every other large economy. This growth is down to surging exports (City AM, March 2014) and highlights the UK SMEs are doing a good job and positivity is set to continue in this area.
The Great British Export Report is released at a time when the UK government is emphasising the pivotal role SMEs need to play in the continued economic recovery by setting an ambitious £1 trillion export value target by 2020 (gov.uk). Some UK businesses are already taking advantage of international opportunities and the UK economy is looking more positive as a result. However, according to the report, UK SMEs still appear to find entering emerging markets challenging. China, Russia, Brazil and India are all under-represented in the SME export league table with China—the world's second largest economy—surprisingly occupying the sixth spot and topping the poll of the most difficult markets to export to. Other challenging regions to enter include the US, the Middle East and Japan, the research found.
"This survey has picked up on some thought-provoking trends in business behaviour and attitudes," says Trevor Hoyle, vice president, FedEx Express UK & Ireland. With three decades of experience in the UK, we've seen first-hand how starting to export can have a revitalising impact on a business. Our job at FedEx is to give British businesses global knowledge at the local level in order to seize these opportunities."
The report also uncovered there is no shortage in optimism about the future of doing business overseas. According to the survey, of the companies which currently do export, 41% predict that their activities will be mostly international in just five years' time, rising to 57% in 15 years.
“Now is the time for UK businesses to prepare for the internationalisation of their activities,” Hoyle continued. “This will allow them to get off to a flying start on the global stage and succeed in driving the UK economy forward, as long as they have access to the correct support required to help propel them to continuing international success.”
The report also reveals the type of barriers SMEs face when it comes to accessing new markets, with 20% of companies surveyed reporting a lack of technical knowledge and a concern over the costs whilst 14% were waiting for economic conditions to improve further. However, according to Hoyle, "Whilst there are challenges for some companies in doing business abroad, they can be overcome by having access to the right support, expertise and network."