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THE KNOWLEDGE 29
EXPORTING
– A POSITIVE
OPTION FOR
GROWTH IN
LEAN TIMES
The credit crunch, surging energy prices,
geopolitical anxieties…every day seems to
bring news of worsening business conditions,
and no prospect of quick fixes.
Yet sometimes the way out of a downturn is not to batten down the Western technology, services and expertise remains – and this may
hatches but to look aggressively for new avenues, and exporting might well apply to other high-growth markets. Brave company managers,
be one worth looking at.
veterans of various economic cycles – oil shocks in the 70s, recession
in the 80s, downturn in the 90s – will view the current situation as not just
It can be a daunting prospect at the best of times and current
a new challenge but another opportunity to streamline, increase
economic pressures and uncertainties could be enough to deter
competitiveness and efficiency, and seek out new markets. Those that
even experienced traders.
do will be best placed to capitalise and expand when economic
growth returns.”
Yet there are compelling reasons why British companies should not be
dissuaded from internationalising their business – and it is not just about
Research published last year by the University of Glasgow (Firm Level
taking the long view, trusting things will get better: there are
Empirical Study of the Contribution of Exporting to UK Productivity
opportunities out there now for successful trading.
Growth by Richard Harris and Q Cher Li, commissioned by UK Trade &
Investment) shows that new exporters boost business productivity by up
Take China, basking in the glow of the Olympics and worldwide
to a third in the first year of exporting, enhancing their stability. It
attention. Despite global financial problems, the Chinese economy is
confirms that, in general, exporting companies are more productive
still growing. Manufacturers are feeling the pinch, but the country
than non-exporters and more likely to stay in business.
remains bullish about its prospects.
The report was the first to consider the contribution of exporting (goods
Innovative Chatham-based firm Optimum Fitness, for example, has
and services) to aggregate productivity. Findings include:
found a way to tap into the Chinese market, taking advantage of the
• firms that stop exporting experience a drop in productivity of around
Olympic feel-good factor.
7-8%;
The company’s personalised fitness software – particularly popular with
• firms covered were 11.4% more likely to survive if they exported.
the young - makes exercise more involving and entertaining. The
system is being installed under franchise in gyms across China, with
The report suggests, significantly, that its findings are likely to reflect
Optimum providing software and hardware support for franchisees.
improvements made by companies preparing for the challenge of
Accessed by thumb/fingerprint recognition, software allows people
exporting – and it is a challenge, every market presenting its own
practical, legal, logistical and cultural hurdles. In the prevailing
visiting their local gym to access their own exercise records, advice on
conditions, good market information and intelligence are more
equipment to use, and even interactive gaming to make repetitive
important than ever.
exercise more enjoyable.
Fortunately, there are plentiful sources of support and advice –
“Those of us who have worked through difficult times see it as critical to
chambers of commerce, professional organisations like the Institute of
prepare for the upturn while managing the downturn!” Chris Lowsley,
Export, and government bodies such as UKTI and HM Revenue &
China Business Adviser with UK Trade & Investment (UKTI) in the South
Customs.
East, says. “With domestic orders declining, there is even more reason
to look further afield for new business. It is easy to assume the whole
So, be prepared, be smart and don’t be put off – the opportunities are
world is suffering as we are. But some economic cycles are different to
out there and the wheel will turn again.
ours. In the case of China, there is tremendous domestic momentum
in infrastructure and an afterglow of Olympic satisfaction. Demand for Source: UK Trade and Investment www.ukti.gov.uk
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