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The UK government wants to ‘trade their way out of the deficit’ and find ways of boosting UK economic growth in an area where the UK has traditionally been outperformed by its peers. Only one in five UK companies export compared to one in four of their German counterparts.
The government set the very ambitious target of increasing exports to £1 trillion by 2020 and boosting the number of exporters by 100,000, and yet, despite this focus and the many accompanying government initiatives, export growth has been slow. While the world economy may be heading into difficulty and with recession hitting countries like Brazil and Russia, there are other, long-standing reasons behind the UK’s ponderous export performance.
Common factors often cited are: a cultural reluctance to export, especially among smaller companies; a lack of ambition; an over-reliance on the domestic market, particularly because of the long years of growth preceding the financial crisis of 2008; producing the ‘wrong’ types of goods; a lack of infrastructure; access to finance; a lack of skills, especially language skills; and maintaining adequate levels of R&D investment.
However, there are export areas where the UK performs very well. The UK is the second biggest exporter of services in the world and enjoys a large services surplus of £15.4 billion with the EU alone. We can also boast of world-leading, advanced manufacturing companies in the aerospace and defence sectors.
Despite these successes, the needle on exports has not shifted enough in recent years. This report argues that the UK needs to think beyond the many small initiatives offered by UK Trade & Investment (UKTI) and consider some more far-reaching questions on what it wants from its export strategy and how best it can exploit the opportunities and advantages it does have. Continue...
- UK Risks Missing £1Trillion Exports Target, Warns Think Tank—Press Release [View]
- Britain Can’t Rewind the Clock on Trade, Politico, Emily Redding [View]
- UK Parliament Exports and Role of UKTI Inquiry, Written Evidence from Legatum Institute [View]
About the Economics of Prosperity
The Economics of Prosperity programme looks at how policy-makers can develop legal, economic and governance environments that deliver increased economic activity, generate jobs and lift their peoples out of poverty. Led by Shanker Singham, the programme produces papers, panels and seminars, including country studies that identify the constraints to economic growth and wealth creation.