SMEs and a credible export strategy are the keys to boosting the UK economy, according to a joint report from the CBI and Ernst & Young.
High growth potential exports include communication services, electrical goods, optical and high-tech goods and financial services. These have the potential to boost the UK economy by £20bn by 2020, the report has claimed.
The report, entitled Winning overseas: boosting business export performance and published today, urges the government to set out a clear exports strategy with ambitious, achievable performance targets, increasing net exports to 2.5 per cent by 2016, accounting for 36 per cent of GDP.
John Cridland, director general of the CBI, said: “The UK has a proud history as a great trading nation, but in recent years our performance has been lacklustre. Exports success will be one of the key drivers of growth, but for too long we have been over-dependent on advanced economies for our trade.
“The continued crisis in the Eurozone underlines just how important it is for the UK to diversify its export efforts to high-growth countries. Given that we’re already playing catch up with many of our competitors, we must act now or never to target high-growth economies, leapfrog the competition and deliver our growth potential.
“We need to capitalise on the booming success of the BRIC countries and look beyond the curve to future high-growth markets such as Indonesia, Mexico and Turkey.”
Up and coming countries include Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, South Korea, Turkey and Vietnam, the report claims.
Steve Varley, UK and Ireland managing partner at Ernst & Young, said: “Our inability to break into and succeed in high-growth markets is due to a historic mismatch between the goods and services we currently sell and those demanded by high-growth economies.
“Demand in the last decade from the BRICs has been for manufacturing goods, including machinery, tools and equipment, but in many cases UK companies haven’t been strongly positioned enough to compete globally to win this business. With the changing demographics in high growth markets, including the rise in the middle classes and consumer spending levels, now is the time for the UK to seize the opportunity.”
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