Going Global for Growth Volume 2 report
  • International
    • Expanding Abroad

More UK firms are looking to go global for growth

  • 4 mins
  • Article

The allure of international markets is exerting a growing pull on UK business, according to HSBC UK’s second ‘Going Global for Growth’ report. Our survey of 1,362 businesses reveals some significant changes in ambitions and sentiment since last year.

UK business has a growing appetite to trade abroad – an ambition shared by those already doing so, as well as new entrants on the international stage.

Their enthusiasm is partly fuelled by a perceived easing of the external difficulties that have made international expansion tougher in recent years.

These are among the findings of our latest research on business ambition and activity in international markets, which captured the views of 1,362 enterprises across a wide geographical and sectoral spectrum within the UK.

According to our findings, the value of the UK’s overseas trade activity is set to rise further as existing international traders implement their expansion plans – and a potential new generation of up to 1m new entrants take the plunge.

Going Global for Growth - Volume 2

Poised for growth

Of businesses already trading internationally, 87% intend to expand further over the next year. 33% are looking to grow significantly – up by 2% from last year.

Among firms currently focused only on the domestic market, 10% have ambitions to reach overseas – 2% more than in 2022. This represents around 450,0001 UK businesses poised to seize international opportunities. Together with those who say that access to more financial support or tax relief would encourage them to operate overseas, the potential pool of new entrants is around 1m.

We know that lots of businesses are aiming to grow within the UK market – but international trading opens up new dimensions of possibility that can boost that growth further and help them to address risk at home

Stephanie Betant | Head of Global Trade and Receivables Finance at HSBC UK

Target territories

HSBC Growth and Target Territories 2022-2023 Infographic

Europe remains the most popular target market for both groups. Among international businesses with growth ambitions, 7% more than last year plan to expand within the EU.

These businesses are also applying more focus on the US and Canada, up 9%, and especially on China, up 11% on last year. 28% have plans to expand in the ASEAN countries, while interest in future expansion in India has remained constant at 21%.

Tackling the challenges

In recent years, international traders have had to navigate a tough series of challenges beyond their control.

The issue of staff availability and skills is cited by 24% – still a significant number, but 9% down on last year. And the number of firms challenged by the cost of doing business overseas is also down by 9% to 30%. To some extent, these improvements reflect companies’ own actions to surmount the challenges. For example, one hospitality business told us it has joined forces with other companies to store equipment in a combined warehouse, to cut storage and shipping costs.

The practices of friend-shoring and near-shoring to minimise supply risk have gained prominence lately. Our findings suggest the use of both has doubled over the past year, albeit from low levels. 16% of growth-focused international businesses have shifted more business to friendly countries, while 11% have transferred business operations to nearby territories.

HSBC UK Challenges to business through 2024 infographic

One factor that has become more challenging since 2022 for these businesses is the competitiveness of products on the global stage. One in three globally-expanding businesses see this as a challenge; in response, 28% are actively working to improve the quality of their products, up by 13% over last year.

Funding international growth has become harder too. Almost a quarter of businesses seeking to expand their global reach say they are finding it difficult to access capital or financing, up by 7% over 2022.

An increasing number of growth-focused international businesses are deploying digital solutions for a range of purposes – from sales and customer personalisation to security and logistics. For example, blockchain and artificial intelligence are being employed to streamline processes, while cloud-based technologies have made it easier to recruit international employees and communicate seamlessly with them.

The use of third-party digital tools as a support mechanism is also on the rise, up by 9% to 27%. Some 61% of businesses see these as helpful to their growth efforts, suggesting this trend will continue.

Finally, more businesses are taking advantage of free trade agreements: FTA use has risen by 5% to 21%. There is potential for trade deals to support even more businesses, with 23% saying they would consider FTAs. In fact, improved trade deals tops the list of changes that businesses feel could make the UK more competitive.

Graph of Top 5 Actions Taken by international traders looking to expand

Benefits for all

Responding to the findings, Stuart Tait, Head of Commercial Banking, HSBC UK, was pleased by the year-on-year increase in international growth ambitions.

The dynamism of the UK’s international business ambition is integral to the future health and growth of the domestic economy. As our global activity accelerates, the benefits mount for individual businesses and the economy as a whole. At HSBC UK we are pleased to be recognised as a leading bank capable of supporting UK businesses trading overseas and have been voted the number 1 bank for trade seven years in a row ². We are determined to help UK enterprise open that world of opportunity.

Stuart Tait | Head of Commercial Banking, HSBC UK

Download the full report to find out:

  • What’s driving the growing openness to overseas trade.
  • How and where businesses are looking to grow.
  • The changes business leaders see as key to unlocking more potential.

Going Global for Growth - Volume 2

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