Industry-led Ecommerce Report Lays Down Challenge for UK

23 September 2024

Delivered to Parliament on 9 September, a new report by the industry-led E-Commerce Trade Commission has made a raft of practical recommendations to the UK government, with the aim of boosting export growth for SMEs.

Entitled Small Business, Big World: Ways to Boost UK Small Business Exports, the report draws on primary research by the Commission, including roundtables and surveys with 525 ecommerce businesses, to discover the main barriers faced by SMEs in the world of ecommerce.

The Commission includes senior managers from Amazon, Alibaba, eBay, Google, Shopify, among others, and the report itself was written by the Social Market Foundation, a leading cross-party think-tank.

The report highlights the great opportunity that ecommerce offers to small exporter businesses, and stands by the assertion of its 2022 report Just a Click Away, that “increasing the number of SMEs which export goods by 70,000, could add £9.3 billion a year to national income and create 152,000 new jobs” – a target it believes is achievable.

However, the new report concedes that “the UK’s recent record on SME exporting is not encouraging”.  It states that “the best evidence indicates that the proportion of the total value of UK goods exports, accounted for by SMEs, has been falling. It was estimated to be 40% in 2010 and had reduced to around 30% by 2020.”

Identifying and Removing Barriers

The report insists that:

“…policymakers need to take steps which could lessen the internal constraints that hold back SMEs and reduce the external obstacles to internationalisation, which smaller businesses face. The external barriers to export success, include factors associated with the export process like customs bureaucracy and the cost and reliability of logistics services. Moreover, there are initial costs to starting the internationalisation process, as well as recurring costs which persist, if a firm continues to export.”

Industrial and trade strategy

The report recommends that the government should integrate the expected industrial strategy with the expected trade strategy, with a particular focus on SME ecommerce as “the best channel for expanding exports by small firms”, and integrated support offerings for business and export growth.  It also recommends the merging of official guidance about exporting (e.g. from DBT and HMRC) into a single hub. 

More grants should be made available through DBT export support services, and funding for investment in “trade tech” should be made available to up to 70,000 SMEs who are considering the use of ecommerce for exports, it says.

Easier engagement with developing markets

The report calls on the government to “Ensure that, as it pursues the digitisation of trade documentation and the digitalisation of the wider trade process, including setting up the promised Single Trade Window (STW), it integrates small business education about these changes (especially the STW) along with access to advice for SMEs, into their rollout.”  It also asks the government to help developing countries digitise their trade processes.

The government should pledge to work with industry to identify a number of emerging markets with high ecommerce potential, and subject these to “targeted and intensive efforts”, including more trade delegations, according to the authors.

Encouraging female entrepreneurs

The integrated industrial and trade strategy should aim to increase the number of UK female-owned SMEs which export goods, with a target of adding 35,000 by 2030 – half the total number of new exporting businesses proposed overall.

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