What is the future of the UK as a global trading partner? What does business leaders think of the UK amidst a shifting global economy? What are the key growth markets and options for a future export approach?

Public First worked with Santander to conduct a poll of over 2,100 business leaders and decision-makers in five key markets (the United States, India, Japan, Spain, and Poland) to answer some of these questions. The research report, available [here] found that:

Over the next ten years, the UK is set to continue its specialisation as a producer of professional services; namely financial, digital, and business services. A third (33.7%) of polled business leaders felt that the UK was a world leader in financial services, whilst 26.0% said the same about technology and digital services, and 21.2% said the same about business services and management consultancy. Accordingly, financial and business services constituted an average of 55.9% of all UK service exports since 2016, and 27.3% of all exports in the same period. Moreover, business and digital services have seen significant growth in exports, with the potential to almost triple in export value by 2033.

Comparatively, the UK’s manufacturing sector requires further digital integration and reputational investment to remain competitive. The UK falls to fourth place behind Germany, the US, and China when business leaders are asked their most preferred country from which to import
manufactured goods, selected by only 10.3% of the sample. Business leaders in manufacturing cite that the UK’s relative competitiveness here is at risk. Trading data corroborates this; growth in export value in the manufacturing and machinery sectors has been muted relative to services. Moreover, some specialist manufacturing exports to European markets have declined as new administrative barriers to trade and disruptions to labour flows have resulted in additional frictional costs and delays associated with purchasing UK commodities.

Even as world’s economic nexus moves steadily east, the UK benefits from continuing to look west simultaneously. US business leaders express significant positivity about the UK as a trading partner, citing it as their go-to overseas supplier of choice for financial, business, and digital services. From the markets polled, the US alone firmly attested to the UK’s continuing attractiveness as a business partner. In line with the findings from polling, UK exports to the US have grown significantly faster than exports overall over the last 30 years, and the UK’s manufacturing sector demonstrated broad resilience to tariffs on imported goods implemented under the Trump administration.

The transformative global rise of the digital and green economies offers important new export opportunities for the UK over the coming decade. Just under half (47.4%) of all business leaders polled felt that the UK’s digital services sector was better than that of comparable countries.
Economic data indicates the significant benefits of this sentiment; G7 digital services exports are set to grow by 6.6% a year over the next decade,
whilst green exports are projected to grow by 8.3% over the same period. Investment trends indicate that these sectors stand on the precipice
of transformative levels of growth, opening important new export opportunities for the UK to capitalise on.

As the Government thinks through a maximally effective UK trade and exports strategy, the report recommends that:

UK trade strategy is at its most effective as a partnership between government, businesses (including SMEs), and the wider private sector in pursuing country and sector-specific engagement. Primarily, economic growth, job creation, and increases in export value will be driven by the private sector seeking to grow effectively and efficiently. Government possesses significant potential to determine the speed and durability of this growth: policy interventions to provide a stable economic framework with competitive tax rates, ample skilled labour, and easy access to international markets can create a supportive ecosystem in which businesses can maximise their export capacity and growth rates.

A maximally effective trade strategy leverages the full potential of British SMEs in expanding professional services, revolutionising manufacturing, and harnessing Western markets. Harnessing the UK’s comparative advantage in fast-growing professional services sectors, as well as continuing to update the UK’s manufacturing offer and fully leaning into the country’s reputational advantage in Western markets should triple the value of UK exports in the next ten years. The UK has historic and unparalleled advantages with regards to global trade, including its geopolitical position, stable and flexible markets, and the English language.

You can read access the full report here. Polling tables are available on request – please email damayanti.chatterjee@publicfirst.co.uk for more information.