Previously around half of the total exports of the United Kingdom were to the partner EU countries. Leaving the European Union will certainly therefore have an impact on British exports, but there are opportunities for UK based companies to export to other, potentially more dynamic markets which offer tangible returns..
Markets including China, South Asia, the Middle East, and Latin America are playing an increasingly important role in defining global economic growth. They offer new investment opportunities and their higher economic growth rates offer the potential of higher expected returns. Although emerging and frontier markets experienced economic slowdowns as a result of the COVID-19 pandemic, the MSCI Emerging Markets Index outperformed global developed markets equities in 2020, which is an interesting indicator of where to look for your next export destination.
The pandemic has brought about a significant slump in global trade volumes, although the outlook for 2021 is much more positive, as economies start to open up again and are boosted by a backlog of demand.At the same time, however, the crisis has accelerated the adoption of digital trade processes and raised the profile of digital innovators within the industry.
For those companies agile enough to engage in the new digital era, it has opened up a wealth of exporting opportunities. For example, digital technology is enabling micro, small and medium-sized enterprises (MSMEs) across the globe to identify counterparties and to trade goods over far greater distances, while ongoing advances in communication and transportation are supporting the growth of more sustainable global value chains.
As national economies adjust to a more digital ‘business normal’, many governments are investing in programs designed to rebuild their economies, including by addressing critical gaps in their infrastructure which will help them to handle such crises in future. Projects include investment in sectors such as healthcare (hospitals and medical services), and infrastructure (water purification, virtual classrooms, and internet connectivity) in which UK companies excel.
The UK is a leader in wind energy sector, so increased global investment in clean power has great potential of attracting exporters to emerging markets, sowing the seeds of future skills and promising much-needed jobs in this sector. In 2019, the UK already recorded exceptional export growth in emerging markets, including a 40% increase in trade to Taiwan and 19% to India.
British Exporters may have traditionally faced challenges based on the export destination as funders and insurers struggled to navigate these dynamic transactions. These have been vastly diminished thanks to the evolution of export finance marketplaces, like Fineon Exchange, the AI powered global marketplace for trade finance assets. Such marketplaces allow companies to leverage the latest technological capabilities, as well as knowledge and specialist expertise, and avail of the very best service and trade solutions, including online access to trade finance and trade credit insurance, without the need for substantial investment. In doing so, they help to help support the global trade landscape.