SMEs drive entrepreneurialism, promote competition and innovation, and are in many ways the backbone of the UK economy. But, when it comes to the export market, they are collectively failing to maximise their potential with respect to exporting abroad. The UK performs poorly when it comes to SME-generated exports compared to exporting countries of comparable size. And it is estimated that anywhere between 25,000 and 150,000 currently non-exporting firms in the UK could, and should, be doing so.
This is a problem: evidence shows that exporting companies grow faster, are more productive, and are more resilient to economic downturns than those that only trade in their domestic market. Of course, what SMEs need is help with respect to exploring new markets, although – for a rather unique club of 53 countries – help is at hand.
Indeed, when it comes to the question of where to look to for new export opportunities, UK companies have a major advantage – a ready-made collective of countries that think favourably of the “Made in Britain” label and share many of our business practices.
The Commonwealth is a market of 2.3 billion people where the business community speaks English, shares English legal characteristics and a common business culture, and has a strong appetite for “brand Britain”.
Containing one third of the world’s population, 60 per cent of whom are under 30, it has a combined GDP of approximately £8trn. By 2020, it is forecast the Commonwealth will have one billion middle class consumers, 40 per cent of the global workforce and trade between member countries is expected to double to £700bn.
Aside from the sheer scale of the potential market, however, is the fact it can be easier to do business in the Commonwealth – and, on average, 19 per cent cheaper – than trade between non-Commonwealth countries.
Of course, challenges remain – some real, some perceived. Yet here is where help is at hand.
CommonwealthFirst, an initiative between the Commonwealth Enterprise & Investment Council (CWEIC) and Royal Mail, will select 100 UK SMEs from a range of industries and offer a tailored, three-year programme of training and mentoring to help them export throughout the Commonwealth.
We will educate our chosen SMEs on the legal and regulatory issues critical for exporting, and they will also benefit from tailored trade missions to key Commonwealth targets. Networking and access to key contacts will also be part of the programme, as well as high-level events where they can learn from experienced business people, particularly Commonwealth contacts.
With assistance from trade associations, chambers of commerce and a network of suppliers, any questions around navigating the sometimes challenging regulations and bureaucracy of international trade can hopefully be resolved.
Of course, the aim is to go well beyond these companies. The initiative is there to showcase what is possible – not just for our chosen 100 but for all UK SMEs. And not just for the UK. We aim to roll out the programme across the Commonwealth – helping companies in markets that have strong commonalities, despite the distance between them, become much stronger trading partners.
Note: Article written by Oliver Everett, Chief Executive, Commonwealth Enterprise & Investment Council. This article first appeared on CBIs Business Voice website.