2014 is getting off to a good start as business optimism is on the upturn. The CBI recently produced data showing that profitability has risen for the fifth consecutive quarter, employment is growing at its fastest pace since 2007 and optimism is rising at its fastest rate since the survey began in 1989.
However, there is no place for complacency. We enter 2014 with strong signals of a recovering UK economy and with trade and investment playing its part but not by enough. Our trade deficit in goods at the year-end was the biggest ever and as a region we in the North West need to address this.
2014 will be a year of consolidating our recovery, and in order to do this we need more exporters. In particular, we need more firms to look at opportunities in high growth emerging markets and we need to see more businesses investing in their technology, their people and their growth. The UK has only 0.8% of world population. It is my intention to make 2014 the year when we take on the other 99.2%!
Businesses that export are, on average, 34% more productive, 75% more innovative, undertake three times as much R&D and are 12.5% more resilient than businesses that don’t, and I believe that an assessment of exporting potential should feature in all businesses’ plans for 2014. Even if they are not ready to act on them immediately, export opportunities keep them in mind for future growth.
In 2013, 50% of our exports of goods and services went to the EU, but this barely represents 7% of world population and only 19% of its GDP, so we have to look further afield.
The EU is not growing but many countries are expanding much more rapidly, and we must have a global outlook to take advantage of where growth is happening.
Everybody has heard the acronym BRIC, Brazil, Russia, India and China. These are all powerful economies in their own right and growing at some considerable speed and then there are countries like Mexico, Indonesia, South Korea and Turkey, which I pointed to as future growth markets in July 2013 and which I call the MIST nations.
If you put the BRIC countries and the MIST countries together, they represent an astonishing 50 per cent of world population and 33 per cent of world GDP and they are all seeing high levels of growth.”
Exporting is not just for manufacturers. In fact, since services make up 80% of the economy but only 33% of our exports, there is massive room for improvement. Since 2009, at the worst of the downturn, exports of manufactured goods have grown by 30% but of services by only 8%. Many firms in the services sector simply don’t consider international aspects, but they need to get involved.
Our new minister, Lord Livingston, recognises that we have a vital role to play in attempts to transform the economy and to re-balance towards exporting. In 2013 I set a challenge to find 1000 new exporters in my region, the North West - I hope that we can exceed this and really boost growth in the region in 2014.