Internationalism has taken something of a hammering over the past 18 months, but constructive global citizenship should always be at its core. An internationalist foreign policy for developed nations would use their economic and technological wealth to promote a better and more prosperous world for everyone.
Whatever social caveats might have been mooted in global political discourse in recent times should not detract from the overarching benefits that a more connected world can offer to businesses. Here at Western Business Union Solutions, we operate with the ethos of opportunity. We are the facilitators; we want to build bridges, not walls.
Money, whatever spin you put on it, is ultimately what makes the world go round. Ensuring the fluidity of cash flow, therefore, should be a priority for any government or business. Cash flow was cited as the number-one concern and threat to growth facing UK companies in 2017. Currency volatility, meanwhile, is another worry, ahead of credit availability, regulation and even competitors. Late payment and debt recovery are also anxieties, and the time spent on payment processes across the UK’s micro, SME and lower corporate institutions ranges between 12 and 50 hours a week. Streamlining money matters, then, is surely crucial to boosting productivity.
Against the backdrop of Brexit, WUBS recognises the pressing need for the UK to maintain its role as a world leader, lest it be forgotten as a major player on the global economic scene. Almost half of all UK businesses expect growth in their international activity over the next six to 12 months, and so, outside of hope for a favourable set of terms post-Article 50, WUBS is committed to offering support with the necessary resources from both the private and the public sector. This will include intellectual/human capital, and financial, technological and information resources that SMEs especially will need to navigate these turbulent times.
Alongside a more nuanced approach to internationalism generally, the need for a deeper understanding of technology’s impact on businesses’ bottom line is paramount. There has never been a more important time to embrace and adopt technology and ensure UK firms are not standing on the sidelines as their revenues are reduced. Technological obsolescence, that is to say competition brought about by digitisation or innovation, poses a significant risk to lower corporate organisations in particular, with 25.5 per cent of their revenue threatened by competitors advancing ahead of them.
WUBS asks whether businesses are being taught to use technology effectively enough. Websites are admittedly commonplace nowadays, but how many of those cater for e-commerce? There is perhaps a potential role for government here in introducing set standards. In Germany, for example, it is compulsory for businesses to join their local chamber of commerce.
The full scale of the economic side effects of Brexit is yet to be confirmed, and it is for that reason that the UK must be prepared for either a hard or soft eventuality, a distinction plausibly defined by the country’s access or lack of access to the single market. In either case, the issue of exporting is suddenly thrown into sharper focus.
As the British pound moves in favour of exporters, a larger percentage of overall UK business is being derived from exports, with over a quarter (27.6 per cent) of current business revenue coming from these, a hike of 18.5 per cent on two years previously. Strong forward dated guidance will add to this share: 53.3 per cent of UK businesses expect to increase their proportion of export earnings relative to their overall revenue by roughly 8.3 per cent.
Unsurprisingly, exports make up a larger slice of the pie for the bigger UK corporations, with companies turning over between £20m and £100m per year indicating that a substantial 37.5 per cent of their revenue is owed to trading overseas. Though this figure has stayed relatively static for most larger corporations over the past year, 53.3 per cent anticipate the export proportion of their business to increase over the next year. As exports rise in importance and account for bigger proportions of UK businesses’ revenue, the roles of government policy and financial providers must reflect that, with frameworks for ongoing support and education.
Over 80 per cent of UK businesses have highlighted their renewed focus on international vendors and supply chains in the light of the country’s decision to leave the European Union, with a further 12.5 per cent saying that there would be considerable focus placed on their vendors going forward, emphasising the shift towards foreign partnerships and alliances over having a direct presence abroad. Given that the crux of UK business is service-led these days, rather than rooted in raw materials, striking the right partnerships, economically and technologically, is tantamount to a self-sustaining UK.
While the Brexit vote has understandably dominated the rhetoric surrounding the UK’s economic future, it would be disingenuous to suggest that this can only be discussed within the context of the EU. Indeed, the opportunistic largesse of the global economy was one of the key arguments of the Leave campaign. Apart from the historically developed countries outside the EU, China, India and Brazil represent three other potential trading corridors; and fostering fluid and positive relationships with these countries will no doubt be central to a post-Brexit economy.
In order to build those positive relationships, WUBS, at the forefront of any such possibility, urges the government and industry alike to nurture and develop their SMEs. It is they that form the spine of the economy, as they number the most. If empowered properly, they will achieve the growth that the UK requires.
Lord Price, Trade Policy Minister
“Trade is at the heart of government as we look to champion a liberal trade agenda that boosts our prosperity and helps UK businesses take advantage of new markets around the world. “Government is not acting in isolation, and we are speaking regularly to businesses large and small to ensure we give them the support they need to seize new opportunities – support like the new Exporting is GREAT hub, which gives businesses access to advice, financial and regulatory support and live contract opportunities.”
EDGE platform: business.westernunion.co.uk/ wuedge
Western Union Business Solutions is an official partner of Exporting is GREAT.