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TRADING TIMES

With greater impetus from government to foster overseas trade, the time is right to start or develop exporting. Tricia Holly Davies investigates

This is not an easy time for businesses. Austerity measures aimed at defl ating the nation’s deficit mean that business spending, while showing hopeful signs of recovery, may be constrained, at least for the foreseeable future.

A recent forecast from the Ernst & Young ITEM Club, which is based on the Treasury model of the UK economy, noted that business investment is almost nine per cent above its lowest point in 2010.

In the face of stagnant spending levels, the report stressed that raising export levels will be crucial to economic recovery in 2011.

This is particularly true as consumer spending is predicted to remain sluggish thanks to slow employment growth and increases in VAT and commodity prices. If UK consumers aren’t spending, then businesses must look for customers elsewhere.

Rich Walker, technical director of Islington-based robotics engineering firm Shadow Robot, agrees: “Most of our business comes from a range of overseas customers,” he says. “We continue to reach out abroad to find new areas to exploit our key technologies.”

Shadow Robot is just one of thousands of UK firms to receive overseas trade support from UK Trade & Investment, which is committed to boosting UK exports. However, unfortunately Shadow Robot is in a minority. According to UK Trade & Investment, just one in 25 UK companies currently export their goods and services.

If the UK is to work its way out of recession, then the Government needs to convince a growing number of companies to start selling overseas.

Exports contribute significantly to the UK’s economy, accounting for nearly 30 per cent of GDP. In addition, UK companies that already export are responsible for 60 per cent of national productivity growth and more than 70 per cent of UK business research and development. This helps to give the country a technical competitive advantage, which leads to more sales and opens new markets.

The good news for the economy is that more businesses are starting to see the benefits of selling their wares abroad to both established and emerging markets. A survey of 203 small to mid-sized UK businesses conducted by UK Trade & Investment in conjunction with the IOD’s Director magazine in July and August of last year, found that despite the global economic slowdown, the majority of respondents – 75 per cent – still plan to export more over the next year. Moreover, the vast majority of those firms already (Continued on page 13...)

EXPORTS ACCOUNT FOR NEARLY 30 PER CENT OF GDP

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