42 under 42: Hot air leaves export strategy grounded
Gavin Wheeldon, chief executive of Applied Language Solutions, shares his views on the state of support for UK exports.
Last year will be remembered by many business leaders for the overall feeling of frustration and paralysis. No growth, continuing austerity and chronic indecision from political leaders has definitely sapped our resolve, and I know many are looking forward to drawing a line under a hard slog of a year.
My overall frustration is with the lack of progress in building a platform from which UK businesses can improve the way they reach developing markets, beyond the US and the eurozone.
For the past 12 months, leaders from the business secretary Vince Cable to Sir Terry Leahy have used keynote speeches and national conferences to clearly identify what the UK needs to do to increase its productivity and competitiveness in international markets.
However, a lot of talk has not led to the formulation of a watertight long-term strategy, or even viable, short-term solutions. There is a real sense that once the camera crews have packed up, and the politicians have returned from trips to China and India, businesses are left to it, overwhelmed by information, but bereft of support.
UK businesses are being asked to take on a heavy burden in restarting the UK engine, but in my opinion there is little leadership or direction. My biggest worry for 2012 is that our economy is in danger of becoming listless on the international stage, because businesses do not realise that the opportunities to export products and services do exist.
The recent CBI report on the state of exporting, which shows that the UK share of global exports has fallen sharply from 5.3 per cent to only 4.3 per cent in only ten years, should alarm any UK business with long-term ambition of overseas expansion.
There are, however, a number of simple but straightforward ideas the government could adopt to encourage international trade in 2012.
Export tax credits should be a start. In much the same way that R&D tax credits have helped to support start-up businesses in technology sectors, such as the successful scheme for bio-tech businesses in Liverpool, expenditure on appointing new staff or increasing marketing spend in new territories could be subject to tax breaks, thus ensuring that it is only through a strategy of exporting, that a company can benefit.
There should also be a reduced tax on profits generated by export sales. While HM Revenue & Customs may frown on this, there is a need to speculate to accumulate. If you reduce the tax burden, you will increase the appeal of trading overseas to businesses, which in turn creates the domino effect of getting accountants and advisers talking to their clients, and this leads to more businesses taking on the challenge.
The net result is that the HMRC and therefore the UK, takes money from a much larger pool of companies – tax revenue that it will never receive through the current status quo – without individual businesses facing a bigger tax bill.
As a final point, UK businesses have been told for so long that we lag behind our international neighbours and trading partners, for a multitude of reasons, that many great businesses do not put their heads above the parapet. Excitement in the possibility of enterprise has been beaten out of the UK – business leaders and politicians need to work hardest to get this fight back.
We need to stop paying poor lip service to the idea of an ‘export led economy’ and start putting the spotlight on those who have succeeded.
Gavin was named in the 42 under 42 in 2009. For more information on this year’s class, and to see our dedicated website, click here.
