Sajid Javid spoke to an audience at Liverpool’s International Festival of Business on Monday night and urged the region’s SMEs to explore the opportunities that exporting can bring.
“For too long the big names, the high-street brands and the giant multinationals have monopolised the arena of international trade,” he said, pointing out that while small and medium-sized enterprises make up 99% of all British businesses, they only account for a small fraction of exports. They also provide the vast majority of Britain’s private sector jobs.
Currently, only 1 in 5 British SMEs export at all – across the EU, the average is 1 in 4. And things are particularly bad for the medium-sized firms: Only 34% of British mid-sized companies export. In Germany the figure is 68%; in Spain it’s 85%.
“It’s a huge missed opportunity,” said Javid, addressing the Festival audience. “Last year, researchers found that up to 150,000 SMEs that could be exporting are not doing so. Yet if they embraced that opportunity, if they made the most of their potential, it wouldn’t just be good news for the exporters. The benefits of bigger sales would be felt all the way down the supply chain and right across the community.
Three main challenges
Javid asked his audience why small businesses are limiting their ambitions. In his view, there were key three issues facing SMEs unsure whether to go forward and export: First is a simple lack of awareness.
“SMEs don’t have agents and networks and feelers right around the world. For too long it has been too hard for them to even find out that an export opportunity exists, never mind make the most of it.
“Second is a lack of finance. Many SMEs lack the resources to engage with the international markets, or don’t know where to turn to access it.
“Finally, there’s a lack of confidence. Too many British SMEs don’t have a culture of exporting, it’s not something they’re used to.”
But the business secretary reiterated his support for UK’s SMEs, and championed the new cross-government Exports Implementation Taskforce, which he chairs. “What’s particularly useful for SMEs is www.exportingisgreat.gov.uk,” he said.
“Updated in real time, it tells you what’s needed where and how to go about supplying it. I checked this morning and there are currently almost 2,000 export opportunities listed, many of them perfect for SMEs. A government agency in Jamaica needs marine fenders and bollards. A Peruvian construction firm has a tender out for protective workplace clothing. There’s even a supermarket chain in Argentina that wants to stock British jam!”
“It has never been easier for SMEs to start exporting, and the potential rewards have never been greater,” he concluded.