Wanted: British export and innovation expertise post-Brexit

The UK needs new ideas and skills for expanding sales worldwide
Peter Bellerby at the workshop of Bellerby and Co. © Julian Love

If ever there was a time for UK businesses to display ingenuity in ex­porting and innovating, it is surely now, amid the uncertainties over the UK’s exit from the EU and rising global trade tensions.

Some 230 companies have risen to the challenge by winning a Queen’s Award for Enterprise, the UK’s highest official ac­colade for business success.

Their contribution — and more — is certainly needed. The value of UK exports rose by 11 per cent to £617bn last year, buoyed by faster growth in the UK’s main trading partners. They remain well adrift, however, of the now-abandoned target set by former chancellor George Osborne six years ago to double annual exports to £1tn by 2020.

Companies’ drive to innovate and to sell goods and services overseas will be vital as Britain prepares for Brexit in March 2019, at a time when trade conflicts threaten to provoke a retreat from globalisation.

The Office for Budget Responsibility, the fiscal watchdog, expects export growth to “flatten off altogether” between 2020 and 2022 as growth in UK export markets eases and Brexit “weighs on the UK’s export market share”.

Some 238 awards were made this year, up from 176 in 2017: mostly for international trade and innovation, but also for sustainable development and for promoting opportunity through social mobility. They range across sectors such as software, telecoms, public relations and food and drink.

300,000

The number of UK companies making products that could be exported but currently have no overseas sales, according to Department for International Trade estimates

The awards display great variety. Winners in the international trade — that is, exports — category range from the likes of Cokebusters, which provides engineering services for oil refinery furnace tubes, to John Packer, which sells and rents brass and woodwind musical instruments.

Among the most exquisite products in this year’s Queen’s Awards for Enterprise are the handmade globes made by Bellerby & Co, which has been recognised for international trade. Peter Bellerby founded the London-based company in 2008 after he could not find a handmade globe as a present for his father’s 80th birthday. He decided to make his own.

Innovation award winners include Rentokil Initial, the FTSE 100 company, for its Radar (Rodent Activated Detection and Riddance), a bait-free, humane mouse trap for sensitive commercial environments such as hospitality or pharmaceuticals.

We have to second-guess — or third-guess — what the outcome might be

Paul Morris, founder of Addmaster

Most winners are smaller businesses, for whom the awards provide important recognition. The first winners were an­nounced in 1966, well before Britain entered the European Economic Community. They have re­ward­ed excellence through ups and downs, though the political and econ­om­ic environment has rarely been so unsettled as now.

The government is drawing up an export strategy. The Department for International Trade estimates that more than 300,000 UK companies make products that could be exported but currently have no overseas sales.

Liam Fox, international trade secretary, wants to encourage sales to markets beyond the EU, which comprise 57 per cent of UK exports, compared with 46 per cent in 2006. However, eight of the top 10 destinations are in Europe. The US remains Britain’s largest market but efforts to boost sales to China and other fast-growing economies have been slow. China is the eighth largest, representing 3.1 per cent of UK exports, down from 3.6 per cent in 2014. Exports to India make up just 1 per cent and have fallen since 2011.

One business doing its bit on trade is Cheeky Chompers, supplying babycare pro­ducts, started in Edinburgh in 2012 by Amy Livingstone and Julie Wilson, who met at antenatal classes. It recently began selling in China in addition to 35 other markets. “We have taken our time with China — probably more so than any other export market — because we felt it was very important to get the right partners,” says Ms Wilson.

Another export winner, Frog Bikes, which makes lightweight children’s bi­cycles, moved production from China to a new factory in South Wales in 2016, having grown rapidly in just three years.

Uncertainty over tariffs and trading arrangements is frustrating for busines­ses, even though agreement with Brussels on a Brexit transition until the end of 2020 offers hope of more time to plan.

“We have to second-guess, or third-guess, what the outcome might be,” says Paul Morris, founder of Addmaster, an­other trade winner. His Stafford-based company makes additives for polymers, paper, textiles and paints, and distributes its products globally. It recently launched a Chinese-language website.

Although the awards reflect the diversity of the UK economy, manufacturing remains well represented. Scotland’s Bridge of Weir Leather operates one of the biggest tanneries in Europe, and supplies leather to automotive brands including Volvo, Jaguar Land Rover, Lincoln and Aston Martin.

Some award winners were started by migrants, such as Pentland Group, which owns footwear and apparel brands such as Speedo, Berghaus and Ellesse. Berko and Minnie Rubin, from east­ern Europe, began it in 1932. Still a family business, it has global revenues of £2.9bn.

Eight companies have won double trade and innovation awards, including Telensa, a Cambridge-based operator of wireless street light control systems used in more than 50 cities. Its network can also carry “smart city” sensors that provide data on, for example, blocked drains and air quality. Somerset’s Sky­Demon, another double winner, makes air flight planning software, including innovations that have become standard.

Innovation winners include BjSS, a Leeds-based information technology consultancy. It assists cautious org­anisations in carrying out big projects incrementally, including the National Health Service’s so-called Spineinfrastructure, which includes details of 80m people and connects doctors and patients to national services. Another is Bristol’s Ndemic Creations, which created Plague Inc, a hit video game that simulates infectious disease outbreaks.

The sustainable development category includes Divine Chocolate, owned by cocoa farmers, which sells premium Fairtrade chocolate worldwide, and LittlePod, which produces food made with sustainable real vanilla.

Copyright The Financial Times Limited 2018. All rights reserved.
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