New research from Grant Thornton UK LLP reveals that while Brexit and global geopolitics has challenged some mid-market UK businesses, it has also presented new trade opportunities.
Grant Thornton conducted a study of 300 leaders from UK mid-market businesses that are trading internationally to understand how they are responding to the global political climate. The study coincides with the launch of Grant Thornton’s Growth 365 International service. The service, which is supported by the Department for International Trade (DIT), draws on Grant Thornton’s global network and immensely experienced growth advisors to help businesses leaders research, plan and execute entry into new markets or get more value from their existing operations.
The study found that Brexit has hampered UK businesses significantly:
The study also highlights that many businesses (64%) believe ‘Brand Britain’ has been weakened and foreign perceptions of Britain have changed as a result of Brexit. Half agree USA businesses are less likely to partner with their businesses due to the uncertainty of Brexit.
Yet, in spite of this, Brexit has also encouraged UK businesses to step up and step out into new markets, with 67% saying Brexit has prompted them to look for business opportunities beyond Europe and 56% saying Brexit has prompted them to develop new products and services, presenting new offerings and benefits to the global market. Almost three quarters (73%) also believe that the UK is more concerned about the impact of Brexit than the rest of the world.
In spite of Brexit, Europe is still the top market when it comes to current (95%) and future (45%) trade opportunities. But the current political climate has encouraged UK businesses to make trade opportunities with Asia (41%) and North America (32%) their next priorities:
The US remains attractive thanks to its supply of talent, legal framework and economy, yet its political situation presents some uncertainties. More than half (54%) say the Trump administration has discouraged investment in the USA, with a similar number (55%) believing President Trump’s tax and tariff policies are reducing their competitiveness in the US market.
Simon Littlewood, Partner and Head of Growth Services at Grant Thornton UK LLP comments:
“The findings that Brexit has significantly impacted trading plans for mid-market businesses certainly echoes the conversations we’ve had with our clients - people are bored of Brexit speculation. It’s encouraging that so many see Brexit related change as a proactive opportunity and are acting on what they know now and are doing so with confidence in contingency plans ready for various alternate outcomes. It’s the perfect time for businesses to take advantage of the changing political climate by taking a step back and re-evaluating their game plan.
“The US and Asia can present huge opportunities for businesses looking to grow globally and we’ve seen many challenges around cultural understanding and market differences. Some businesses feel that America is culturally similar to the UK but some buyer behaviour and market strategy is quite different. Many businesses also see the Chinese market as a united entity but it’s actually quite fragmented. That’s why getting the right advice in advance is key.”
“We know that overseas expansion is a top priority for growth – but also a key challenge facing the mid-market. Benefitting from the experience of experts who have grown global businesses and have specialist knowledge of international markets can make a real difference to success. Growth 365 International has been developed to support businesses in this journey by offering them access to experts who understand their challenges and can help develop long term, sustainable strategies because they’ve done it themselves many times before.”