Staying ahead in the global race: services exporters show the way
When the UK government talks about rebalancing the economy from consumption to exports, most people think of manufacturing. But exports of services are every bit as effective a way of rebalancing, as the EY ITEM Club special report on exports shows.
Late last year, in our special report on UK exports overall, we noted that successful exporters target the right markets with a product offer at the right quality and price. This applies in services as well, with the proviso that the trade-off between quality and price is tilted more heavily in favour of quality. While price matters, it is our consistently high quality that has established the UK as a pre-eminent global centre for services. As with German manufactured goods, people buying British services feel they know what they’re going to get. As the report makes clear in Financial and Business Services the UK has a truly world class offer and all the signs are that this situation will continue as the world economy recovers.
But this doesn’t mean our services exporters can rest on their laurels. Like their counterparts in manufacturing, they need to pick their battles and be clear on where to compete.
This involves four steps:
►Examine the potential markets for your services and identify those with the best growth prospects. China is an obvious example as it shifts towards a greater reliance on consumer spending for its future expansion.
►Assess the competitiveness of your services in these markets. Can you sustain quality at the right price?
►Examine the scope to differentiate your services in each market, including drawing on the strength of ‘Brand UK’ in services.
►Identify any structural issues that might hinder your exports, such as local trade barriers or shortage of skills, and take steps to address these, perhaps including working with government.
In the global race for services exports, the UK is making great headway. But now is no time to ease off: in a competitive world, our services exporters need to keep raising their game — and their sights.