Britain’s top exporters could pave the way for their intermittent counterparts and help add an estimated £4.4bn to UK exports per year, according to a new report, The Contribution of Trade to UK Prosperity’, by Lloyds Bank Commercial Banking and Aston Business School released today.
While Britain asserts its global stance as an independent trading country in the world, its ranking heavily relies on the value of the UK’s biggest exporters – the top 10% of exporters who account for 90% of all exports.
These exporters tend to be larger, more capital intensive, more skills focused and pay higher wages, with concentration in the UK manufacturing and construction sectors. Examples include 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.
The report compiled by Aston Business School investigates the close links between productivity, innovation and international trading. It looks at how an estimated £4.4 billion per year could be added to the value of UK exports if just 10% of intermittent exporters could be encouraged to become continuous exporters.
The value of productivity and growth in international trade goes significantly beyond the contribution to the British economy according to the report. This is well recognised by the business community with additional polling of 1,200 business leaders showing that 55% believe that businesses trading internationally are more productive and 71% say they have more growth opportunities4.
Over a third (35%) believe UK businesses are well prepared to capitalise on future international opportunities and 42% of business leaders have gone as far to say that they are expecting new opportunities overseas.
Gwynne Master, 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.”
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. Opportunities exist to increase the number of superstars in the future, but productivity will remain key to performance. Our research outlines these opportunities by identifying the key characteristics that intermittent exporters can learn from in order to improve productivity and enhance innovation. Exporting in global markets offers opportunities to learn, innovate and become more productive.”
British businesses of all sizes will face further challenges in 2021 as a result of the global pandemic – which saw a 17% decrease in exports and 14% decline in imports in 2020 – and our departure from the EU, yet business leader optimism perseveres. Almost three in five (58%) remain highly optimistic about the future of global trading, while 77% believe Britain is a strong exporter and 80% believe it is a strong importer.