Santander: Finding export opportunities for Brand Britain
Santander's Head of International, John Carroll, talks to PoliticsHome’s Central Lobby about how the public and private sector can foster more export opportunities for UK firms.
What were the main findings of your latest report: Boosting exports: helping UK businesses expand overseas?
The report produced some very interesting findings which were mainly focused around five areas: connectivity, support on the ground in countries, talent, new technologies and access to finance. The biggest single challenge that was cited in the report was “determining where the best opportunities are”, which shows us that whilst businesses may want to expand internationally, and even if there is support in place for them to do so, they do not know where the opportunities lie or have the necessary connections overseas. We also found that ‘Online Research’ ranked highest in response to “Where would you turn to for information about moving into an overseas market?”, which is reflective of the fact that SME owners have limited time and resources and so easily-accessible information is fundamental for their overseas expansion.
Similarly, access to the adequate skills and talent came high up the agenda, as companies consider it a strongly influential factor in determining their ability to grow over the coming years. It is evident from the discussions that we’ve had with businesses that there is scope to increase the links between SMEs and international students for instance. This year Santander has launched a pilot programme with Edinburgh Business School, which will see students of the Masters in International Business in Emerging Markets having access to Santander’s Trade Portal. Working with ten businesses in Scotland, these students will be able to access relevant information on the emerging markets, identifying opportunities for the businesses to develop overseas.
How important are SMEs to the UK economy?
SMEs are the backbone of the UK economy. In 2014, High Growth Small Businesses created one in every three new jobs, despite accounting for less than 1% of UK companies[1]. They operate across all regions of the UK and cover a wide variety of sectors, bringing growth and employment to local economies.
How likely is it that the UK Government will reach its goal of helping businesses export £1 trillion of goods and services by 2020? What could be done to facilitate meeting this goal?
The goal set by the Government is challenging, but it is an aspirational target well worth striving for, acknowledging however that we should not aim to get all companies exporting, just those that are at the right stage to do so; otherwise we risk spreading support and resources thinly.
Whilst the current data shows that it will be challenging for the UK to reach an export target of £1 trillion of goods and services by 2020, we are still seeing an overall rise in the number of businesses exporting, which is encouraging. There is a lot that could be done to help businesses either export for the first time, increase their exports or go back to exporting for those who have exported in the past but are now operating solely in the UK. This support needs to come from both the public and private sectors as they will each focus on complementary areas.
How can the Government better support companies to trade globally? Is the Government doing enough to promote UK businesses abroad and improve trade links?
There are certain areas where only the Government has the ability to help businesses trade globally and it is here where it should continue to focus its efforts. Exporting is, by definition, an international activity, and in order to facilitate trade, we should not rely in pushing the agenda forward solely in the UK. The Exporting is GREAT campaign is a fantastic example of how the Government can use its overseas prowess to raise awareness of British products, open doors, and promote the Great Britain brand at very high level, and we have seen this promote awareness here in the UK, as well as overseas. The Government should work with its counterparts in other markets to increase bilateral trade through trade agreements, reduced red tape and review the de-risking agenda of certain markets. If the Government concentrates on tackling these issues, the private sector can support through complementary activity, such as providing knowledge, running trade missions and connecting businesses to local networks overseas, making use of its broad customer and relationship base.
What role does the private sector have in supporting UK companies expanding abroad and what is the right balance between public and private sector support?
The support provided by the private sector complements public sector activity and as far as possible we should aim to avoid overlaps or duplication of efforts. The private sector is well placed to address many of the challenges identified in the report. For example, we saw earlier that businesses do not know where the opportunities for their product are and that they require guidance and support when testing a market on the ground. Santander’s Trade Portal for instance enables businesses to identify where the demand is for their product and find and connect with potential business partners overseas. This is an example of how the resources and solutions available in the private sector can support British businesses.
What is the place of technology in facilitating international trade?
Technology is becoming ever more important in every aspect of our lives, and international trade is no different. With an ever greater use of data to inform business and customer choices, technology can play a decisive role in increasing the speed at which decisions, including funding ones, are made.
In terms of facilitating international trade, new technologies can remove some of the friction in the overall process, through innovations for example in online risk management tools or mobile payments. For these innovations to actually make a difference, I think that the only way forward is through an increased collaboration between FinTech companies and banks – combining the agility and technological skills of the former, with the expertise, customer base and infrastructure of the latter, will bring improved outcomes to the customers’ experience.
Similarly, new technologies are a fantastic way of connecting people. Before visiting an overseas market, businesses can use technology to collect information, find new business partners, and even take part in virtual trade missions, such as those run by Santander, to pitch products and virtually meet potential suppliers, distributors or partners.
What are the markets presenting more opportunities for UK businesses?
There are too many to list and there is no one market that presents the most opportunity for UK businesses. The sector in which a business operates will depend on which markets present the greatest opportunity. For example a company in the chemicals sector may want to look to China, whereas aerospace is particularly strong in the UAE. It also depends on where a business is in its export journey; we often find that first time exporters prefer to stay within the EU where regulation is standardised among Member States and the markets are more familiar, whereas a more-experienced exporter may want to take its business further afield to Latin America, the Middle East or Asia. The important thing for any business is to research as much as possible in advance and ask itself the following questions: where is there demand for my particular product? Does it need adapting to be successful in the market? How can I get it there? Who can help me once in the country? We stand ready to support businesses find the answers to these questions and expand overseas.
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Notes:
[1] http://www.highgrowthsmallbusiness.co.uk/HGSB-report-2015.pdf
