Export post-Brexit and post Covid-19

Making the most of exports post-Brexit and post Covid-19

Dr Carmen Stoian, Senior Lecturer in International Business

Small and medium enterprises (SMEs) are key employers and contributors to the UK’s economic growth and through exporting they generate additional jobs, higher revenues and innovation. However, Brexit and Covid-19 have created additional barriers to exporting and placed new financial and human resources constraints on SMEs, raising the question of how best to support those SMEs that are still willing to export.

To find out how SMEs managers perceive the impact of Brexit and Covid-19 on their firms’ exports and how to improve the support available for exporters, Kent County Council commissioned a study as part of its EU-Funded SIE (SME Internationalisation Exchange) Project and the Kent International Business programme. The study was led by a team of experts from the University of Kent and University of East Anglia, Dr Carmen Stoian, Dr Zita Stone and Professor Fragkiskos Filippaios.

Using a representative sample for the Kent SME population and an anonymous survey with 316 managers, our findings suggest that the impact of Brexit and Covid-19 on exporting SMEs has been mixed. 50% of firms have decreased exports since Brexit, as they have faced additional administrative barriers and costs associated with tariffs. Moreover, 8% of firms have stopped exporting since Brexit, as these also lacked access to specialised workforce.

In contrast, 11 % of firms have used exporting as a strategy to build resilience and increase growth and have started to export since Covid-19. This variety of firm responses to Brexit and Covid-19 suggests that SMEs require tailored support to their specific needs and stage in the exporting process (i.e. whether they are currently exporting, are considering exporting or have stopped exporting and are considering starting again). With support provided by the Department for International Trade and Kent Invicta Chamber of Commerce as well as several bespoke programmes which all make up the wider ‘Kent International Business’ offering led by Kent Country Council, key stakeholders in the county are now looking at ways to develop these support initiatives in light of the recent findings.

‘To export’ – that is the answer. Our study suggests that exporting brings significant benefits to SMEs such as access to distributors, additional earnings and building resilience.

How to make the best of exporting? Markets such as the European Union, the US, Canada, New Zealand, India, and China are predicted to remain the most important markets for Kent SMEs, due to existing relationships, geographical closeness (the EU), cultural affinity (the US, Canada and New Zealand), or high economic growth prospects (India and China). Attending digital fairs and other networks may be a cost-effective way for SMEs to find distributors in other markets and enhance exporting. To make the best of exporting, SME managers may also need to improve their digital skills and embrace digitalisation which appears to be increasingly important for accessing foreign markets and business growth.