More export advice is needed earlier in the process
24 March 2022
Positive impact of advice on developing export-tradeable goods or services
Rural business support is needed in flexible ways to contribute to rural firms developing their untapped potentials with regards to exporting, writes Inge Hill, co-investigator at NICRE based at the Royal Agricultural University, and part of the NICRE team researching exporting and business support, led by Kevin Mole, with colleagues Thao Nguyen and Sara Maioli.
Our research Rural family businesses and exporting behaviour (February 2022) (PDF: 1.1MB) on the Longitudinal Small Business Survey from 2015 to 2019 exposes how the role of advice is linked to the decision to develop tradeable goods and services. See also our blog Exploring exporting behaviour in UK rural and urban firms.
On the one hand, we find that SMEs seeking and taking formal strategic export advice are more likely to develop export-capable goods and services than those that are not. In other words, taking strategic export-related business advice has a positive effect on firms helping to develop export-capable goods or services.
On the other hand, once firms are export capable, taking strategic export advice is lowering the possibility of actually exporting. One possible reason we found is that preparing the business for exporting leads the firm to identify internal or external challenges, which delays the start of exporting, sometimes forever. Interestingly, taking advice on technology and e-commerce makes firms more likely to export.
Timing of advice is crucial for gaining benefits
The strong influence of advice on the likelihood that a firm has a tradeable good or service is a novel finding of our research that calls for reflection on what kind of business advice, and when in the process on a firm’s journey from not exporting to becoming a constant exporter it is taken. Overall, the take-up of advice for exporting is very low (overall under 1% of all businesses in the survey reported taking export advice).
Women less likely to develop export-capable goods and services
Our research also finds that women-owned businesses are much less likely to develop tradeable goods and services. This finding suggests a need for improved targeting of strategic export advice and understanding of any barriers constraining women business owners’ interest and capabilities in developing export-capable goods and services. Surprisingly, there were no differences in exporting behaviour among businesses owned by women and men once they had export-tradeable goods or services.
We conclude from our research that investment in business advice on exporting is more likely to show a higher return on investment if focused on helping firms to develop export-capable goods. Currently, too little advice is addressing this phase in the firm’s journey towards becoming a constant exporter.
