The Government’s newly published Export Strategy, to which we have contributed to its development, sets out a clear aim: to increase exports as a proportion of UK GDP from 30 to 35 per cent. It is a goal which it describes as ambitious, but achievable.
As scaleups are more likely than most SMEs to be exporting and to grow their exports more quickly, they will play a vital role in accomplishing this shift. It is significant for scaleups to be recognised as part of the strategy, both directly and captured as part of measures to better enable high-potential firms. In this light it is also very encouraging that the principles that underpin the Export Strategy are aligned with the scaleup agenda.
The importance of targeting export support at scaling high-potential firms is acknowledged. Great store will be placed on the development of peer learning networks and the creation of “export champions.” It is recognised that the export and business support environment must be easier to navigate. And better use of data in delivery of these services must be embedded. These are all aspects that the ScaleUp Institute and our work with the ScaleUp Taskforce, alongside the Department for International Trade (DIT), has encouraged.
The Export Strategy also recognises that the Government has a unique position in delivering certain aspects of export services that only Government can supply. In doing this it focuses on four roles for government: providing trade finance, export finance and insurance; connecting businesses to local opportunities and fixing market access barriers; encouraging businesses to export or enter new markets and encouraging others to look to the UK; and providing information and advice on how to export.
The publication of the Export Strategy is clearly the first stage; the challenge now comes with putting it into operation. The ScaleUp Institute will work closely with the public and private sectors to ensure that the implementation of the Export Strategy is closely aligned with the needs of scaling businesses at a local and a national level.
A business-led approach
The ScaleUp Institute supports a business-led approach that recognises the firm-level, segmented approach to business needs. The Export Strategy recognises the value of such a segmented approach with a focus on sectors and firms with high potential.
We will put businesses first, as they are the drivers of the UK’s export performance, and we will design our products and services around their needs rather than our internal performance targets…government will tailor promotion of its services according to businesses’ specific characteristics. [Export Strategy: p59]
The importance of peer group learning
It is very encouraging to see the Export Strategy recognise the importance of peer to peer networks for encouraging and developing export opportunities. This approach has been consistently promoted and encouraged by the ScaleUp Institute.
Businesses have told us that they want to learn from the experience of their peers. As a result, we want to amplify the voice of existing exporters and share their stories. [Export Strategy: p39]
Promote peer-to-peer learning by forging a community of UK Export Champions…successful UK exporters who offer expertise and guidance to support other companies on their exporting journey…We will achieve this with our private sector partners to maximise our reach, and empower Export Champions to:
Communicate, frankly and credibly, the challenges exporters face and how to overcome them;
Demonstrate that many similar companies have achieved sustainable growth by exporting successfully;
Raise awareness of the help and support provided by government and the private sector, to help businesses to export with confidence [Export Strategy p40]
Access to markets – Opening doors
Our 2017 Scaleup Review described how scaleups are more international than other SMEs and are keen to expand further overseas. However, they continued to cite challenges in being able to access customers and partners. Scaling businesses want better connections with international buyers. So a key role for Government is to assist them by “opening doors,” facilitating introductions and access to potential customers. It is encouraging that the Export Strategy notes that this is something that only “government can do.”
“… businesses told us that the government plays an important role in supporting UK businesses to export since there are barriers and markets where only government has the influence, networks and assets to provide the necessary support. However, this assistance, when not sufficiently focused, can cut across other providers of export support.
- government will focus increasingly on government-to-government engagement, on securing market access and reducing market access barriers, and improving the policy environment and IP frameworks for exporters
- government will make better use of ministerial travel and inward visits from overseas governments to open markets for UK businesses, and provide longer-term support as part of our relationship management offer so that businesses can take better advantage of these opportunities
- government will utilise our government-to-government relationships and our international networks to ‘convene’ and ‘connect’ UK businesses with international customers, new markets, and with each other (p59)
- unlock new opportunities for UK businesses by exploring government-to-government agreements that provide a state-level commitment to support the export of UK goods, equipment, and/or services. For example, HMG would help other countries procure goods and services, or share the UK’s experience and learnings in support of a particular project. This would provide UK businesses with greater confidence to enter new markets and respond to overseas demand
- support businesses looking to invest overseas with the aim of increasing UK exports and jobs by removing the market access barriers they face. Depending on the market, they include:
- providing political, regulatory and economic reports and digital content on market-entry and doing business in select markets, focusing on tax, immigration, legislation, marketing, and business culture information where this is not available from the private sector
- providing in-market account management and structured support for the largest British businesses operating overseas
- connecting UK businesses with peers by developing in-market professional networks for UK companies, delivered jointly by DIT and British Chambers or other delivery partners
- supporting ODI-focused promotion events that will showcase prospective ODI opportunities to UK companies where this will be beneficial to the UK economy
- focus on reducing market access and tariff barriers by leveraging our government-to-government relationships, including our Intellectual Property attaché network, utilising the Prime Minister’s Trade Envoy programme, and negotiating, ratifying and signing new trade agreements. These include FTAs as well as other tools such as Bilateral Investment Treaties, Economic Partnership Agreements, Mutual Recognition Agreements and Joint Trade Reviews
- invite businesses of all sizes and industry sectors to submit non-tariff barriers they may encounter when exporting overseas via an online platform for market access we are launching in the coming months. This digital service will enable us to build a comprehensive picture of market access barriers facing businesses exporting from the UK, taking a whole-of-government approach to resolving non-tariff barriers effectively [Export Strategy p49]
Embedding better use of data
Broader progress needs to be made towards the better use of data. This will make it easier to identify firms that are already exporting and want to grow in current or new markets, and who will benefit from stronger alignment with DIT resources. So we are encouraged by the Export Strategy’s commitments:
We will also use data to better tailor our online and offline services and proactively identify businesses that could benefit most from export support. [Export Strategy p64]
government will explore how advanced data science techniques can be used, through cross-government collaboration, to identify businesses with the highest potential to export so that they can be approached with targeted support. This will include analysis to understand the overlap between high export potential, high growth firms and scale-ups [Export Strategy p64]
Navigating the export support environment
Scaleups have told us that export support environment can be difficult to navigate. We are encouraged that the Government intends to want to work in partnership with the private sector and other stakeholders to complement and improve the export support available for businesses. It is essential that the importance of improving navigation has been recognised.
To facilitate this, we will create an Export Strategy Partnership Group, led by the Minister of State for Trade and Export Promotion, bringing together senior leaders from across the export support market ecosystem. In addition, we want to take a whole-of-government approach to support businesses in their growth ambitions. This will utilise the expertise of each public body to support exporters, and we will ensure that businesses encounter ‘no wrong door’ across government when they seek the available business or export support. [Export Strategy p12]
DIT will bring together senior leaders from the export support market, including trade associations, chambers of commerce, accountants, lawyers, banks, consultancies, and LEPs to discuss how the export support market can be improved and simplified by establishing an Export Strategy Partnership Group, led by the Minister of State for Trade and Export Promotion. This will take into account the recommendations from the Business Productivity Review
government will enhance the sharing of business intelligence and improve business account management across different departments through digital technology and data visualisation tools which will inform service design and policy
DIT, UKEF and BEIS will work with Growth Hubs, LEPs, Chambers of Commerce and other regional bodies to further bring together the national and sub-national offer on export and business support so that businesses can move more easily around the system. This will be done through data sharing, co-location of DIT staff with local partners where possible, and regional coordination of export and business support
DIT will incentivise partnership working with the private sector and cross-government collaboration through its performance framework
DIT will also explore extending its Selling Online Overseas digital service to business-to-business marketplaces and for key intermediaries, such as logistics companies and overseas distributors, to make it easier for exporters to access support from intermediaries [Export Strategy p62]