In a report published today by the CBI and accountancy giant Ernst & Young, business leaders will call on the UK government to set out a clear exports strategy with “ambitious, achievable performance targets”.
CBI director-general John Cridland said the UK’s trading performance had been lacklustre in recent years and the country was over-dependent on trade with other advanced economies. He said: “The continued crisis in the eurozone underlines just how important it is for the UK to diversify its export efforts to high-growth countries.
“Given that we’re already playing catch-up with many of our competitors, we must act now or never to target high-growth economies, leapfrog the competition and deliver growth.
“We need to capitalise on the booming success of the Bric countries [Brazil, Russia, India, China], and look beyond the curve to future high-growth markets such as Indonesia, Mexico and Turkey.”
Only 4 per cent of UK exports are currently going to the Bric nations, whose economic growth rate is much higher than that of Britain’s major markets in Europe and the United States.
The CBI’s calls come as Jim O’Neill head of Goldman Sachs’ $800bn (£500bn) asset management division, predicted that China will overtake the US as the world’s largest economy in 16 years’ time.
Meanwhile, Britain is hosting the Colombian president and a visit from the Turkish premier is scheduled shortly after that. They are two of the countries that economists are tipping to be in the next wave of rising economic powers, as their dynamic young populations start to enjoy more economic freedoms.
The CBI has identified several areas where the UK has high potential to export to these emerging markets in the next decade. Construction services, communication, electrical goods, high-tech goods and financial services could all benefit from rocketing demand in countries where domestic firms lack the expertise to fulfil it.
The study, released to mark the business group’s annual conference in London, says small and medium-sized companies have the most potential to grow, so the UK should aim to match the European Union average of one in four SMEs exporting by 2020, compared with only one in five currently.
CBI Scotland assistant director David Lonsdale welcomed the report, saying the governments in London and Holyrood needed to do more to help exporters.
He pointed to aviation as a key strategic area where policy should change and called on Scottish ministers to provide funding to help establish more direct air connections to key overseas business destinations.