International trade will increase 20 per cent by 2016, say SMEs » SMEInsider

International trade will increase 20 per cent by 2016, say SMEs

Six out of ten of small and medium-sized business in the UK fully expect to be trading internationally in 2016, according to new research, representing a 20 per cent increase on the number of UK SMEs currently selling or sourcing products and services abroad.

The move will obviously have massive revenue benefits for the intrepid explorers, but will also help SMEs already trading abroad, with 28 per cent of those questioned by the Citrix and YouGov study expecting their international sales to increase by 2016.

The younger the leadership of an SME, and the more technically-minded that leadership is, the more likely the company will be looking to overseas markets in the near future.

While Europe and North America continue to dominate international trading relationships, at least one in ten UK SMEs say they are doing business outside of these markets. Significantly, younger SME managers (25-44 age group) are more likely to be trading with emerging markets than those aged 45 and over.

These younger SME managers are more positive on expectations for revenue growth and expansion in numbers of countries they trade with – 23 per cent are more likely to project growth and 60 per cent are more likely to predict expansion.

They are also pioneering new social and digital communications channels to build and maintain relationships with international business partners, highlighting the role an increasingly networked world is playing in enabling SMEs to work with international partners.

Communication technologies and global logistics markets reduce the barriers to trade. Of those currently selling internationally almost one in two sell through the business’ own websites and a growing number – 14 per cent – are using online marketplaces.

However, younger SME managers are also more likely to have employees on the ground in local markets, underlining the continuing importance of a local presence. Technological innovation will allow smaller companies to straddle emerging and their own markets.

It is no wonder, then, that technology and marketing services companies are the most bullish on expectations for international expansion and revenue growth. Nearly four in ten IT and Telecoms SMEs expect to increase revenues from international sales by 2016, whilst over a third expect to increase the number of countries they trade with.

Unsurprisingly, it is also the sector most likely to use video conferencing to communicate with partners (54 per cent) while marketing services SMEs are among the heaviest users of social networks (31 per cent).