BUSINESS
IS
GOOD
FOR
BRITAIN
Exporting is good for Britain but
MARKET BARRIERS STIFLE OPPORTUNITIES
Chambers of Commerce are recognised across the UK and around the world as leading supporters of
international trade. Chambers deliver trade support and advice, as well as a range of specialist services, to
businesses of all sizes in Britain’s exporting community.
Given the need to rebalance the UK economy towards exports to secure recovery and long-term prosperity,
the British Chambers of Commerce (BCC) commissioned a major international trade business survey in Q1
2012 – to which 8,073 businesses responded. The survey clearly demonstrates that Exporting is Good for
Britain.
Since the BCC last surveyed Chamber members in 2011, the share of responding businesses actively
exporting goods and services from the UK rose from just over a fifth (22%) to nearly a third (32%).
Yet the survey also shows that a number of challenges, barriers, and obstacles remain. The BCC and the
Chamber Network will be working hard over the coming years to overcome these obstacles, working
closely with companies and with Government, and will help to unlock the potential of Britain’s existing and
future exporters.
It is often claimed that growth of the UK’s export sector is held back by a focus on ‘traditional’ or ‘mature’
markets at the expense of larger and faster-growing ones - especially in Asia. This survey confirms that
the EU remains the most popular destination for UK exports and is also seen by many businesses as
providing the greatest prospect for growth in the short term. Just under half of Chamber exporters see
the large and faster-growing ‘BRIC’ economies of Brazil, Russia, India and China as the best prospective
markets for increasing business over the next twelve months.
But there is a size-and-sector divide: large exporters that are part of an international group or supply
chain and operating in the manufacturing and transport sectors are the most likely to perceive the BRICs
as the best platform for growth. Micro and small businesses are much less likely to have penetrated these
fast-growing markets, or see them as a route to future growth. And medium-sized businesses – often
seen as the foundation of Germany’s export success – are less optimistic than large ones about future
prospects in markets such as the BRICs, Asia and the Middle East.
Exporters perceive ‘external’ barriers to market entry and to increasing sales volumes to exist across all
export destinations. Regulatory differences are the most commonly cited but language and cultural barriers
also feature prominently. In some markets, like Africa and the Middle East, political risk is the major concern.
These influence decisions about when and where to export. Worryingly, exporters to the fast-growing BRIC
markets are the most likely to encounter barriers that hold back sales. To support UK business expansion
in these markets, the Government must press for greater progress on free trade agreements via the EU;
and ensure publicly-funded support for exporters is targeted and not piecemeal. Closer to home, the Single
Market must be deepened so UK businesses can more comprehensively and seriously treat the EU as its
home turf.
SKILLS
SOCIAL CONNECTIONS
RED TAPE
MARKET OPPORTUNITIES
MARKET BARRIERS
TRANSPORT CONNECTIONS
BUSINESS COSTS
ACCESS TO FINANCE
BUSINESS PLANNING
PRODUCT MARKETS
MICRO AND SMALL EXPORTERS LAG FAR BEHIND
LARGE COMPANIES IN ACCESSING GROWTH MARKETS
Large businesses are the most active in fast-growing, non-EU markets

88 per cent of Chamber exporters currently export to the EU compared to 47 per cent
for the BRICs and 55 per cent for other Asian and Middle-Eastern markets (including
Thailand and Saudi Arabia)


Nearly three-quarters of large exporters trade with BRIC countries, but only a third of
micros are engaged in these large and fast-growing markets
Large firms are also more active in trading with the Americas, CIVETs (Columbia, Indonesia,
Vietnam, Egypt and Turkey) and countries in the Pacific
To where do you currently export?
100%
80%
60%
40%
20%
EU Member
countries
Other OECD Countries in BRIC countries
member
Asia including
countries the Middle East
Countries
in Africa
EEA countries Countries in
outside the EU the Americas
Other
countries
in Europe
(non-EEA
or non-EU
members)
CIVET
countries
Large (250+) Base: 229
Medium (50-249) Base: 524
Small (10-49) Base: 903
Micro (0-9) Base: 816
26%
3%
Countries in
Oceania
Large businesses perceive greater opportunities for growth in the
fastest-growing economies of Asia and South America

Around two-thirds of large exporters see the BRIC economies as a top platform for export
growth in the next 12 months, compared to around half of mediums and a third of micros

For micro, small and medium-sized businesses, EU markets are seen to provide the
greatest opportunities for export growth in the near term – yet BRICs are now considered
nearly as important as Europe by medium–sized companies
Which of these countries do you believe will provide your business with the greatest opportunities for growth in the next
12 months?
80%
70%
60%
50%
40%
30%
20%
10%
EU Member
countries
BRIC countries
Large (250+) Base: 228
Medium (50-249) Base: 524
Small (10-49) Base: 902
Micro (0-9) Base: 812
Countries in
Asia including
the Middle East
Other OECD
member
countries
Countries
in Africa
CIVET
countries
PERCEIVED POTENTIAL OF NON-EU MARKETS UNEVEN
ACROSS FIRM SIZE AND SECTOR
Businesses that belong to an international group or supply chain
are the most likely to see opportunities for growth in the fastestgrowing, emerging economies

Exporters that are part of an international business group or supply chain are around
50 per cent more likely than those that are not to see the fast-growing BRIC markets as
providing the greatest opportunites for growth
Which of these countries do you believe will provide your business with the greatest opportunities for growth in the
next 12 months?
ALL
Part of
international
business/
group/chain
Part of an
international
supply chain
Agent or
distributor
Importer
None of these
EU Member countries
53%
50%
49%
49%
58%
54%
BRIC countries
44%
54%
54%
47%
45%
37%
Countries in Asia including the Middle
East
37%
40%
41%
42%
37%
35%
Other OECD member countries
31%
30%
34%
26%
33%
32%
Countries in the Americas
20%
22%
22%
18%
17%
21%
Countries in Africa
20%
23%
22%
24%
19%
18%
CIVET countries
12%
15%
17%
15%
12%
10%
EEA countries outside the EU
11%
15%
17%
16%
17%
9%
Other countries in Europe (non-EEA
or non-EU members)
11%
11%
14%
15%
16%
10%
Countries in Oceania
4%
5%
5%
5%
4%
4%
None of these
3%
2%
4%
4%
4%
4%
Base:
2542
804
375
332
401
1146
The transport, manufacturing and education services sectors are
the most enthusiastic about opportunities for growth in developing
economies


Over half of the education services exporters surveyed see countries in Asia and the Middle
East as a strong platform for growth over the next 12 months
Over half of manufacturers and transport service exporters saw the BRIC economies as
offering strong growth prospects over the next 12 months
Wholesale
Retail, hire and repair
Professional and
business services
Transport and related
activities
Media and creative
services
Manufacturing
IT and
telecommunications
services
Health and social
care services
Education
Construction
Catering and
accommodation
Arts, sports and
recreation
Agriculture, forestry,
fishing, mining,
energy, utilities
ALL
Which of these countries do you believe will provide your business with the greatest opportunities for growth in the
next 12 months?
EU Member
countries
53%
36%
53%
74%
37%
43%
44%
51%
55%
63%
48%
56%
58%
60%
BRIC countries
44%
43%
34%
44%
39%
46%
26%
24%
51%
28%
55%
39%
25%
39%
Countries in
Asia including
the Middle East
37%
46%
31%
26%
42%
51%
41%
30%
38%
20%
35%
34%
24%
38%
25%
29%
Other OECD
member
countries
31%
28%
38%
40%
24%
20%
26%
41%
34%
44%
29%
31%
Countries in the
Americas
20%
26%
22%
16%
15%
16%
11%
27%
22%
22%
24%
19%
13%
11%
Countries
Africa
20%
32%
13%
9%
24%
27%
19%
19%
18%
9%
24%
19%
15%
23%
CIVET countries
12%
17%
-
5%
7%
16%
7%
11%
14%
4%
18%
10%
5%
8%
Base
2542
109
32
43
62
117
27
130
1019
81
144
368
79
131
in
EXPORT SALES HINDERED BY BARRIERS TO GROWTH
IN THE FASTEST-GROWING MARKETS
Exporters to BRIC countries are the most likely to report that they
experience market barriers that constrain sales

63 per cent of businesses that export to the fast-growing BRIC economies claim to
experience at least one barrier that contrains sales
Proportion experiencing at least one stated market barrier (regulatory environment and differences in standards, tariffs,
enforcement of legal rights and protections - including contracts and intellectual property rights - language and/or cultural
differences, political risk, overseas public-sector procurement rule):
63%
BRIC countries
56%
Countries in Africa
53%
Countries in Asia including the Middle East
48%
CIVET countries
38%
Countries in the Americas
30%
EU Member countries
28%
Other OECD member countries
26%
Other Europe (non-EEA/EU members)
EEA countries (non-EU members)
24%
Countries in Oceania
23%
Base: Exporters 435 - 2,099
Across most markets, the most commonly-cited barrier to increasing
sales is the regulatory environment and differences in standards


The regulatory environment and tariffs are the most common barriers for exporters in
increasing their sales in BRIC countries, but political risk is seen as a far greater barrier in
in Africa and the Middle East
Despite the Single Market, exporters still report significant regulatory and cultural concerns
when operating in Europe
Which, if any, of the following barriers affect your ability to increase sales in the markets you currently export to?
40%
Overseas public sector procurement rules
35%
Political risk
Language and/or cultural differences
Enforcement of legal rights and protections
30%
Tariffs
Regulatory environment and differences in standards
25%
Base: 435 - 2099
20%
15%
10%
5%
BRIC countries
Countries
in Africa
Countries
in Asia
including
the
Middle East
CIVET countries
Countries in
the Americas
EU Member
countries
Other OECD
member
countries
Other countries
in Europe
(non-EEA/EU
members)
EEA countries
(non-EU
members)
Countries in
Oceania
MARKET BARRIERS HOLD BACK EXPORTERS FROM
ENTERING NEW MARKETS
Market barriers influence the decision to enter new markets across
all potential export destinations

Around half of exporters indicate that at least one of the listed barriers influence their
decision on whether to export to / do business in Africa or BRIC countries for the first
time
Barriers to entering new market (regulatory environment and differences in standards, tariffs, enforcement of legal rights and
protections - including contracts and intellectual property rights - language and/or cultural differences, political risk, overseas
public sector procurement rules)
Proportion indicating reservations of entering new markets
Countries in Africa
48%
47%
BRIC countries
CIVET countries
43%
Countries in Asia including the Middle East
42%
Countries in the Americas
35%
30%
EU Member countries
EEA countries (non-EU members)
28%
Other OECD member countries
28%
Countries in Oceania
Other countries in Europe (non-EEA/EU members)
27%
26%
Base: 254 - 1,686
Barriers to first-time entry are seen by exporters to be lower in
‘traditional’ destinations for exports


Political risk is seen as the greatest barrier to market entry if exporters were to consider
trading with countries in Africa (cited by 31 per cent of exporters)

Regulatory and legal barriers are seen to be far lower in Europe – as would be expected –
but still indicate some concerns on the part of would-be exporters, suggesting that more
needs to be done to reinforce the Single Market
Differences in language and culture are seen as the most influential factor in the decision
to enter BRIC markets (cited by 20 per cent of exporters)
Which, if any, of the following barriers affect your decision on whether to enter a new market for the first time?
35%
Overseas public sector procurement rules
Tariffs
30%
Enforcement of legal rights and protections
Regulatory environment and differences in standards
Language and/or cultural differences
25%
Political risk
Base: 254 - 1,686
20%
15%
10%
5%
Countries
in Africa
BRIC
countries
CIVET
countries
Countries
in Asia
including
the Middle East
Countries
in the
Americas
EU Member
EEA countries
countries (non-EU members)
Other OECD
member
countries
Countries
in Oceania
Other countries
in Europe
(non-EEA/
EU members)
BCC RECOMMENDATIONS
Press for full implementation of the EU’s Single Market Act so that
UK businesses benefit from a deeper and wider single European
market


While regulatory barriers are seen as lower than for other parts of the world, British business
must be able to treat Europe as its home turf and reap the benefits of a Single European
Market of 500 million consumers. The UK and other European governments must speed up
the implementation of the priority measures launched in 2011 by the European Commission
(the Single Market Act). These include measures to boost e-commerce by making it easier
for businesses to transact securely online; to make it cheaper for innovative companies to
obtain an EU patent; and to make it easier for SMEs for bid for public contracts across the
EU.
The BCC has developed an eight-point plan to re-invigorate the Single Market and make
it work better for businesses looking to export, including the creation of a digital single
market; making a reality of the internal market for energy; and deepening the single
market in services. (See http://www.britishchambers.org.uk/policy-maker/policy-reportsand-publications/8-ways-to-make-the-single-market-work.html)
BCC RECOMMENDATIONS
Open up new markets through free trade agreements

There is a clear relationship between the volume of UK exports to overseas markets,
and the formal legal agreements that underpin trade. SMEs in particular, which lack
the resources of larger companies, would benefit from breaking down the tariffs and
bureaucracy of markets that are not currently covered by free trade agreements with the
EU. The Government’s European efforts should continue to focus on concluding trade
negotiations, including bilateral free trade agreements with India and Japan and further
liberalising trade in services with the United States; in particular the UK and EU should
use the G8 meeting in May to launch negotiations with the US on mutual recognition in
particular.
Re-establish foreign languages as core subjects within the UK
national curriculum and in workplace training


Differences in language and culture are seen as important barriers to entering fastgrowing markets like the BRICs, Asia and the Middle East. There needs to be a fundamental
reappraisal of the importance of language learning to Britain’s future competitive position
and business success. The National Curriculum must be revised so that studying a foreign
language is compulsory until AS level. It is important to ensure that the next generation of
business owners are ‘born global’ with language skills.
Businesses must also invest in language skills for their existing staff. Additional financial
incentives, such as tax credits for small and medium-sized businesses that make a
significant investment in language training, could support both take-up and ensuring a
tailored business language offer.
Better target support for exporters to address the size and sector
divides in accessing the fastest-growing markets

Businesses that export to the fastest-growing markets are the most likely to encounter barriers
that hold back sales. This partly explains why there is a size divide in these markets: smaller
businesses have fewer resources to overcome these obstacles. But mid-sized businesses, often
seen as the foundation of Germany’s export success, are also less optimistic than large ones
about future prospects in the BRICs and other markets in Asia and the Middle East. While some
sectors like transport, manufacturing and education services see potential for growth in the
fastest-growing economies, others are more reticent about doing business there.

As it seeks to expand its reach from 25,000 to 50,000 SMEs over the coming months, UK Trade
& Investment (UKTI) and its partners, including Chambers, must work to address the reticence
of some sectors and size groups to consider trading in new markets.

Additionally, Chambers of Commerce as a leading source of private-sector trade support, must
help local companies to build up intercultural skills and the confidence to trade in new and
unfamiliar markets.
The BCC is the national body for an influential network of 52 Accredited Chambers across the
UK. Representing 100,000 businesses, who together employ more than 5 million employees,
the BCC is the Ultimate Business Network. No other business organisation has the geographic
spread or multi-size, multi-sector membership that characterises the Chamber Network. Every
Chamber sits at the heart of its local business community, providing representation, services,
information and guidance to member businesses and the wider local business community.
FURTHER INFORMATION
MIKE SPICER Senior Policy Adviser
British Chambers of Commerce
65 Petty France, London, SW1H 9EU T 020 7654 5800 E [email protected]
Other factsheets in the series are available at www.britishchambers.org.uk