By Bruce Johnstone, Director of the Business Growth and Development Programme at Cranfield School of Management
What should the government do to boost exports? With the economy badly in need of export—led growth this is an important question, and one we are posing to the business owner-managers who complete our online International Business Intentions Survey (IBIS).
The IBIS research still being conducted by Cranfield School of Management, in association with the accounting firm Smith & Williamson, has already produced responses to this question that have varied from the short and pithy to the long, and eloquent. Most business owners made a single suggestion, while others provided responses containing a number of suggestions. We were able to classify all the responses into one or more of these five themes:
1. SUPPORT – Provision of advice, support services and policy change.
2. TAX – Tax breaks and reforms of various kinds.
3. FUNDING – Funding, grants and lending for exporters.
4. EDUCATION — Education, training and workforce issues.
5. CURRENCY — Government management of the exchange rate.
The most popular theme was SUPPORT with 45% of the sample calling for more government support for exporters, or a policy change that they thought would help in some way. Suggestions included:
– Better promotion of UK SME manufacturing on the international stage.
– More financial support for trade promotions and missions.
– More direct help with difficult markets and finding partners.
– A more consistent long term approach to developing markets.
– Work out standardised procedures for different products and export markets.
– Have a rigorous system for accrediting in-country agents.
– Seek out exporters more proactively and provide support and help.
It is interesting to note that most of these support activities are already being actively provided to exporters by UK Trade and Investment (UKTI). Our survey suggests that SME owners generally approve of the type of support provided by UKTI and want more of it.
One third (33%) of those surveyed thought something should be done about TAX. Suggestions included:
– Tax credits for exporting.
– Reduce corporation tax on export revenues so that companies put more effort into exporting.
– Tax incentives for exports to targeted countries.
– Promise that any new tax incentives will remain in place for five years to increase confidence.
– Simplify procedures, such as the foreign entertainer’s tax requirements.
– Simplify rules on the taxation of overseas profits.
– Harmonise VAT on goods that are re-exported.
A quarter (24%) of the business-owners saw funding, grants and lending as the solution. Several commented that lending to small business should not be left to the banks, but operated directly by government. Suggestions included:
– Providing more equity funding to take the place of the short term bank borrowing on which many firms rely.
– Provide more funding to subsidise overseas market visits and exhibitions.
– Provide pre-venture capital to get good ideas to the development stage.
Ten percent wanted to see government moves that would produce a better educated, trained and flexible workforce in the UK. Several mentioned a shortage of technical or manufacturing skills as a major problem for their business. They suggested:
– Promoting manufacturing apprenticeships.
– Boost management and technical skills in government and business.
– Boosting the literacy and numeracy of school leavers.
– More language teaching and exchange programmes in schools.
Government’s role in maintaining a favourable exchange rate was seen as worth mentioning by seven percent, and finally a small but vocal two percent of the sample called for the UK to leave the EU.
The IBIS survey gathers information about the UK SMEs that participate, and asks about their plans to do business across borders. It is expected to provide insights into the factors that enable SMEs to generate export-led growth for the UK economy.
To participate and have your say on what the government should do to boost exports, please complete the IBIS survey online before the end of March. The owners and managers of any UK business that complete this online survey will receive an Executive Summary of the findings and go into a draw to win an iPad 2 from Smith & Williamson, or one of 12 copies of Guy Rigby’s critically acclaimed new book From Vision to Exit.
Dr Bruce Johnstone is a director of the Business Growth and Development Programme at Cranfield School of Management. He can be reached on email@example.com
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