SMEs miss export trick

GE Capital research finds IT and comms firms are failing to take advantage of the weak pound

Sterling work: The weakness of the pound could offer SMEs lucrative export opportunities, according to GE Capital

UK IT firms are losing out by failing to exploit the favou­r­able export environment, according to a recent study.

Not one of the IT and telecoms firms that took part in GE Capital’s survey of 500 UK SMEs expressed an interest in overseas expansion or ex­po­rts, despite the weak pound.

Eight per cent of SMEs see overseas expansion as a top business priority for the year, and a further eight per cent said they expect growth to come from international sales over the next three years. This is less than the 12 per cent considering overseas expansion in 2008.

This is in stark contrast to the government belief that an upturn will largely be export driven, given that SMEs account for more than half of domestic GDP.

Marcus Clavin, director at GE Capital UK, said: “Smaller IT firms often provide or service larger-named equipment and have a number of issues against them, such as licensing geography.

“For SMEs, there is also the barrier of culture and reaching clients to resolve issues. SMEs do not always have the resources that their larger counterparts have and making an investment into the unknown can be expensive.”

But Clavin said the opportunity is there.

“Sterling is 15 to 20 per cent down on the dollar and at a low against the euro, putting UK firms in a strong position. UK SMEs should seek ad­vi­ce from bodies such as UK Trade and Invest­ment (UKTI) to help them expand.”

A UKTI representative said smaller firms should exploit the situation. “SMEs are miss­ing out on huge opportunities by not considering export markets for their products and services. While expor­ting is not easy, it is profitable for those that take the plunge.

“UKTI can help firms work out if they are ready to export and, crucially, make the all-important in­tro­du­c­tions in target markets.”

Dan May, director of Ram­sac, said there might be a barrier for small resellers look­ing to export product, but services are another matter.

“We are doing an increasing amount of overseas consultancy in Europe and there is definitely growth there for us. But I think that growth would happen for us whether there is a weakened pound or not,” he said.