A lot of businesses (mostly SMEs) who come to me for help with international trade, particularly those interested in export and new market entry, do so having first been frustrated by their own efforts. They’ve usually either tried to do it themselves and encountered unexpected problems, or they’ve turned to the government for help and found it to be anything but helpful.
Running on TV now is a very expensive advertising campaign by the Department for International Trade intended to motivate British business to look at foreign markets for growth. Exporting is Great’s “The demand is out there” campaign eludes to a world waiting for the best of British and will no doubt prompt many businesses to consider the possibilities. But what then? Creating demand without being able to satisfy it is a waste of money, and an opportunity.
Many UK SMEs could and should be trading internationally but are not due to the lack of dedicated help.
Those that consider it are funnelled into an inflexible one-size fits all process that does not offer or provide the most relevant expertise, and so business owners with little or no international experience are either left to their own devises or deterred from ever embarking on an international trade journey – they miss out and the country misses out.
It is a well-known fact that only 11% of UK businesses currently export and that over 90% of all businesses are SMEs. Some 75% of UK export generated revenue comes from our large companies whilst only 15% is contributed by our SMEs. It’s clearly a situation that needs to change.
Support from the government’s Department for International Trade and its subordinate International Trade and Investment (ITI), which took over from the UKTI with little fanfare, is still provided in the main through appointed agents; affiliated organisations, industry bodies, the Chambers’ network, Open to Export website and local authority LEPs etc., who provide useful information though ultimately it’s lots of points of contact but no points for delivery of anything practical. What’s more, these institutions’ priority is to fulfil their own revenue and performance targets rather than to help others fulfil theirs by delivering the actual services needed, tailored to individual requirements.
So, herein lies a problem – government support (or at least the desire to help) is channelled through other establishment organisations with no incentive to help anyone but themselves.
The low number of UK businesses conducting any international trade, particularly exporting, shows that this ‘establishment’ method of support does not work and that a better way is needed – one that really helps our ambitious businesses, especially SMEs.
The UK is now having to go through a period of adjustment following its vote to leave the EU. Attitudes towards international trade and the low level of our businesses conducting it must change if the nation’s economy is to be protected, let alone improved post Brexit. Rightly, Brexit now means the ambitious pursuit of global markets following a clean break from the EU and so the UK needs more of its businesses to start thinking and trading internationally, which must mean more SMEs since larger ones already do. Hence the advertising campaign we are seeing now.
The international trade support currently on offer to SMEs though is inadequate I would suggest. Inadequate because it is delivered (in the main) as well meaning government ‘initiatives’ through intermediary organisations not geared up to provide a pro-active service, or to deliver the specialist hands-on assistance needed to meet an individual company’s needs. The result is a generic approach and the simple ‘dispensing’ of general information which can best be described as guidance rather than specific advice, and yet such organisations are where SMEs first turn for help because there is no real alternative.
Moreover, such organisations are remote from the real-world reality of smaller businesses and compounding the problem is the fact they often simply link to each other, or to their counterparts in other countries; in fact they appear to function as a cosy if unintentional ‘cartel’ and much of the SME market sees them as such, with the result being that SMEs often find themselves left to their own devices, sometimes after being charged significant sums for access to basic information that serves little or no purpose. Meanwhile, in the private sector, many valuable but independent suppliers of international trade and export related services operate in their respective areas of expertise but without any coordination or government endorsement, all too often finding themselves competing with an exclusive cartel rather than working with an inclusive one, for the benefit of end-users and the country.
For SMEs this all means a lack of options and choice. On the one hand, there is the apparent advantage of government support through their intermediary organisations (the establishment), but on the other is the equally apparent advantage of personalised help from a diverse range of independent specialists. However, whichever option is chosen there are distinct disadvantages. Choose the establishment route and you forfeit professional services dedicated to your individual needs which can be adapted or changed as your circumstances and requirements change. Choose the independent route and you face the ordeal of finding then managing the wide range of specialist services needed, and probably without no experience of doing so.
Is there a better way?
SMEs need a better way to get the help they need to be successful internationally. A real alternative. But what is it?
The fundamental problem is that the government, though it has the best intentions and the financial resources, is least able to do what the business community needs i.e. provide:
1. personal attention and pro-active assistance tailored to an individual company’s requirements;
2. commercial advice based on informed human judgement (including professional opinion and even gut instinct) not a computer algorithm;
3. real empathy with a company’s ambition and a willingness to share the risk and return with its owners.
What’s needed then is the best of both worlds; an authoritative service that does what we’d like the government itself to do. Really help. A public service that’s free and can be trusted to provide businesses with the specialist help they need, tailored to their individual requirements, when they need it. A service that takes an equal interest in their short-term practical requirements and their long term success. A service offering real help provided by like-minded business people, not general information from well-meaning bureaucrats and civil servants.
When it comes to international trade, and particularly export, all too often our SMEs are left alone to interpret information for themselves or implement misguided plans without any real strategy in place, and without the necessary expertise on hand to do so. It’s this lack of continuous hands-on help from beginning to end that provides a common deterrent for SMEs who fear the unknowns and perceived expense involved in international trade.
And yet, we know that businesses who trade internationally are more financially stable, create jobs and give a boost to local economies at home and abroad so overcoming this lack of confidence by providing businesses with the full range of resources, skills and specialist services needed to succeed internationally and project management and mentoring at no extra cost, would form the basis of an ideal solution. A pro-active solution not a reactive solution.
Do I have an idea how to do it? Yes, I think so, after all what’s the point of raising an issue if you don’t have a solution in mind? I would suggest it’s a privately funded public service that works with the government not for it and has a single-minded objective: to help UK SMEs with ambitions to grow internationally realise their ambitions. That’s a little vague I know, but visionary ideas often are at the beginning. Personally, I just want to see Britain remain a global force and now we are leaving the EU, success with international trade is the only viable long-term strategy we have if we don’t want to become an ordinary country with a glorious past and a mediocre future.
Providing a means to turn business interest in international trade into real intentions, and then real intentions into successful actions is a goal worth pursuing for the country and I welcome any feedback from, or contact with, individuals, companies and organisations who share it.