Louis Taylor tells The Manufacturer why the government has published its new Export Strategy, and what manufacturers need to know about it.
As the CEO of UK Export Finance (UKEF), the UK’s export credit agency, I meet companies that export every day. I know first-hand from them that selling overseas can be transformative for a business.
It diversifies your market, brings new customers and increases productivity. It can also make you more competitive at home, inspiring innovation by learning from what’s done in other countries. All the research shows that exporters create more jobs, are more productive and, above all, more enduring.
Take, for example, Kelvin Hughes, a proudly British manufacturer whose history goes back over 250 years – its 18th century founders included Henry Hughes, who sold chronometers to the explorer Captain Cook and Captain Bligh of HMS Bounty fame; and in the 19th century the renowned scientist and inventor Lord Kelvin.
It has been pioneering technical innovation ever since, and today supplies cutting-edge security, surveillance and navigational systems for operators across land and sea – including governments, agencies and 30 navies around the world. Today, 80% of Kelvin Hughes’ business is exported.
A great trading nation
Kelvin Hughes really embodies the UK’s long history as a great trading nation. Exports currently make up 30% of GDP, contributing around £620bn to the economy last year – and of this, £270bn was down to manufacturers like you selling overseas.
But the government believes that there’s potential for the UK to be an even greater trading nation. The Department for International Trade estimates that hundreds of thousands of businesses believe they could export but don’t, despite the fact that demand for British expertise and goods overseas is growing.
That’s why, earlier in the summer, the Secretary of State for International Trade, Liam Fox, published the Export Strategy, as part of the government’s Industrial Strategy to create a more prosperous Britain.
Visit www.great.gov.uk/get-finance to find out how UKEF can support your exports.
The Export Strategy looks at the barriers companies face when exporting, and identifies the solutions that government is able to provide, including by convening the best of what the private sector has to offer.
Help where it’s needed for businesses to grow internationally
In response to attitudinal barriers – to persuade businesses to widen their horizons beyond the UK – the Strategy sets out plans to inspire businesses through a new network of ‘Export Champions’, companies of all descriptions that provide living proof that there is global demand for British products.
They will share their success stories, offer peer-to-peer advice, and proudly demonstrate the benefits of exporting. To borrow from the ‘Exporting is GREAT’ campaign – ‘If they can, you can’.
Where companies don’t feel they have the knowledge, people or skills to begin selling overseas, the Department for International Trade has a range of signposting and guidance to help them find the right services, support and finance.
This might be through the award-winning great.gov.uk site, or from networks of international trade advisors, export finance managers and our overseas network of trade and finance specialists.
To win contracts abroad, businesses of course need to know where to look. Her Majesty’s Trade Commissioners have been appointed to cover nine international regions, leading the efforts of government’s overseas network to identify opportunities and linking UK businesses to them through a digital ‘find a buyer’ service.
The government will also better exploit its convening power, bringing together consortia of British businesses to present a single, cohesive ‘Team UK’ offer for procurement teams on major international projects.
And we will use the offer of UKEF export financing to encourage overseas buyers to source from the UK, and connect the UK supply chain with these international opportunities through procurement-led supplier fairs.
This is particularly important for smaller manufacturers, as it offers a ‘safe channel’ for them to access major international projects, secure in the knowledge that UK government backing is available.
The trade finance boost
Almost 20% of businesses report concerns about finance or getting paid as being their main barrier to exporting, while research shows that exporters that do have access to trade finance have export volumes as much as 60% higher.
To illustrate what this can mean in practice, I return to Kelvin Hughes, which won a contract to supply a navigation system to the Royal New Zealand Navy’s (RNZN) new Maritime Sustainment Capability Vessel (MSC) – an ice-capable tanker designed to replenish other ships at sea with fuel and water.
Kelvin Hughes found that it needed to access additional finance facilities to fulfil the contract, which its bank was not able to provide.
UKEF was able to help, providing trade finance support worth over £1m for the contract, helping Kelvin Hughes to secure the working capital it needed to deliver – while at the same time continuing to take on new business.
Unfortunately, 75% of SMEs report that they don’t know how to access trade finance. That’s why the Export Strategy puts UKEF at the heart of the government’s trade promotion offer, with an awareness campaign to target UK exporters most likely to benefit from up to £50bn worth of export finance and insurance support from UKEF.
We will also promote UKEF support in overseas markets to help UK companies and consortia win contracts, and look at expanding and enhancing the range of support on offer from UKEF.
This Export Strategy is only a starting point. The government plans to gather evidence and feedback, and use it as a platform to continuously develop our initiatives aimed at boosting exports. To underpin this, the Strategy also sets out five key principles for government support for exports.
First, we will be joined up across government, local and private sector partners, adopting a ‘no wrong door’ policy. You shouldn’t have to know how government works to get help from us, any more than you would expect your customers to know your structures to work with you.
The second principle is that services should be digital by design – reflecting what you’d expect if you needed to access a service from another business. And third, we will target interventions that deliver the greatest value for money.
Fourth, we will focus on doing what only government can to facilitate exporting, complementing rather than seeking to replicate what’s already on offer from the private sector.
Last – and most important – the strategy will continue to be led by business. You export, we don’t, so we in government need to listen to what you need from us. We are here to help you realise your global ambitions.
Louis Taylor is CEO of UK Export Finance (UKEF), the UK’s export credit agency.
Before joining UKEF, Louis held a range of senior roles at Standard Chartered Bank, including from 2013-15 as COO of Group Treasury, based in London.
Prior to that, he spent three years as the bank’s CEO for Vietnam, Cambodia and Laos, based in Ho Chi Minh City.