Boost business beyond our borders
A new study from the CBI and Ernst & Young shows that a focus on exports could boost the UK economy by £20 billion, says Steve Varley
WITH GROWTH projections for the UK weak compared to other markets elsewhere in the world, UK companies need to look beyond their own borders to compete for growth.
Ernst & Young has collaborated with the CBI on a report, Winning overseas: boosting business export performance. The report reveals just how significant the size of the prize will be for the UK economy if it can achieve its potential – 1.5% GDP or £20 billion by 2020.
Boosting exports can also have a positive impact on inward investment, especially if we can align foreign direct investment to the same economies.
Successful exporters show a number of characteristics. These include being flexible in their approach to market entry and having a clear, long-term strategy. More recently, they are looking further afield to rapid growth markets.
While traditional markets in the US and Europe remain important and are a useful stepping stone for many businesses, rapid growth markets are increasingly attractive. Ernst & Young’s Rapid Growth Markets Economic Forecast identifies the top 25 rapidly growing economies.
As well as highlighting the continued significance of the BRICs, this shows that countries in Eastern Europe and Africa such as the Ukraine, Poland, Nigeria and Ghana have been some of the world’s fastest growing economies over the past ten years.
Many of these markets are experiencing significant urbanisation and businesses are increasingly finding that a focus on cities rather than countries is becoming a significant factor in export success.
The increase of the middleclass in these markets has resulted in more demand for the services and products the UK provides, including professional services, financial services and hi-tech goods.
The UK government and business must maintain a long-term strategic view. Entering new markets can be costly and receiving full pay-back may take time. We believe that, with the right mind-set, approach and commitment, new market entry or expansion offers exciting opportunities for future growth.
Steve Varley is managing partner, Ernst & Young UK&I
Read the report in full at http://www.cbi.org.uk/campaigns/increasing-exports/