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Andrew Collier: Firms must broaden their trade horizon and look to exporting

With only 20% of Scottish SMEs currently exporting, it appears too many overestimate the risk abroad and miss out on trading places

With only 20% of Scottish SMEs currently exporting, it appears too many overestimate the risk abroad and miss out on trading places

With little scope for companies to grow here at home, it’s time for braveheart businesses to do some blue-sky thinking, says Andrew Collier

Today, exporting is easier than ever. We now have an EU single market, and technology and the internet help us to trade across borders. Yet as a nation, we seem to have become slightly nervous about doing business abroad.

However, the Scottish Government is now committed to growing the nation’s exports by 50 per cent over the next five years, and would appear to have made a good start. HMRC statistics show that Scottish exports increased by more than 18 per cent last year. This is a higher growth rate than any other part of the UK.

The process of internationalisation is being pushed forward, not just by the Scottish Government, but also by its enterprise and 
investment arms, Scottish Enterprise and the Scottish Development International (SDI). As the agency primarily charged with increasing Scotland’s global trade, SDI has a particular role to play in ensuring that Scottish businesses achieve 
exporting success.

Anne MacColl, pictured, SDI’s chief executive, points out that her organisation is taking some major new steps to help Scottish companies with exporting. It is opening seven new offices overseas, establishing a presence in Brazil, Norway and South Africa as well as increasing its footprint in Canada, China, India and the Middle East. This will take its total number of international offices to 30.

“This all helps to derisk exporting as far as Scottish businesses are concerned,” she says. “In fact, the risk these days lies in not exporting. You only have to look at how domestic markets are flatlining to see that.”

Though companies, especially small-to-medium-sized enterprises (SMEs), do need their confidence boosted, along with help and encouragement to take their products into international markets, there is evidence that they tend to overestimate the risk of selling abroad and underestimate the benefits. However, engagement with SDI can help businesses fully understand the
opportunity and they are more 
receptive to the idea, she says.

“In essence, there are a number of things that SDI and Scottish Enterprise can do. We can help with growth strategy and access to finance, as we have focused account managers who can provide expert advice, and we can help with leadership – we have put in place a number of useful workshops and learning journeys. This is particularly relevant for SMEs, who may be fantastic at what they do but need some help on the journey.

“Scotland has a strong reputation for innovation, and that’s something which is well respected internationally and on which we can capitalise.”

Active assistance, Anne says, can take different forms, including workshops and one-to-one conversations with companies. Another successful strategy is to offer trade missions abroad – for instance, she has just returned from a successful outing to China and Japan.

“That gave companies confidence and we got some really good outputs. For instance, one firm tripled its sales of lobster to Japan from that trip.”

Another advantage of the overseas missions, she says, is that companies come back and spread the word to colleagues, suppliers and even competitors, creating a virtuous circle of interest. “It’s a kind of real-life validation of the benefits of exporting.

“We’re a small enough country to make connections very quickly – one of the reasons we can be successful in internationalising is because of the level of collaboration between public agencies such as the Scottish Government, Scottish Enterprise and SDI, academia and industry.”

Scotland has other advantages, too. “Other countries are very receptive to our image: to the beauty of our landscapes, our golf and our whisky,” Anne says. “These are iconic, they’re interesting and they’re of a high quality.

“We’re seen as having premium-quality products such as seafood and salmon, plus our hi-tech experience in areas such as oil and gas helps to paint a picture of a country which has premium products and services to offer the world.”

SDI currently estimates that some 5,500 Scottish businesses are engaged in international activity. “While this is tremendously encouraging, we need to grow this number significantly,” Anne says.

One way of boosting Scotland’s export performance is to think smart and look beyond the obvious markets. “If we can do this, then we can gain first-mover advantage. For instance, we’re looking at 
places such as Saudi Arabia and South America.”

Another potential market is Africa: as one example, Ghana’s economy is currently growing at some 7.9 per cent a year. “There are real opportunities there in sectors such as oil and gas. We need to be innovative. We understand our key strengths and, importantly, we understand how to translate those strengths into opportunities for Scottish companies.”

China, which has expanded in the last decade or so to become the world’s second biggest economy, is an obvious target market and one which SDI has built a long-term presence. “It’s critical for us, and we are well placed in sectors such as food and drink, education and energy, particularly as China is seeking to develop renewables.

“It’s a vast country with a fast- growing middle class, providing opportunities in areas of the economy such as healthcare, life sciences products and medical devices. You can only imagine what it’s going to be like as a market in five or 10 years’ time.”

Getting into territories such as this, she concedes, is not necessarily easy. “It is complex and there are plenty of challenges, but we 
understand what needs to be done. For companies, it’s about being brave enough to take those steps and to make it happen, and we’re there to help that process.”

The range of services offered by SDI are well regarded by those who have used them and they certainly help to smooth the process. SDI can provide research material, insights into foreign markets and useful contacts, all helping smooth the process of tackling overseas territories for the first time.

Another well received service is International Manager for Hire. This provides a Scottish company with a named individual who
can operate on its behalf abroad, taking their product and service and helping to market it. “It’s a real godsend to small companies,” Anne explains.

Scotland simply cannot afford to be left behind when it comes to exporting, she says. “The good news is that we have the ability to make sure we stay ahead of the game. Times might be tough at the moment, but companies with great leadership, confidence and support have always done well in international markets, so it’s very much a glass half full.”

To find out more information about the range of SDI support available to help companies explore export opportunities in markets around the world, visit
www.sdi.co.uk/export

 

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