Our research shows a complex landscape; while the commercial benefits enjoyed by exporters are clear, so too are the wide range of barriers, both actual and perceived. We also find changing attitudes to international trade partners as British businesses predict new opportunities.
Clear benefits, different challenges
The benefits of exporting to SMEs' turnover is clear. For over a fifth (22 per cent), exports generate more than half their total revenue.
A slightly different picture emerges for SMEs not yet exporting, however. Fewer than half (45 per cent) of those we surveyed think overseas trade will be important to business growth. Their perceived barriers to export also differ from the reality of the SMEs already doing it.
A lack of international business experience, expertise, resources and contacts are of most concern to companies thinking about exporting. By contrast, for those companies already exporting, a lack of understanding of the local market and its regulatory environment, rank highest. These businesses know they have the ability to export but are more concerned about the environment in which they will be doing it.
Supporting exports is even more important following the UK's decision to leave the EU. We asked SMEs for their reflections on the trading environment following the EU referendum.
Their responses revealed a wide range of concerns, from the more short-term impact on exchange rates to the longer-term uncertainty around the UK's future trading environment, and possible future increases in tariffs.
Against this backdrop, it comes as little surprise that only 16 per cent of SMEs classed future access to the EU single market as not at all important to their exporting plans.
We are supporting our customers' international trade ambitions with our new Connections Hub and the Export Resource Centre, giving our customers the international network and exporting know-how to help grow their businesses.
Changing attitudes to international trade partners
We asked exporting SMEs which countries they expect to export to in the future. Markets in Asia are clearly on the radar, with China and India appearing in the top ten future trading destinations for current exporters, even though the current top export destinations are all established economies.
With SMEs looking increasingly to opportunities in China the importance of its 'Belt and Road' initiative, which includes infrastructure projects to boost trade links between 65 countries, looks set to grow.
The US meanwhile is the top current trading destination for 48 per cent of exporting SMEs, and is expected to remain in that position in future.
Our research found that EU member states currently comprise seven of the top ten destinations for SMEs that are already exporting, with Germany and France the second and third most popular countries. Businesses thinking of trading abroad cite five EU member states out of ten as top exporting destinations for them, although all are expected to slip down the rankings in the future.
The findings suggest that SMEs assume the US and Asian markets will hold steady in the face of uncertainty in Europe, while Australia and Canada will continue to prove attractive markets for many UK exporters.
High awareness of support services not matched by usage
SMEs we surveyed are also increasingly aware of the organisations which can support them as they embark upon a programme of international trade.
More than 90 per cent understand that there are government backed trade partners which provide support. Partners identified included Chambers of Commerce, UK embassies abroad, the former UK Trade and Investment (UKTI) which sits in the newly-created Department for International Trade (DIT), Local Enterprise Partnerships and Growth Hubs and UK Export Finance.
Despite this encouraging level of awareness, fewer than half (between 42 and 48 per cent) of SMEs already exporting actually use these agencies.
"China is a growing market, as it is more open. I am impressed with the speed of development there."