To mark the start of E-Commerce Week and ahead of attending the government’s SME Connect event today (18 March), IOE&IT director general Marco Forgione writes about the importance of backing the UK’s small businesses to make the most of export opportunities on e-commerce platforms.
If you haven’t signed up to the two free webinars IOE&IT is running as part of E-Commerce Week, you can register using the below links:
- Tuesday 19 March, 11am: ‘How businesses can use e-commerce to grow internationally’
- Wednesday 20 March, 11am: ‘What is the social value of e-commerce trade?’
Every year is ‘SME Year’
In this year’s Spring Budget Red Book, 2024 was referred to as being ‘the year of the SME’. I would go one step further and suggest that every year should be ‘the year of the SME’. Over 99% of UK businesses are estimated to be SMEs. They are, quite literally, the lifeblood of the UK economy.
It might be of surprise to many, therefore, that there are still many barriers to SMEs succeeding in growing their businesses and reaping the benefits of cross-border trade. For example, only 9% of UK SMEs are estimated to export. We have to ask ourselves – why is this and what can we do to shift the dial? This is one of the aims of the Department for Business and Trade Export Strategy and the event I am attending today – SME Connect. This event has a particular focus on discussing how we remove barriers for UK SMEs in order to help them to engage more meaningfully in international trade.
Since our foundation in 1935, the Institute of Export & International Trade (IOE&IT) has focused on helping MSMEs (Micro, Small and Medium Enterprises) trade cross-border. We know that businesses which trade internationally are more resilient, more sustainable, are more innovative, employ more people, and are more profitable. Given this list of positives, MSMEs need to be engaged in international trade.
In fact, it is essential that we normalise conducting international trade as being just a standard part of doing business. Only by doing this can we tackle key social and economic challenges such as low productivity and economic exclusion, as well as building resilient supply chains which are essential in facing up to the current geopolitical forces and the ongoing weaponisation of international trade.
One key way in which MSMEs can get started on their exporting journey is through e-commerce.
Putting the Ease in E-Commerce
This week is E-Commerce Week, designed and spearheaded by the E-Commerce Trade Commission. The UK’s first-of-a-kind industry-led E-Commerce Trade Commission was convened by IOE&IT in June 2023 with the aim of encouraging small businesses to explore the opportunities and benefits of e-commerce exporting. It is also seeking to identify barriers facing SMEs who want to grow with e-commerce and then work with policymakers to break down these barriers systematically.
The Commission launched by Secretary of State Kemi Badenoch and Exports Minister Lord Offord, in June 2023, was a recommendation in the Social Market Foundation 'Just a Click Away' report in November 2022, commissioned by Amazon. The report found that 70,000 UK SMEs could be exporting via e-commerce but currently aren’t. If these 70,000 businesses were supported to engaged in e-commerce exporting, this is estimated to add £9.3bn to the UK economy. Growth is quite the political buzzword of the last couple of years and surely nothing demonstrates the opportunities for growth more positively than this statistic.
The Commission is alive to the benefits which could be accrued for SMEs who are supported into e-commerce exporting. E-commerce Week is therefore aimed at inspiring businesses to dip their toes into e-commerce and to point them to the various sources of support available in order to facilitate that.
The commission partners include IOE&IT, the Association of International Courier & Express Services (AICES), Alibaba Group, Amazon, eBay UK, the Federation of Small Businesses (FSB), Google, the Institute of Chartered Accountants in England and Wales (ICAEW) and Shopify. The Department for Business and Trade also sits on the Commission in order to aid a smooth flow of feedback and ideas directly to policymakers.
Commission partners are undertaking various activities throughout the week with IOE&IT hosting two webinars. The first is ‘How businesses can use e-commerce to grow internationally’, which will provide a panel session offering insight into a range of issues, including how businesses can get started in e-commerce exporting, the trade and customs requirements to be aware of and the support available from both industry and government. The webinar is being held on 19 March, and you can register for it here.
We’ll be following this up on 20 March with another webinar considering ‘What is the social value of e-commerce trade?’. Amid the rise of e-commerce, experts will discuss the risks arising from digital business environments, the importance of standards to protect consumers and how MSMEs can grow online trade responsibly. You can register here.
Education, Education, Education
As we’ve explored briefly above, education and skills are key for MSME success in all forms of exporting.
In a recent poll of IOE&IT members, a majority (60%) of respondents stated that greater expertise in international trade is essential for them to increase exports. Two-fifths (40%) said a need for employees skilled in customs procedures was important, while a fifth (20%) stated that export training and support would enable their business to export more.
Implementing funding streams for further educational programmes such as regional training clusters (in partnership with training organisations) offers a great opportunity to address these skills shortages in key regions. This would allow MSMEs from underrepresented nations and regions to access tailored education for their specific needs.
The foundational mission of the IOE&IT is to support its members and partners with international trade education and upskilling opportunities. To that end, we were pleased to recently launch a Level 3 specialist apprenticeship in International Freight Forwarding, which is delivered by IOEx Ltd, and are excited to be further expanding our apprenticeship offers going forward.
What can you do?
You might be reading this and wondering what you can do to support MSMEs to grow, so here are a few prompts to help:
- If you are a consumer, what small businesses can you support through your purchasing habits?
- If you are a policymaker, what can you be doing in your remit to advance the case of MSME growth and break down barriers in your specific field?
- If you are an MSME, what areas are you currently weak in and where do you need to upskill? Who can you reach out to for advice on where to source it?
IOE&IT stands ready to support MSMEs in their journey to growth and we want every year to be ‘the year of MSMEs’.
This article was originally posted by Forgione as a LinkedIn Pulse post.
