Posted on 23 July 2013
If more of its members took the plunge to export for the first time,
£792 million could be added to the economy annually according to a new
report from the Federation of Small Businesses (FSB).
New FSB research shows that six per cent of its members that don't
currently export say they would like to in the future. By doing so, they
could generate millions in additional economic activity. In addition it
would help the Government meet its ambitious targets to get 100,000 new
businesses exporting by 2020, potentially adding £5.6 billion to the
economy at the same time.
The Government is relying on UKTI to support these new exporters to
export for the first time. The research also shows that since 2010,
awareness of UKTI has increased among FSB members that export from 37
per cent in 2010 to 49 per cent in 2012. While this is an improvement,
the FSB believes that more can be done to promote UKTI services. It is
disappointing that only one in five businesses have used UKTI services
and the FSB is encouraging more firms to engage with the support
The report Enabling small businesses in the drive for exports
highlights the perception of small firms that UKTI support is just for
big businesses. The FSB believes in order to get more small firms
exporting for the first time, UKTI should raise awareness of the support
available for small firms. Moreover its programmes such as the
Tradeshow Access Programme and the Overseas Market Introduction Service
should help small firms build networks to generate real quality leads.
With 88 per cent of firms still reliant on exporting to the
eurozone, the FSB wants to see support across all countries given the
importance of the EU Single market, as well as other markets including
the emerging countries.
FSB members that currently export highlight access to finance (23%)
and fluctuating exchange rates (35%) as challenges to exporting. As a
result the FSB wants to see a referral mechanism developed so that the
high street banks refer more businesses to UK Export Finance (UKEF).
Additionally, consistency is needed in communication by UKEF to make
more small firms aware of the support it provides.
The FSB has called on the Government to look at how export support
is delivered in other countries and to look at the Small Business
Administration in operation in the USA. The business group believes that
such a scheme should be replicated in the UK, with a UK Small Business
Exports Department, which would provide tailored support to small firms
and be delivered through the Business Bank.
Launching the report at an event for small businesses in London –
also attended by Chuka Umunna, Shadow Business Secretary and the Trade
Minister, Lord Green – Mike Cherry, National Policy Chairman, Federation of Small Businesses, said:
"UKTI has clearly listened to the concerns raised by small
firms and offers much wider support and advice to small businesses.
Given the export growth potential among the smallest businesses they
just need a helping hand to get on the way and be made more aware about
the help that is out there for them and that it isn't just for big
"Small firms remain a key part of the drive to increase the
number of exporters. Our members alone that want to export could make a
huge economic contribution. However they do face barriers to taking that
first step. By looking at what works well in other countries, such as a
one-stop-shop for help and advice, the Government and UKTI can make the
right support available to give more small firms the confidence to take
the plunge and export for the first time."
Other recommendations include:
• Offering export vouchers as an incentive to new exporters which
they can exchange for support from UKTI or other private sector export
support providers. The FSB is concerned that the £6.5 million voucher
scheme announced at the 2012 Autumn Statement will not incentivise new
exporters to come forward. If successful the scheme needs to be expanded
with more funds made available.
• Improving the consistency of UKTI support across the regions to
ensure they are focused on delivering the needs of businesses rather
than the targets of commercial organisations.
• A proactive approach from UKTI to mapping supply chains to find new potential exporters.
• Replicating good practice examples of pre-export support from other European countries in the UK.
• Developing the role of Local Enterprise Partnerships to identify
potential exporters signposting them to advice and support from UKTI.
Lord Green is focused on increasing exporting opportunities for UK businesses, commenting on the report he said:
"The Government has set ambitious export targets over the next
seven years and it's vital that small businesses see the potential of
trading overseas to generate growth and jobs. With the help of the
Federation of Small Businesses the Government would like to see a
stronger take-up from its members and the wider SME community to reach
its goal and boost the UK economy."
Commenting, Shadow Business Secretary Chuka Umunna MP said:
that the UK can better compete and pay its way in the world, we need to
do all we can to help businesses – in particular smaller firms –
export. The world's emerging economies offer huge opportunities for
"This striking and valuable new research from the FSB
highlights the huge potential economic benefits which could be generated
if more small businesses were able to export for the first time. It
also highlights the challenges facing small firms: the fact that only
one in five of FSB members surveyed have used UKTI's services shows how
much more work there is to do to within Government.
"A lack of
access to export finance remains a significant barrier to smaller firms
exporting which is why we've argued for a British Investment Bank to
help address small businesses' finance needs.
"I welcome the
FSB's call for the Government to look again at export support for small
firms and in particular at the example of the US Small Business
Administration – I have already said I think there is a strong argument
for the establishment of Small Business Administration for the UK."