In February 2017, Secretary of State for International Trade, Liam Fox, abandoned the Conservative Government’s long-standing target of doubling UK exports to £1 trillion by 2020. While opponents and onlookers alike pointed the finger at Brexit, the Government said that slowing global growth was to blame.
It is almost impossible, however, to think of the UK’s balance of trade without considering today’s economic environment. From whisky producers in the Highlands, to London’s financial centre, Brexit has thrown to the fore opportunities and threats in abundance for UK businesses.
Yet the effects of 2016’s historic vote are not binary. They are significantly more complex than a simple narrative of good and bad. These effects have had - and continue to have - a more profound and dynamic impact on businesses dependent on their location, geographical markets, size, supply chains and customer-bases.
As negotiations between the UK and the EU stumble on, SMEs of all shapes and sizes remain uncertain about the future. While some believe that necessity is the mother of invention, presenting opportunities to forge trading partnerships further afield, others predict that a future outside of the world’s second largest economy will have a catastrophic impact on their businesses.
We believe that international trade is fundamentally good for SMEs looking to grow and thrive, but Bibby Financial Services’s own research suggests that the proportion of small and medium sized businesses trading overseas remains modest. It is estimated that fewer than one in five SMEs either import or export goods and services. Despite this, public and private sector organisations continuously exalt the benefits of trading overseas.
So why don’t more SMEs take advantage of the growth opportunities available through international trade? There isn’t a simple answer to this question. Neither is there a silver bullet that will encourage businesses to consider connecting with new suppliers or finding new customers overseas without de-risking the process entirely.
What is clear is that - with the right support - trading overseas can be more rewarding than it is challenging.
Throughout July, August and September, we surveyed 500 established importers and exporters to understand their views on Brexit, how currency volatility has impacted them, the markets most important to them and the complexities they face on a daily basis. The businesses we spoke with are ambitious, innovative and - above all else - resourceful.
Augmented by in-depth telephone interviews with seven SMEs trading overseas, these findings are the basis for our Trading Places report. We hope this report and its findings offer food for thought for business owners, policy makers, private and public sector organisations alike.
You can download the full Trading Places report here.