It was encouraging to hear at a recent roundtable discussion that mid-market companies are hugely optimistic for future growth after surviving one of the worst recessions in history.
I was privileged to be part of the event organised by GE Capital and Reform to discuss the contribution of the mid-market businesses to the economy; the reasons behind their success and the barriers to their growth.
Attendees at the discussion included Lord Younger, policymakers and representatives from a significant number of ‘growth champion’ mid-market companies.
Key to our discussions were the barriers faced by mid-market companies seeking to trade internationally, and how businesses already successfully exporting to the same market could provide support to others through a mentoring scheme.
Other issues which came under the spotlight were concerns about being unsuccessful when exporting for the first time, with participants summarising the challenge as a “leap of faith”.
Delegates remarked on how employees in high-growth companies want to be successful and are nervous of embarking on an export push if they are not confident of its success.
As chair of the IOE which champions embedding professionalism in international trade, I was particularly interested to hear participants’ views on the skills’ gap. Participants noted that with a recent resurgence of UK manufacturing, we need fast-track schemes to replace those older workers leaving the industry. Entrepreneur internships and greater promotion of jobs in the mid-market sector to talented graduates were among a plethora of skills-related issues discussed.
Common difficulties when it came to exporting include the need for long-cycle financing to ensure sufficient cash-flow, managing investment, together with research and development processes. It was thought that while problems around export finance were cited anecdotally, more frequently it was the need for increased management time which presented the biggest challenge. The complex nature of UK service sectors may also pose more of a challenge to export to emerging markets than manufactured goods.
Although government agencies such as UK Trade and Investment (UKTI) and UK Export Finance (UKEF) can provide support, attendees felt that many mid-market firms have little understanding of the support both organisations can provide. It was therefore suggested, that their services should therefore be consolidated under one banner and advertised with a sustained marketing and communications plan. It was also felt that UKTI should provide advisers or “interim export directors” on secondment to assist those looking to enter new markets.
A welcome suggestion was that firms looking to export for the first time would benefit from being mentored by businesses who had exported to the same market, even if they had encountered problems. This was considered one of the best ways of overcoming associated fears and challenges. To assist with this, UKTI or a similar body should set up a network of business advisers to help companies looking to export, and develop a series of case studies from already successfully-exporting businesses.
Business to business communications was also cited as important, not only focusing on the advice of lawyers or management consultants, but also the exporting experiences of other mid-market businesses.
In conclusion, companies seeking to export need to be supported not just by UKTI and UKEF, but also through strong business to business communication.
Are there any other steps that could be taken to encourage mid-market companies to trade overseas? What has your experience been?
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