08 February 2021
Around £4.4 billion could be added to the value of UK exports if 10 per cent of intermittent exporters become continuous, according to research from Aston University Business School and Lloyds Bank.
The new report, titled ‘The Contribution of Trade to UK Prosperity’, investigates the close links between productivity, innovation and international trading.
While Britain asserts its global stance as one of the top trading countries in the world, its ranking heavily relies on the value of the UK’s superstar exporters in the top 10 per cent, accounting for 90 per cent of all exports.
Superstar exporters tend to be larger, more capital intensive, more skills focused and pay higher wages, with concentration in the UK manufacturing and construction sectors. For example, the likes of automotive manufacturer, Ford and jet engine maker Rolls Royce.
Intermittent exporters are those companies who are inclined to dip in and out of exporting and are likely to swap the products they export and the markets they export to.
Jun Du, professor of Economics at Aston Business School and director of the Lloyds Banking Group Centre for Business Prosperity, said: “The significance of the UK’s superstar exporters to global trading is clear, but it’s also important to understand the value of intermittent exporters and how they can learn to further serve and contribute to the value chains.”
Separate polling of business leaders in the West Midlands found more than half (54%) believe that businesses trading internationally are more productive and 69% say they have more growth opportunities.
More than two-fifths (41 per cent) believe UK businesses are well prepared to capitalise on future international opportunities and 39 per cent of the West Midlands business leaders have gone as far to say that they are expecting new opportunities overseas.
Gwynne Master (pictured), global head of trade for Lloyds Bank, said: “Our new global position outside of the EU opens up a whole new world of opportunities for British businesses trading internationally. However, this sits in parallel to the challenges brought about by new trading regulations and an economy that is expected to be in recovery mode for the majority of 2021 as a result of the global pandemic.
“Lloyds Bank has a role to play in bringing these businesses together to not only give them the guidance and capabilities to help them invest in and build their businesses but also so that they can share their lessons for success.
“We believe more could be done to boost productivity and innovation by helping intermittent exporters re-enter international markets and expand exporting spells for longer, while further enhancing our role in the global value chain.”
British businesses of all sizes will face further challenges in 2021 as a result of the global pandemic - which saw a 17 per cent decrease in exports and 14 per cent decline in imports in 2020 - and our departure from the EU. Yet, business leader optimism perseveres and almost three in five (58 per cent) remain highly optimistic about the future of global trading.
Mandy Hague, international director at Greater Birmingham Chambers of Commerce, said: “The team here at the Chamber are very well placed to support businesses with international trade and I would encourage companies that are considering exporting for the first time or want to expand their existing exports, to reach out to us.
“Whether it be international trade support from an adviser or some guidance on innovation in the global market, we have a team to help your business.
“As the statistics in this report suggest, West Midlands companies understand the importance of trading overseas, the benefits it can bring and with Brexit there has been an opportunity for businesses to research new trading markets, particularly with the Commonwealth countries such as Australia, Canada and African nations.”
“We have developed a week of activity through our Commonwealth Opportunities Week that offers support and guidance on trading with a variety of Commonwealth markets. This would be a good opportunity for new and existing businesses to learn more about trading with new overseas markets.”
To view the full trade report, click here.