“Government will explore how advanced data science techniques can be used, through cross-government collaboration, to identify businesses with the highest potential to export so that they can be approached with targeted support,” the strategy said. “This will include analysis to understand the overlap between high export potential, high growth firms, and scale-up.”
At this time, exports in the U.K. account for 30 percent of the Gross Domestic Product (GDP). The strategy paper wants to raise exports to 35 percent of the GDP. There was no deadline attached to the plan.
U.K. prime minister Theresa May described it as a “formidable challenge” that reflects the government’s “desire for the U.K. to be at the forefront of global trade.”
The government says the new target could be met if every company that has an exporting business increased their exports by 16 percent. But the government also understands that to accomplish this will require government and industry working in partnership if businesses are to thrive.
The strategy points out: “This approach more accurately reflects changes in the U.K.’s underlying export performance, is less affected by short-term economic fluctuations in the business cycle, and is not fixed to a specific time frame. This strategy is the first step on this journey.”
Linking up to China’s ‘belt and road’ initiative
Launched in 2013 as “one belt, one road”, the “belt and road initiative” involves China underwriting billions of dollars of infrastructure investment in countries along the old Silk Road linking it with Europe. The U.K. sees this as a potential for export opportunities linked with China.
It goes without saying that China is looking to grow its own dominance in the world, especially in creating new markets for Chinese goods.
And one of the pre-requisites for participation in the belt and road initiative is the establishment of a bilateral agreement with China, by which China and their investment partners spell out specific objectives for working together.
It should be noted that Australia has balked at signing an agreement with China on the belt and road initiative, with Frances Adamson, secretary of Australia’s Department of Foreign Affairs and Trade, in April saying: “While we are…supportive in principle of more infrastructure in this region and beyond, we are concerned about…transparency, about rules, about open contracts and governance arrangements.”
However, the U.K. sees a real opportunity to grow its exports to Gulf states in areas such as technology, cyber, life sciences, creative services, renewables and vocational training, in addition to services in oil and gas, aerospace, defense, and infrastructure.
So while the U.K. says it has a whole raft of measures to grow its exports, it does plan to use its own international networks to “‘convene’ and ‘connect’ U.K. businesses with international customers, new markets, and with each other.”
Brexit and UK exports
Brexiteer Cabinet minister Liam Fox told the UK’s Express that the U.K. could become an “export superpower” on leaving the European Union. He also agrees with the UK’s new initiative to increase exports, saying Britain must “set its sights high as it leaves the EU, which means helping some 400,000 firms that could export goods and services to create an international presence.”
Ian Kerr, CEO of U.K.-based global trade experts Bolero, also noted the importance of technology in increasing exports, saying: “both banks and firms need to understand the role of technology in helping to finance trade deals. The majority of trade transactions still largely rely on paper documentation despite significant progress in trade digitization technology.”
“For many, the message is still not getting through about the advantages of digitization, which can radically improve day-to-day working processes in international trade.”
And there are also U.S. tariffs on goods imported from the UK to consider, as well as the impact to farmers from the heat and drought this year. So there is a lot to think about and consider before a final decision is made on the government’s plan.
