UK SMEs fuelling UK export growth
More than 63 per cent of British small and medium sized enterprises are exporting and making a significant contribution to rising international trade by taking advantage of declines in the value of the pound, reveals new research.
The SMEs Export Report reveals the digital economy proves to be an essential enabler allowing SMEs to take advantage of international opportunities, with many increasingly embracing new technology and processes. Chief amongst these is e-commerce, which has already proven its worth as a serious driver of growth—more than eight in ten of UK exporting SMEs generate revenue through this platform and almost a third have reported increased revenues over the last 12 months.
“It’s promising to see exports could be having a positive impact on the UK economy,” said Ed Clarke, managing director, UK Ground Operations, FedEx Express.
“To continue this upward momentum, governments and businesses across the world should play an increasingly important role to align SMEs exporting ambitions with the digital economy – providing more opportunities to reach new markets and customers. The FedEx acquisition of TNT Express is adding a remarkable European road network to the world-class air network FedEx Express already operates in Europe and around the world, creating even more possibilities for UK SMEs to export both in Europe and beyond.”
The report reveals 86 per cent of exporting British SMEs trade within Europe while 63 per cent export outside of Europe. As well as realising their global ambitions, these businesses are increasingly recognising the wealth of opportunity available to diversify and open themselves up to new markets. As a result, many are optimistic about the future, with a third stating logistics providers are helping them to respond to new market trends and developments.
“British SMEs are the bedrock of the economy,” continues Clarke. “As these businesses are displaying such great resilience in times of uncertainty, there will no doubt be an upswing in exciting and ambitious SMEs who also want to make their mark in today’s economy. By benefiting from advice from their logistics providers, these enterprises will be ready to meet the challenges head on with a lot of positivity.”
Over the years, there has been more willingness from SMEs to export to markets which are seen as difficult to enter. For example, 38 per cent of British SMEs export to the USA – making the country the top export market outside Europe – despite the unique challenges associated with the country, including its vastness, regional differences, and strong competition. Other countries SMEs are exporting to which can be difficult to enter include Canada, India and Australia.
“SMEs have once again shown that they can act as the guiding light for Britain as it enters its new economic chapter,” Clarke added. “To help overcome challenges, businesses are investing in new technology, new processes and new staff. E-commerce in particular is a burgeoning sector so if businesses align themselves to this, they can use this as a springboard to new and exciting opportunities.”
It is not just UK SMEs who have cause for optimism. Research has found exporting SMEs across Europe are thriving and looking for opportunities overseas with 53 per cent of them exporting to other continents, compared to 2015 which identified almost a third of SMEs exported to other regions. In addition, exporting generates 65 per cent of total revenue for these European SMEs, emphasising the importance of exploring international markets to grow and prosper.
“It’s positive to see the European SMEs community remains optimistic about their exporting prospects and growth”, said David Binks, president, FedEx Europe, and CEO of TNT. “The FedEx SME Export Report has emphasised SMEs recognise the importance of exporting to grow their revenues with e-commerce playing a crucial part of this. The merging of digital networks and physical networks has meant the world has become even more connected presenting more possibilities to export – contributing to SMEs growth, while boosting global competitiveness.”