The document summarizes a student research project investigating whether the UK can achieve its target of doubling exports to £1 trillion by 2020, as set by George Osborne. The project reviewed literature on key areas like the role of government support and breaking into emerging markets. Based on the literature, the majority of sources were pessimistic about meeting the target by 2020, though some felt it was ambitious but achievable with a focus on developing markets. Economic forecasts predicted the UK would fall short by 5 years, reaching £750 billion in exports by 2020 and £1 trillion by 2025. Recent export figures also did not point to meeting the target at the current growth rate.
In the sixth of a series of reports, commissioned by HSBC, we look at China’s overseas direct investment (ODI) into developed markets and how cooperation between Chinese companies and their developed-market partners is evolving.
This paper uncovers key insights on potential collaboration between Chinese companies and businesses from the developed world. I
THE IMPACT OF TRADE LIBERALIZATION ON ECONOMIC GROWTH; THE CASE OF SUB-SAHARA...AkashSharma618775
The main aim of this research is to explore the effect of trade liberalization on economic growth in subSaharan Africa by analyzing certain macro-economic indicators using Ordinary Least Squares approach to
estimate regression equations. Many developing countries have substantially liberalized their trade regime over the
past three decades, either unilaterally or as part of multilateral initiatives. Nevertheless, trade barriers remain
high in many developing countries. One of the concerns that attributes to the reluctance of many of these countries
to liberalize their trade regime is the possible worsening of the trade balance.
This research paper is meant to give a recommendation on which macro-economic indicators sub-Saharan African
countries should pay particular attention to, implementing the necessary policies to ensure its effectiveness thereby
ensuring a step-up in those aspects of the economy in order to promote development. It considers 46 different
countries with different economic policies in sub-Saharan Africa for a 14-year period. Most papers considering
sub-Saharan African region consider a selected few countries based on certain economic reasons of their choice,
and those who consider most countries in the region have different macroeconomic indicators they employ for their
modeling. This paper considers if not all, almost all sub-Saharan African countries regardless of their economic
status.
In the sixth of a series of reports, commissioned by HSBC, we look at China’s overseas direct investment (ODI) into developed markets and how cooperation between Chinese companies and their developed-market partners is evolving.
This paper uncovers key insights on potential collaboration between Chinese companies and businesses from the developed world. I
THE IMPACT OF TRADE LIBERALIZATION ON ECONOMIC GROWTH; THE CASE OF SUB-SAHARA...AkashSharma618775
The main aim of this research is to explore the effect of trade liberalization on economic growth in subSaharan Africa by analyzing certain macro-economic indicators using Ordinary Least Squares approach to
estimate regression equations. Many developing countries have substantially liberalized their trade regime over the
past three decades, either unilaterally or as part of multilateral initiatives. Nevertheless, trade barriers remain
high in many developing countries. One of the concerns that attributes to the reluctance of many of these countries
to liberalize their trade regime is the possible worsening of the trade balance.
This research paper is meant to give a recommendation on which macro-economic indicators sub-Saharan African
countries should pay particular attention to, implementing the necessary policies to ensure its effectiveness thereby
ensuring a step-up in those aspects of the economy in order to promote development. It considers 46 different
countries with different economic policies in sub-Saharan Africa for a 14-year period. Most papers considering
sub-Saharan African region consider a selected few countries based on certain economic reasons of their choice,
and those who consider most countries in the region have different macroeconomic indicators they employ for their
modeling. This paper considers if not all, almost all sub-Saharan African countries regardless of their economic
status.
Entrepreneurship as a determinant of fdi in case of georgiaAzer Dilanchiev
Abstract
Attraction of Foreign Direct Investment (FDI) is the one of the main priorities for Georgia. Liberal investment environment and
equal approach to local and foreign investors makes country as an attractive destination for FDI. The paper focuses on relation
between entrepreneurship and FDI in case of Georgia, to find out the role that entrepreneurship takes as a determinant of FDI.
The paper empirically proves that in order to attract FDI, development of entrepreneship is vital.
The positive impact of fdi in many sectors of the economy that Kosovo but not...nakije.kida
Abstract
In this paper is investigated Kosovo great desire to integrate into the global network of investment after
a war. FDI flows continue to be provided for development of Kosovo. The development of
manufacturing sector and processing industry and tourism in some territories of Kosovo is also a
challenge that must be resolved because it will affect economic development, employment generation
continued. Withdrawal of modern technology in these sectors would help in maintaining the balance
between the different benefits and a clean environment. Environmental concerns caused by FDI in some
territories of Kosovo are fundamental problems that require solutions. Elimination of barriers to FDI,
the strengths and weaknesses that were offered to investors are the primary issues that attract
investment. Except FDI are in positive correlation with GDP, at the national level factors of human
resource allocation are important in the territories where the population movement due to the
economic stagnation, and such cases can be found in Kosovo.
Keywords
Kosovo after the war, impact of FDI, desire for global integration, living standard, sectors,
environment
This study investigates specifically the effect of Imports and Exports on Balance of Foreign Trade in Nigeria (GDP). Data were collected for period 2007 – 2016. Multiple Regressions Approach and Correlation Analysis was used, defining Imports, Exports and Openness as independent variables and Gross Domestic Product (GDP) as dependent variable. From the analysis, Imports, Exports and Openness contributes immensely to the Nigeria Gross Domestic Product (GDP). Contrary, Imports is positively and significant on Balance of Foreign Trade in Nigeria (GDP), Exports has positively and insignificant on Balance of Foreign Trade in Nigeria (GDP) and Openness has positively and insignificant on Balance of Foreign Trade in Nigeria (GDP). Also, there is a perfect positive association on gross domestic product between imports on the balance of foreign trade in Nigeria and it is significant, with a perfect positive association on gross domestic product and imports between exports on the balance of foreign trade in Nigeria and it is significant and there is a negative moderate association on gross domestic product, imports and exports between openness on the balance of foreign trade in Nigeria and it is insignificant. This study therefore recommends that Nigeria should enhance her Imports & Exports promotion strategies and expanding the Import sector for easy importation.
External Trade Benefits and Poverty Reduction in English Speaking West Africa...iosrjce
This research examines the impact of external trade benefits on poverty reduction in five English
Speaking West African Countries (ESWACs) from 1980 to 2013. These countries include; The Gambia, Ghana,
Liberia, Nigeria and Sierra Leone). The study expressed external trade benefits (ETB) as increase in export
earnings (EXE), trade openness (TOP), total government expenditure (TGE) and reduction in foreign exchange
rate (FER), while poverty level is expressed as real gross domestic income (GNI) per capita current US Dollar.
Theoretically, the study relied on five trade theories, in practice; the study constructs a balanced panel data
structure (BPDS) and methodologically, departs from the classical OLS and 1st generation panel econometric
techniques to adopting recently developed 2nd generation panel data econometric methods. The results of the
study reveal that external trade benefits were not found to be significant enough to reduce the poverty level in
ESWACs from 1980 to 2013.This impliesthat external trade benefits did not significantly increase GNI per
capita in ESWACs within the period of study. Based on this result, the study therefore concluded that the impact
of external trade benefits on poverty level is a trivial matter because external trade benefits have not
comprehensively and significantly augmented the status of real gross domestic income (GNI) percapital
currentUSDollar of English speaking West African countries within the period of study. Following this
conclusion we recommended, among others, that policy implication on the result of co-integration of the panel
equation 2 is that more credible expansionary fiscal policy should be pursued as this will help to pump more
money into circulation with the aim of creating and expanding employment opportunities that would be able to
reduce poverty in the region and cut in public investment spending on agriculture and industrial sectors should
be avoided so that the countries will be encouraged to produce locally and also export.
Every month, Atradius brings you an up to the minute snapshot report on a range of export markets and key trade sectors. Our underwriters have a specialist view of the world economy – and the industries that make that economy tick - that you won’t find in the general press coverage of events.
Even more importantly, our underwriters use their expertise and experience to look to the future. In each edition of Atradius Market Monitor you’ll find our outlook for a number of key market economies.
In this issue…
…we feature the following markets:
The Netherlands – with a spotlight on construction and transport industry sectors
Spain – with a spotlight on construction and automotive industry sectors
United States of America
Belgium
Austria
Ireland
Poland
Indonesia
Impact of Foreign Debt on Economic Growth in Zimbabweiosrjce
The study investigates the impact of foreign debt on economic growth in Zimbabwe. Time series data
covering the period 1980 -2013 is analysed using ordinary least squares regression. Labour force, capital
investment, and trade openness are used as control variables. The results show that external debt and trade
openness impact negatively on economic growth in Zimbabwe while capital investment and labour force growth
has a positive effect. The study recommends that the country should not heavily rely on foreign borrowing to
finance economic growth but should rather create a conducive environment for alternative sources of foreign
funds such as project finance and foreign direct investment. It is further recommended that the country should
curb excessive imports of consumables and encourage value-added exports by local manufacturers.
Chinese investment in Spain topped 600 million euros in 2014, according to an ESADE study.
According to this report, 93.8% of Chinese direct investment in Spain since 2000, some €1.662 billion, occurred in the 2012-2014 period. Of that amount, €610 million was invested in 2014, 49% more than in 2013. Moreover, by the end of the year, total investment in 2015 could be even higher, as a result of various major transactions recorded over the last six months in the real estate/hotel and agribusiness industries.
Our management team is considering investing in a foreign country and has requested a report regarding the attractiveness of alternative countries based on the potential return of FDI.
Session 2 tanaka trade and investment in cambodiantuperc
The objective of this chapter is to document a pattern of international trade and FDI in Cambodia. First, I start to briefly review the Cambodian economy in recent decades. Second, I describe a recent trend in export and import in goods and illustrate the pattern of exports and imports disaggregated by major partner countries and major commodities. Describing a trend in inward FDI, I also show the pattern of inward FDI disaggregated by major home countries and industrial sectors. As the overall trend in trade and FDI indicates the large role of garments and footwears, I describe the garment and footwear sectors in more detail.
Specifically, I use the Cambodian economic census for 2011 to describe the size of these sectors in manufacturing sectors and the pattern of trade and inward FDI in these sectors.
Entrepreneurship as a determinant of fdi in case of georgiaAzer Dilanchiev
Abstract
Attraction of Foreign Direct Investment (FDI) is the one of the main priorities for Georgia. Liberal investment environment and
equal approach to local and foreign investors makes country as an attractive destination for FDI. The paper focuses on relation
between entrepreneurship and FDI in case of Georgia, to find out the role that entrepreneurship takes as a determinant of FDI.
The paper empirically proves that in order to attract FDI, development of entrepreneship is vital.
The positive impact of fdi in many sectors of the economy that Kosovo but not...nakije.kida
Abstract
In this paper is investigated Kosovo great desire to integrate into the global network of investment after
a war. FDI flows continue to be provided for development of Kosovo. The development of
manufacturing sector and processing industry and tourism in some territories of Kosovo is also a
challenge that must be resolved because it will affect economic development, employment generation
continued. Withdrawal of modern technology in these sectors would help in maintaining the balance
between the different benefits and a clean environment. Environmental concerns caused by FDI in some
territories of Kosovo are fundamental problems that require solutions. Elimination of barriers to FDI,
the strengths and weaknesses that were offered to investors are the primary issues that attract
investment. Except FDI are in positive correlation with GDP, at the national level factors of human
resource allocation are important in the territories where the population movement due to the
economic stagnation, and such cases can be found in Kosovo.
Keywords
Kosovo after the war, impact of FDI, desire for global integration, living standard, sectors,
environment
This study investigates specifically the effect of Imports and Exports on Balance of Foreign Trade in Nigeria (GDP). Data were collected for period 2007 – 2016. Multiple Regressions Approach and Correlation Analysis was used, defining Imports, Exports and Openness as independent variables and Gross Domestic Product (GDP) as dependent variable. From the analysis, Imports, Exports and Openness contributes immensely to the Nigeria Gross Domestic Product (GDP). Contrary, Imports is positively and significant on Balance of Foreign Trade in Nigeria (GDP), Exports has positively and insignificant on Balance of Foreign Trade in Nigeria (GDP) and Openness has positively and insignificant on Balance of Foreign Trade in Nigeria (GDP). Also, there is a perfect positive association on gross domestic product between imports on the balance of foreign trade in Nigeria and it is significant, with a perfect positive association on gross domestic product and imports between exports on the balance of foreign trade in Nigeria and it is significant and there is a negative moderate association on gross domestic product, imports and exports between openness on the balance of foreign trade in Nigeria and it is insignificant. This study therefore recommends that Nigeria should enhance her Imports & Exports promotion strategies and expanding the Import sector for easy importation.
External Trade Benefits and Poverty Reduction in English Speaking West Africa...iosrjce
This research examines the impact of external trade benefits on poverty reduction in five English
Speaking West African Countries (ESWACs) from 1980 to 2013. These countries include; The Gambia, Ghana,
Liberia, Nigeria and Sierra Leone). The study expressed external trade benefits (ETB) as increase in export
earnings (EXE), trade openness (TOP), total government expenditure (TGE) and reduction in foreign exchange
rate (FER), while poverty level is expressed as real gross domestic income (GNI) per capita current US Dollar.
Theoretically, the study relied on five trade theories, in practice; the study constructs a balanced panel data
structure (BPDS) and methodologically, departs from the classical OLS and 1st generation panel econometric
techniques to adopting recently developed 2nd generation panel data econometric methods. The results of the
study reveal that external trade benefits were not found to be significant enough to reduce the poverty level in
ESWACs from 1980 to 2013.This impliesthat external trade benefits did not significantly increase GNI per
capita in ESWACs within the period of study. Based on this result, the study therefore concluded that the impact
of external trade benefits on poverty level is a trivial matter because external trade benefits have not
comprehensively and significantly augmented the status of real gross domestic income (GNI) percapital
currentUSDollar of English speaking West African countries within the period of study. Following this
conclusion we recommended, among others, that policy implication on the result of co-integration of the panel
equation 2 is that more credible expansionary fiscal policy should be pursued as this will help to pump more
money into circulation with the aim of creating and expanding employment opportunities that would be able to
reduce poverty in the region and cut in public investment spending on agriculture and industrial sectors should
be avoided so that the countries will be encouraged to produce locally and also export.
Every month, Atradius brings you an up to the minute snapshot report on a range of export markets and key trade sectors. Our underwriters have a specialist view of the world economy – and the industries that make that economy tick - that you won’t find in the general press coverage of events.
Even more importantly, our underwriters use their expertise and experience to look to the future. In each edition of Atradius Market Monitor you’ll find our outlook for a number of key market economies.
In this issue…
…we feature the following markets:
The Netherlands – with a spotlight on construction and transport industry sectors
Spain – with a spotlight on construction and automotive industry sectors
United States of America
Belgium
Austria
Ireland
Poland
Indonesia
Impact of Foreign Debt on Economic Growth in Zimbabweiosrjce
The study investigates the impact of foreign debt on economic growth in Zimbabwe. Time series data
covering the period 1980 -2013 is analysed using ordinary least squares regression. Labour force, capital
investment, and trade openness are used as control variables. The results show that external debt and trade
openness impact negatively on economic growth in Zimbabwe while capital investment and labour force growth
has a positive effect. The study recommends that the country should not heavily rely on foreign borrowing to
finance economic growth but should rather create a conducive environment for alternative sources of foreign
funds such as project finance and foreign direct investment. It is further recommended that the country should
curb excessive imports of consumables and encourage value-added exports by local manufacturers.
Chinese investment in Spain topped 600 million euros in 2014, according to an ESADE study.
According to this report, 93.8% of Chinese direct investment in Spain since 2000, some €1.662 billion, occurred in the 2012-2014 period. Of that amount, €610 million was invested in 2014, 49% more than in 2013. Moreover, by the end of the year, total investment in 2015 could be even higher, as a result of various major transactions recorded over the last six months in the real estate/hotel and agribusiness industries.
Our management team is considering investing in a foreign country and has requested a report regarding the attractiveness of alternative countries based on the potential return of FDI.
Session 2 tanaka trade and investment in cambodiantuperc
The objective of this chapter is to document a pattern of international trade and FDI in Cambodia. First, I start to briefly review the Cambodian economy in recent decades. Second, I describe a recent trend in export and import in goods and illustrate the pattern of exports and imports disaggregated by major partner countries and major commodities. Describing a trend in inward FDI, I also show the pattern of inward FDI disaggregated by major home countries and industrial sectors. As the overall trend in trade and FDI indicates the large role of garments and footwears, I describe the garment and footwear sectors in more detail.
Specifically, I use the Cambodian economic census for 2011 to describe the size of these sectors in manufacturing sectors and the pattern of trade and inward FDI in these sectors.
Innovation Policy by Fergus Harradence BISTal Oron
A presentation by the deputy director for innovation policy, Mr. Fergus Harradence @ a talk organized by the Entrepreneurs Interactive Society, Imperial Business School
Presentation by David Smith of the Sunday Times at the Single Ply Roofing Association Conference 2019 at Heythrop Park, Oxfordshire.
More information:https://spra.co.uk/events/spra-awards-2019-live-blog/
As current growth rates reach a new low, competition for the future is on the...SimCorp
As growth rates came to a standstill in 2015, we took stock of expectations for the future. Surveying firms worldwide, we discovered them to be optimistic about long-term prospects, and found the pursuit of future profits gathering pace.
The “special relationship” between the US and UK has acquired new momentum among Britain’s entrepreneurs recently. Over half (55%) of UK small and medium sized
enterprises (SMEs) that export abroad count the US among their markets, making the US their top export destination.
Similar to ECC142 Project Report - UK exports - Oliver Wright B219609 (20)
ECC142 Project Report - UK exports - Oliver Wright B219609
1. LOUGHBOROUGH UNIVERSITY
Is a £1 trillion export target
achievable for UK
businesses?
George Osborne’s 2012 budget report
Oliver Wright
1/19/2015
This report will be focusing on the likelihood of the United Kingdom in doubling its exports, when
George Osborne made his report, with emphasis on the key areas that will make this goal attainable.
2. Executive Summary
This project will study the UK exports in achieving the £1 trillion goal set out by George
Osborne in the 2012 budget report. Looking at key areas, is this an attainable target, using
historical data and forecasting future outcomes.
This topic is important because it is known that for a country to have a sustainable growth
model; exports (having a trade surplus) must be the centre of this. If the UK wants to be one of
the most powerful economies, like China (the largest exporter at over £1.2 trillion), it needs to
focus its government spending on schemes to enhance exports.
The literature is mainly based around business investment and how that impacts international
trade levels. A lot has been written about the government’s efforts to reach the goal with internal
goals within organisations with will aid the target. The key companies that are being targeted are
small and medium enterprises (SMEs). It is important to increase the number of companies
exporting and the smaller firms need greater support financially and with advice. Many
documents give details of the amount of funding and percentage of businesses that export.
Another factor that comes up is the opportunities in emerging markets; since 2010 there has been
a 91% increase in exports to China and a 118% increase in exports to Russia, showing just how
large to potential is in those kinds of markets (Tovey, 2013).
There are limited studies looking into what effect it would have on the UK economy if the target
was reached. Most of the literature is pessimistic about the target and there is no mention of the
benefits it would bring to the citizens welfare. There are questions raised whether the UK
infrastructure could support the increase demand from exports, especially on airports and ports;
many believe much expansion is needed.
This project report has investigated what is needed to in happen in order for the UK to reach the
export goal. Is it an achievable goal given the government’s role in the success and whether
domestic businesses can break into new markets and succeed in them? There will be specific
focus on government intervention and diversifying into emerging markets, looking at the views
of experts in the field.
There was a lot of information illustrating the amount of support such government organisations,
like UK Trade and Investment (UKTI), offer and some people felt that they were doing enough
to help businesses grow their export markets. Offers looked at the apparent under investment
given to exporters compared with other nations and wanted to be see more spending to help
smaller companies. Others have highlighted to need to pursue fast-growing markets in order to
achieve the target.
Most people believe that the target will be missed, only by a few years, but is an encouraging
sign for UK businesses to set up capital investment and start exporting. I feel that the target
won’t be reached, but it does give a good precedent for UK businesses.
3. Contents
1. Introduction..............................................................................................................................1
1.1 Aims .................................................................................................................................1
1.2 Main areas of focus ..........................................................................................................1
2. Literature Review ....................................................................................................................2
2.1 The current situation of the UK economy.............................................................................2
2.2 The governments role............................................................................................................4
2.3 Breaking into developing markets ........................................................................................5
3. Methodology............................................................................................................................6
4. Results......................................................................................................................................7
5. Discussion of the results ..........................................................................................................8
6. Conclusion.............................................................................................................................10
Bibliography..................................................................................................................................11
4. 1
1. Introduction
1.1 Aims
The purpose of this report is to investigate whether or not it is achievable for the United
Kingdom to effectively double its exports by 2020. George Osborne made it clear in the 2012
budget report that he wanted to challenge UK businesses to reach £1 trillion in exports within an
8 year period. We are now only 5 years away from this so it should give us a better
understanding of whether this goal will be achieved and what needs to be done in order to
achieve it.
1.2 Main areas of focus
I will be exploring a few key areas which I have focused my research on. There have been
certain topics that have had a lot of information about due to the importance of them in
achieving the goal. The main subject I have looked into is the role of the government in aiding
UK businesses; there have been numerous government publications about all the support it plans
to give and different proposals it means to put in place. There are many articles that see
government intervention as the only way to achieve the goal.
Other areas include diversifying into the emerging markets; Brazil, Russia, India and China
(BRICs) by breaking down the barriers to trade. With emerging markets growing at a fast pace,
exporting to such nations will give Britain a great advantage in reaching the target.
5. 2
2. Literature Review
2.1 The current situation of the UK economy
With the UK recovering from the financial crisis, it seems that business investment isn’t
following suit. The UK’s growth is unbalanced, from 2010 to 2013, capital investment has fallen
(figure 1), and total industrial production as declined. To add to the poor performance of capital
investment, in the first half of 2013, business investment was at its lowest on record since the
ONS database started in 1997. (Smith, 2013).
Figure 1. UK Capital Investment (Smith, 2013)
This is not a sustainable recovery; the lack of investment will significantly hinder the UK’s
ability to reach the export target because businesses are not investing in new capital, this means
they’re pessimistic about the future and are not willing or able to increase production and export
to new markets.
David Cameron spoke about diversifying into new markets; in 2010, the UK exported more to
Ireland than it did to the BRICs combined. David Cameron is well aware that the barriers to
trade between these countries need to be tackled. (Gordon, 2013).
In 2012, UK’s investment suffered one of the biggest falls in the G8, this is concerning for UK
businesses as it leads to lower competitiveness on the global market because of the lack of new
equipment and technologies. Britain invests a lower percentage of its GDP (Gross Domestic
Product) than all other leading industrial nations. (Inman, 2013).
The UK’s main export partners are the United States (14%), Germany (10%), France (7%), the
Netherlands (6%) and Ireland (4.5%) (ONS, 2015).
6. 3
For the UK to achieve the goal, exports would need to increase at a rate of around 10% year on
year. Clive Memmott, Chief Executive of the Chamber, believes the plan to boost exports is a
positive one, but is sceptical over the time framed placed on such a large change (Greater
Manchester Chamber of Commerce, 2014, p. 12).
In 2012, export figures for the UK for goods and services amassed over £490 billion, meaning
the target level of £1trillion is roughly double. In the last five years there as been a 30% rise in
exports. 1 in 6 UK-based companies export. In the World Trade Organisation league table; the
UK is 11th for goods exported and 2nd for its services (EEF, 2014, p. 1).
Figure 2. UK top 20 Export Nations (HM Revenue and Customs)
7. 4
2.2 The governments role
An article from the Telegraph has shed some light on the small amount of government spending
it invests in exports; less than £333 million, whereas twenty-five times as much is given in
overseas aid. John Longworth, director-general of the British Chambers of Commerce, believes
that British exporters are “grossly underfunded by comparison with competitor nations” (Tovey,
2013). This tells me that in order for the UK to turn into a top 5 exporting nation; the
government needs to increase its spending on international trade.
The UK Trade and Investment (UKTI) is a government organisation that deals with international
trade and inward investment promotion. It provides support to new and existing exporters of
goods and services. Many of the articles and reports I read believe that UKTI do offer an
extensive range of guidance and funding, however, the general consensus being that most
businesses don’t know about UKTI or its services it provides. Katja Hall, CBI Chief Policy
director, speaking to the Telegraph “A study found 69% of SME (Small and Medium Enterprise)
exporters were unaware of UKTI and 2/3s didn’t know about UK Export Finance” (Tovey,
2013). It is clear that not only is there a lack of resources being use to increase exports and
business investment, but another key issue is the information being provided to educate
businesses about the amount of support available to them if they are planning on exporting for
the first time or to break into an emerging market.
An article from Trade Finance reviews what UKTI has done in the period of 2012-2013. It has
aided 29,320 businesses and £235.6 million worth of trade. As well as spending £81.2 million on
foreign direct investment (FDI). UKTI set itself a target to reach in 2020, increasing the amount
of UK businesses that export. It wants to reach 25% of companies exporting by 2020; increased
by a quarter. This would represent around 100,000 firms (Gordon, 2013). This is a far more
modest target than the one George Osborne set.
In more recent government news, a press release from gov.uk stated that there has been a 50%
increase in export support to businesses. UK Trade and Investment (UKTI) supported 47,960
businesses, from 2013 to 2014, to export for the first time or to find a new market to export into.
(Livingston, 2014).
The government are obviously extremely determined in reaching its goal; they are putting a lot
of resources into doing so, but some academics still feel that there is more that is needed to be
done by the government in supporting UK businesses to achieve the target.
8. 5
2.3 Breaking into developing markets
Many articles put the emphasis on the support that small and medium firms need in order to
break into the fast-growing emerging markets.
Figure 3. Source CITY A.M
Figure 3 shows the contrast between the nations the UK predominately exports to, and the
emerging nations it is forecasted to export to over a 5 year period.
RBS economists have devised an index illustrating the benefits of trading with foreign markets
to the UK; on a scale of 0 (no match) to 1 (perfect match); with Brazil ranking high with 0.62,
just behind the US with 0.65. Given the vast difference in trade from the UK to those two
countries, it seems like the UK can see as much benefit in exporting a similar amount to Brazil.
Around 40% of what Brazil’s imports are goods or services that the UK exports large quantities
of. This shows just how big of an impact it would make to the export goal in securing a trading
platform with Brazil. The research conducted by RBS also portrayed Mexico, Taiwan and
Turkey as other suitors to the UK’s export market. (Ward-Proud, 2013).
Knowledge about domestic regulation is important; organisations such as UKTI help companies
looking to export to unfamiliar foreign markets, information such as this is important to
determine whether a firm has the confidence to export into a new market. Therefore, greater
awareness is needed about the support government organisations offer; this comes through
advertising.
9. 6
An article from the Guardian, backed by influential MPs, believes that the UK will miss the
export target unless more government help is given to secure trade in the fast-emerging markets.
The cross-party public accounts committee (PAC) argues that the government aren’t giving
adequate aid to SMEs. This source may be overly biased due to the head of PAC being a labour
MP, Margaret Hodge. (Monaghan, (2014).
An annual report from UKTI believes its efforts to expand market diversity have been very
successful. It boosts, since 2010, a large increase in exports to the BRIC nations; a 37% increase
to Brazil, 39% to Russia, 24% to India and 52% to China. It would be easy to focus solely on the
emerging countries but, during that period, exports to the EU and the US saw continued growth
(UKTI, 2014).
The majority of sources believe that government support is paramount for UK businesses trying
to break into new markets, but little give any recommendations how to go about this. From what
I have learnt, UKTI and other government organisations specialising in trade, are working very
hard to see the objective is made. It seems the support and finance is there, but maybe not
enough is known about these institutions by the people that need their help.
3. Methodology
This project report was constructed using secondary data reviewed initially through the
university catalogue plus to obtain academic journals relating to my research topic. It was from
these papers that I generated my question and gave me knowledge of the key issues that I need to
focus the majority of new research from. The predominant database for research journals was
EBSCOhost. Reading academic abstracts gave me a better understanding of where gaps were in
the academic papers, so other means of research was necessary. This was partly due to the nature
of my question; its outcome will be determined in the future. I examined a lot of government
documents such as budget reports and statements relating to new project proposals and funding
to businesses.
To keep up to date with current views and beliefs about the outcome of my report, I trawled
through a number of economic and political websites, paying close attention to any bias or
prejudice, with a few respected newspapers having useful articles; giving different views on
success or failure also adding to the areas of focus that had been apparent in the academic
journals I had been reading. Using the references from some of these websites gave me access to
10. 7
different styles of reports, one being UKTI annual report and others from key business sectors
such as ‘The Manufacturers’ Organisation’.
I found a very useful article put together by EEF and The Telegraph which keeps track of the
export progress, called Export Dashboard.
4. Results
My question that I researched was whether or not the UK will reach the export target set by
George Osborne. Because this information will only become available in 2020, the year the
target is set for, my results can only give me a forecast of what is likely to happen.
There is no clear consensus about if the target will be reached or not. The majority of my
references believe it isn’t going to happen, with the National Audit Office saying it is not likely
(Gordon, 2013). The article also draws light to economic forecasts carried out by the
International Monetary Fund and the Office of Budget Responsibility, both illustrating that the
target will not be met by 2020.
Other reports are less pessimistic about the outcome, Lord Ian Livingston of Parkhead feels that
the target is ambitious but shows the government’s true desire to improve the UK’s export
performance. In his eyes, UKTI are doing enough to support businesses in achieving the goal
and sees the developing markets as the area of focus in assuring success (UKTI, 2014).
Deputy Director-General of CBI, Katja Hall agrees with Lord Livingston stating that the target is
achievable- but ambitious. However, she is cautious about being overly focused on these fast
growing markets, exporters should not forget about the UK’s main export partners of the USA
and the EU. Katja places the fate more towards the knowledge of markets, insisting that 69% of
SMEs are unaware of the support provided by government organisations (Tovey, 2013).
Clive Memmott, Chief Executive of the Chamber of Commerce, doesn’t believe that the 2020
target is a reasonable time frame. This claim comes off the back of research committed to
forecasting the export growth, which puts the UK 5 years behind schedule. The economic
models and forecasts have predicted a figure of around £750 billion in exports by 2020, and only
reaching the target by 2025. The forecast assumes a 6% increase in exports per year, some way
off the 10% needed to achieve the goal (Greater Manchester Chamber of Commerce, 2014, p.
13).
11. 8
Looking at the recent figures of exports from the export dashboard from the telegraph, it shows
exports at £503.1 billion in March 2014. This figure doesn’t put the target as a realistic chance if
that level of growth continues. The publication goes on to comment on the mix performance of
exports, which will surely hinder the progress unless exports increase each month. The quarter
(Q1 2014) ended up being negative (Pettigrew, 2014).
An all together different view from a CBI report believes the UK has a large comparative
advantage in some sectors. Services have had a growing trade surplus meaning that it has a
lower only opportunity cost in producing services. This is due to the level of skilled labour;
Services are skilled labour intensive and the UK are skilled labour abundant, so the Heckscher-
Ohlin-Samuelson Model would assume the UK to have a comparative advantage in services and
therefore should specialise in that industry to gain the greatest welfare (CBI, 2013).
5. Discussionofthe results
My results tell me that it is unlikely that the UK will reach the desired outcome in 2020. This is
may be due to the government not doing enough to aid businesses; at the start of section 2.2, I
mentioned that the UK doesn’t invest as much money into exports compared with competitor
nations. Continuing this point, the support provided by last organisations such as UKTI, from the
literature I have spoken about, shows just how much information and guidance is available to
uneducated businesses seeking that edge to give them a foothold into a new market or even
export for the first time. However, Katja Hall spoke about the amount of small and medium
business (the ones needing the support the most) not knowing about what UKTI offer, or worse
still, not knowing what UKTI is! It is said that the smaller businesses are 11% more likely to
survive if they are exporting.
One of the reasons why the target may not be reached is due to low business confidence. Having
all the support and funding is useless if producers don’t feel safe about the economic situation.
Looking at the investment side of businesses has a large impact on exports; if businesses are
renewing and expanding their current capital stock, they believe that it is not profitable to do so
with the current demand. And if businesses are reducing supply; exports will be severely
impacted. In recent years, businesses have been substituting labour for capital due to the shift
from long term goals to short term survival. This is partly down to the Eurozone crisis (the UK’s
largest exporter) which damaged the confidence of exporters.
12. 9
Out of all the forecasts I have seen calculated in this area, none have put the UK reaching the
goal. It is for this reason I believe that the target will not be achieved in the time frame set by
George Osborne. The figures from the Chamber of Commerce illustrate that it is likely to be hit
five years later due to the revised export increase of 6% and not the 10% that was needed
(Greater Manchester Chamber of Commerce, 2014).
Looking at Current figures of export growth from the ONS (Office of National Statistics) before
the middle of 2013, exports looked to be on track, but poor performance in the back of 2013 and
throughout 2014 has been detrimental to success.
The target was too ambitious given the current recovery and the volatility of foreign market
demand.
Looking at figure 3 in section 2.3 does give me confidence that businesses are getting the
knowledge about these markets, and with the help of UKTI, the forecasts should be reached.
Although that won’t be enough to secure the £1 trillion export target.
13. 10
6. Conclusion
The success of this ambitious target will depend on the effectiveness of UK businesses in setting
up strong trade networks in the fast-growing markets. My research has lead me to believe that
getting into new markets and dealing with foreign regulations will not be the issue because the
government organisations have a wealth of knowledge and experience in dealing with new
markets. I will be keeping up to date with the progress of British exports through Export
Dashboard, set up by The Telegraph and EEF.
On reflection, given all the academic and political professionals voicing their opinions, it seems
that the export target has created a lot of attention for the need to improve the trade deficit. For
the UK to achieve such a feat would have meant record breaking growth rates at a time of low
confidence and uncertainty. It is my belief that hitting George Osborne’s target is important but
not the defining factor in the success of the goal. It sent out a message to businesses that the
government is serious about re-balancing the economy towards exports and capital investment. It
has created a better understanding of the support available to companies wanting to export, but
haven’t got the expertise.
If it has done anything, it has given producers confidence about future demand outside of the UK
and will increase the capital investment needed to grow firms and gain higher productivity
through better technologies; this will give firms the comparative advantage over foreign firms on
the world market.
14. 11
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