The Great British economy has never wanted for ingenuity. Britain’s businesses are among the most innovative and imaginative in the world. But in recent years, the potential of our businesses has failed to translate into significant export growth.
As the Prime Minister has observed, increasing Britain’s exports is essential to the country’s future prosperity, and a five percentage point rise in the proportion of UK SMEs exporting would add £30 billion to GDP, creating 100,000 jobs. The Government has already set a target of doubling exports to £1 trillion by 2020.
Hitting this target will take considerable work. We know from talking to our customers that many businesses with massive export potential lack the confidence to look overseas. They do not have the connections that would ease their transition to new markets and they see little or no value in reaching beyond their own back yard.
HSBC is committed to helping them overcome these barriers, but only the UK Government can deconstruct them for good.
This paper sets out eight policy recommendations which we believe would tangibly improve the prospects of potential exporters in the United Kingdom. They are the result of extensive dialogue with our customers and are achievable within the short to medium term. Taken together, we are confident that they would make a material difference to the UK’s export potential.
HSBC believes that the UK has everything it needs to succeed in the new global economy. Our challenge is to deliver on that potential and make international business the norm, rather than the exception.
Alan Keir, Chief Executive, HSBC Bank plc
Practical policies to help British exporters
The world’s economic map is being redrawn.
By the middle of the century, a further three billion people worldwide will have joined the middle class. Most of them will live in markets we call ‘emerging’ today, including the dynamic economies of Asia, Latin America and the Middle East.
This will create huge opportunities for British firms.
The UK has a successful history as a trading nation, a tradition of scientific excellence and a reputation for producing high-quality goods. Today, however, international competition is greater than ever before. Expressed as a proportion of GDP, Germany’s exports of goods to China in 2011 were five times greater than the UK’s. Trading links between fast-growing nations themselves are set to increase tenfold in the coming years.
However, in order to seize these opportunities the UK needs to raise its game.
It is crucial that we encourage and enable British firms to compete and thrive in new markets, especially the small and medium enterprises (SMEs) which make up the backbone of our national economy.
At HSBC, we talk to companies who are exporting to new markets every day.
Some thrive, some find it a challenge. Many receive conflicting advice, or find it hard to navigate the many different bodies designed to support them when expanding their business internationally.
Informed by this insight, as well as direct feedback from members of our Export Advisory Council (EAC) and our own research, we have set out a series of practical steps which we believe the UK Government, trade associations and financial institutions need to take in order to help British SMEs to export and grow.
These proposals should challenge us to change the way we do things.
Some may be controversial, and involve initial costs, but they have the potential to help British SMEs to achieve international success and deliver substantial economic benefits to the UK.
British exporters have three simple needs