More than 80 per cent of UK SMEs say European markets are important to future growth, leaving small firms struggling should Britain vote to exit the EU, new research suggests.
A report released today (8 February) by commercial insurer RSA reveals that dependence on trading in Europe will mean SMEs would be disproportionately affected by Brexit.
Key findings include:
- 82 per cent of SMEs see European trading as important to their growth
- 52 per cent say it’s very important
- 56 per cent complain that uncertainty around Brexit is already limiting growth
- 66 per cent want more clarity on the UK’s future role in Europe.
The New Internationals study polled more than 1,000 owners of UK companies with between 10 and 150 employees. It showed that the perception of SMEs as local is outdated, with 88 per cent saying that international growth is increasingly important to small firms.
But almost three quarters (72 per cent) struggle to export beyond Europe, despite four in five reporting that trading with new markets is important – with North America cited as the greatest market opportunity by 67 per cent of respondents.
‘Gravitational pull’ of Europe
David Swigciski, SME director at RSA, said: “The UK’s SMEs are stuck in the gravitational pull of the EU. Current government export support isn’t working for our smaller businesses, who are struggling to trade beyond Europe.
“Not only are our SMEs missing out on growth markets, they face significant risk from uncertainty over a possible Brexit and our future relationship with Europe.”
SMEs think the government must take action to support small businesses in maximising exporting opportunities, the study found. Some 71 per cent want ministers to pave the way for free trading by relaxing controls in emerging markets, while 74 per cent say cutting red tape would encourage international growth.
Swigciski added: “Government policy needs to be updated to support our internationally minded business community if SMEs are not to be caught between the rock of the BRIC wall and the hard place of Brexit uncertainty in their core EU markets.”