Whilst it is true to say there exists uncertainty at this time of EU Exit, the fundamentals of exporting are not being disturbed as much as we might think and the opportunities to take this moment to export and to grow national exporting have never been higher.
For the first time in our 900 year Parliamentary history we have an Export Strategy. Formulated by the Department of International Trade, which was created by the dynamic and cerebral Rt Hon Dr Liam Fox MP as its former Secretary of State now led by the new Secretary of State, the Rt Hon Liz Truss MP, DIT comprises some of the most able and capable civil servants across Whitehall. DIT, has become the most successful international economics ministry we have ever had. The Export Strategy makes clear the UK is experiencing the highest exports of any period in our history at GMP 647bn.
The Export Strategy informs the UK that only 8.8% of UK
companies export at all. There are 5.5m companies in the United Kingdom. This suggests that the entire UK export success is managed by less than 500,000 companies. It identifies 400,000 UK companies who believe they have something to export but who do not. This might suggest we could double our exports if they did.
Exporting is great. Greater exporting holds the prospect of
generating “new money” for the UK i.e. levels of prosperity in our GDP that would not otherwise exist. Evidence suggests that those UK companies who export are 20% more efficient than those who do not. Exposure to a greater array of competitive forces make this so. The Government’s exporting GREAT Campaign is the single most successful cross-departmental marketing campaign in British Government history. It is why our peer competitive nations are seeking to replicate it!
Whether you are a new, intermediate or advanced exporter one way to grow your exports is to register your company and your capabilities on the GREAT website.
Another is to acquaint yourself with UK Export Finance. UKEF is the world’s oldest national credit agency. It was formed in 1919 and this year marks its 100th anniversary. Its mission is to finance any trade that is exportable. It works with your bank so that up to 80% of the value of your export can be guaranteed by UK sovereign guarantee. Today it is even available in foreign currency.
EU Exit is government policy but regardless how any of us voted in the referendum there is more to excite than to concern us. By definition EU Exit only has the potential to affect EU trade. For those EU Free Trade Agreements with non-EU countries, 63% of them have already secured “roll-over” status by DIT’s Trade Policy Directorate and the new Secretary of State signed her first trade continuity deal with South Korea last month – worth GBP 15bn annually – and an indicator of how trade liberalisation and freedom are bound togther.
But more than this it is worth looking at the world and balancing the importance of the EU in relative terms to the way the UK trades with non-EU countries. Looked at this way, the USA is by far our single largest national trade and investment partner and the reason why a free trade deal with the USA is a goverment priority.
According to the IMF 90% of world economic growth will occur outside the EU. So even had we remained in the EU it would be a timely moment to look outside it for exporting opportunities.
Churchill said that the UK’s place in the world was determined by our relationships with the USA, the Commonwealth and Europe.
The PM’s Philadelphia Speech in 2017 added a 4th – the Rest of the World.
So if one looks at the world this way, one can export to our largest national market in the USA which already accounts for 17% of UK trade overseas, look at the 53 nations on the Commonwealth comprising nearly 1/3 of global population and many of the countries that comprise much of that 90% of future global growth referenced above by the IMF. And harness the growth of the rest of the world countries, from Brazil to Indonesia which are fast-becoming the future G8 of the current G20.
None of this is to diminish the importance of exporting to the EU. But can any existing exporter suggest that the reason for their EU exporting success is not because of anything other than being “cheaper, better, faster” than their competitors? This is the old American salesman’s mantra. It should become ours too.
The EU’s Single Market and Customs Union certainly create the conditions for free movement of goods across it but it is UK government policy to re-create those conditions in an eventual Future Agreement on EU Exit and it is worth remembering that over 80% of the UK economy derives from services not goods.
We are at a time of history like no other. Our world is certainly complex but we are much more than a departing EU member.
We are the world’s 5th largest economy; the world’s 2nd most capable military, able to deploy and sustain air-sea-land military power globally; one of only 5 declared nuclear powers with a submarine-based deterrent; one of only 5 permanent members of the UN Security Council and, one of only two with the most advanced aircraft carrier capabilities. And set alongside these “harder” powers are our “softer” ones – rated as the world’s
foremost global soft power on earth, with global reach. From having the 2nd largest concentration of diplomatic presence globally through to the language of English, the use of English Common Law; from the USA through to the Commonwealth, at the centre of global time itself with GMT and on to the BBC, sport and British culture, we have so much to look forward to.
This year the UK has educated more women on earth than any other country and made it a national policy objective to eradicate modern slavery at sea. If you compare the 18th century shipping routes to the undersea network of submarine cables that carry our internet network today there is a remarkable correlation and the reason why the UK has the 2nd largest concentration of data centres outside the USA. Comprising 1% of the world’s population the UK is a remarkable country generating nearly 15% of global research and manufacture 17% of every aircraft flying over London too.
These are some of the reasons why the world admires us so and the strategic backdrop within which UK companies can export with success. Whether this is your beginning or your moment to expand I wish you all success as you begin your new export journey.
About the Author
Carl Stephen Patrick Hunter OBE is a Professor-in-Practice at Durham Business School and the CEO of a high exporting manufacturer exporting 89% of its output to 110 countries, 40% to Asia, 15% EU, 10% Middle East, 17% to the USA and the balance to Africa and S America. Carl is a DIT Export Champion, a Decision-Making Panel Member of the Bank of England and a Commonwealth Business Mentor. Formerly a Greenjacket Officer in the British Army, Carl has travelled to over 30 countries annually for 25 years developing his company’s export position.
Carl Stephen Patrick Hunter OBE BA Hon DSc (Dunelm) FRINA FIMarEST AFNI MRAeS – CEO & Managing Director