Lord Livingston aims to boost exports by £500 billion to £1 trillion by 2020 but are medium-sized businesses willing and able to step up?
If the UK could increase its share of China’s imports from 1.1% to just 2%, it is estimated that the national trade deficit would be completely wiped out.
It’s a motivating thought, and was just part of the discussion when Minister for Trade and Investment Lord Livingston met directors from a variety of medium-sized businesses (MSBs) to discover how the government could help them to boost their exports. The round table with Lord Livingston took place following Grant Thornton’s Agents of growth research into the MSB sector, which found the UK underperforming in contrast to overseas competitors.
Simon Bevan, Head of the China Britain Services Group at Grant Thornton, said the minister’s willingness to engage with the issues was clear. “He knows what he is talking about and asks really appropriate questions. He is a CEO who wants to know what will make a difference to his business.” You can see more feedback from the round table event in the video above, or read on for our overview.
Why are medium-sized businesses reluctant to export?
One of the most common challenges for medium-sized companies is having the resources to mount a sustainable export campaign. They are too big to receive some third-party support, yet too small to have the resources commonly available to larger companies. Also, not all MSBs have been keen to enter the challenging markets outside the EU and US.
Access to ‘patient capital’ is essential, said Ewan Lloyd-Baker, CEO of Hayward Tyler Group, a supplier of electric motors. “The development of these markets is not something that you can do in days, weeks or even months – it often takes years. Access to long-term capital at fixed rates gives us the certainty we need to make those longer term investment decisions.”
Understanding and more assistance for MSBs
Lord Livingston recognised the complexities MSBs face, saying they should be considered ‘smaller versions of big companies, not bigger versions of small companies’ and that to reach their potential more assistance was needed.
One of the initiatives was the commitment, in partnership with the British Chambers of Commerce, to expand support abroad through business centres and to increase help from consuls. There are now 34 British Chambers that can provide assistance for exporters, with the latest opening recently in Thailand.
This was welcomed by Adrian Went, managing director of Griffon Hoverwork, a British hovercraft manufacturer. “We’ve exported to 41 countries around the world – export is about 90% of our business. I think Lord Livingston has come in with a real focus on the detail of what he wants to achieve. That’s really encouraging to me, because sometimes the service we have received from UKTI has been a bit patchy around the world, so I think the focus that is being brought from the top will make a difference.”
Help promoting Britain abroad
However, Went also felt that more could be done to support ‘Brand Britain’ and there should be some acknowledgement by UK institutions of the help needed by UK exporters. “I think we have to be really quite partisan about selling things. Sometimes our agents abroad for Britain play with rather a straight bat.”
Scott Barnes, CEO of Grant Thornton UK, perceives a change in how mid-sized businesses are being viewed: “Since the launch in the spring of our second Agents of growth report, we have seen a real change in how this group is perceived, and increasing understanding of their contribution to the UK economy.”
UK export finance boost
“I was also heartened by the news in the last Budget of the boost to export finance, something that we had identified as an area for the government to look into.”
The importance of funding was picked up by Gordon Johncox, Managing Director at Aston Manor Brewery. “I think some of the initiatives that are coming in here, particularly the development of UK export finance, will be really important to us, it will open up a different sector to us,” he said.