SMEs and Public Sector ICT Procurement
November 2016
As the dust continues to settle in “post Brexit” UK, both SMEs and the export agenda have been highlighted as key to us achieving economic prosperity and growth.
However, despite the favourable political climate, few SMEs are engaging in export activity. A recent ‘World First’ report has highlighted that the UK ranks in the bottom five across Europe when it comes to the share of exports accounted for by SMEs. Only 11% of all British companies are doing any business beyond our borders.
This is despite the fact that the benefits for those who are exporting are clear. A recent Department for International Trade study reported that 85% of businesses already trading abroad said that exporting had led to a ‘level of growth not otherwise possible’. The typical SME exporter generated close to £300k of new revenue from the export of goods and services in the year to July 2016.
So it is clear that there is enormous untapped potential for the UK economy to be realised through SME exports. DIT reports that if 40% of SMEs took their wares to foreign markets (the same level as larger businesses), then the overall value of exports from the UK economy would potentially grow by over £140 billion — or 25%.
There are certain sectors and regions that are flying the flag. Promisingly for our industry, SMEs in the IT and Communications sectors are twice as likely to have plans to export than their counterparts in any other sector. The world values the UK’s digital innovation and SMEs have clearly been encouraged to export their world-class skills and solutions. Similarly, the North West is establishing itself as a leading light in terms of exporting, harnessing its longstanding culture for creativity and entrepreneurship to realise in excess of £20bn of exports in the year ending June 2016.
These types of success stories need to be replicated across the UK. This will only happen with industry, academia, government and other partners working in close collaboration to create an environment that actively encourages and supports SMEs to take their skills and services to the world. Initiatives like the Department for International Trade’s “Exporting is Great” campaign and the Sunday Times Export Track 100 are a really positive start, but more needs to be and can be done.
Therefore, the announcement last week of the launch of the DIT’s GREAT.gov.uk digital service to help businesses launch into global markets is a welcome initiative. (See https://www.great.gov.uk/ ) The service will help SMEs with export ambitions, giving them access to millions of pounds’ worth of potential overseas business, give practical advice, and signpost support to help them win lucrative contracts.
Clearly, Digital Leaders and its members also have a role to play in this. We must work together to build a strong community of like-minded suppliers with the appetite to work together to leverage complementary skills, relationships and connections to realise export growth. The seeds of the global DL community that are being planted in New Zealand, Israel and Estonia are to be nurtured by us all.
I would encourage all members, and particularly SMEs, to participate with Government in driving the export agenda. By working together, we will not only drive sustainable economic growth, but will also retain the UK’s position as a leading light of the global digital revolution.