EY ITEM Club Special Report on Exports
Winning the global race: easier said than done
The UK government regularly refers to Britain being in a “global race” for export success. This report confirms just how competitive this race is.
Despite growing export volumes since the middle of 2009, the UK has seen its share of world trade fall. Germany by contrast has increased its share by two- fold in comparison to the UK.
The challenge is clear: successful exporters target the right markets with a very competitive product offer, backed by top-class infrastructure and services. All of these pieces must come together to enable export success.
For the UK, these challenges are compounded by fierce competition from rival exporters such as Germany and the US – which have been driving competitiveness relentlessly as the UK effectively treads water, and continue to grow their advantage over the UK on labour costs.
Against this background, UK exporters need to pick their battles and be very clear on where they should compete. Here are the key steps in making the right choices:
- Identify the markets with the best growth prospects – including drilling down to the prospects for products and services within individual countries. While China and India are growing faster than western economies, demand growth for specific products will vary by segment and region.
- Assess the competitiveness of individual goods and services for these potential markets. For example, our report identifies particularly strong growth potential for UK exports of chemicals, certain manufactured goods and machinery, and food and beverages.
- Evaluate the scope to differentiate the offer. Differentiating on price alone tends to offer transient advantages at best as competitors respond. So companies should capitalise on other sources of competitive advantage, such as “Brand UK” and our reputation for design quality.
- Seek out opportunities to mitigate any structural weaknesses impacting the export offer, whether by lobbying government or supporting industry-led initiatives to improve skills.
The UK is making headway in the global race for exports. But now is no time for easing off: to seize the export opportunity, business and government must up the pace.