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SUPPORTING SMES & MIDCAPS
Helping SMEs & Midcaps invest in growth
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EXECUTIVE SUMMARY
The UK’s SMEs & mid-caps are agile innovators and exporters in their own right. Supporting their
investment and growth would strengthen the UK’s global competitiveness.
1. Modernise Investment Allowances to spur capital investment
Reforming the UK’s unpredictable and uncompetitive system of investment allowances would free up
cash flow to support business investment
2. Inject genuine competition and diversity into the UK banking market
Greater competition, possibly from a state-backed business bank, would bring down 34% SME loan
rejection rates & collateral requirements 3x higher than in the EU
3. Improve access to new markets and customers for UK SMEs and Mid Caps
Reducing barriers to exports, including improving coordination of overseas missions, streamlining
export controls and simplifying funding for export would boost the UK supply chain’s ability to access
and win overseas customers
STRENGTH OF OUR SMES & MIDCAPS
132,000 Direct employees in our SMEs & Midcaps
60% Employ apprentices and trainees
£30bn SME & Midcap turnover
40% Of turnover from export sales
80% Planning to increasing investment in 2015
77% Say ‘financial cost of investing’ is the most important investment criteria
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MODERNISING INVETMENT ALLOWANCES
According to the Centre for Business Taxation (CBT), the fact that capital allowances in the UK are
amongst the least generous of all OECD and G20 countries29
is evidence that the UK appears to be
less committed to attracting inward investment by capital-intensive companies.
Table 1. UK’s ranking in OECD and G20 (in 2012) for Investment Allowances for:
Plant & Machinery 28th
(of 41 countries in the OECD & G20)
Industrial Buildings 41st
Intangibles (including R&D tax Credits) 14th
Changes to both Investment Allowances and the R&D tax credit will have helped close boost the UK’s
international ranking. In particular, the Annual Investment Allowances was raised to £500,000 until the
end of 2015. The rise in the AIA will have reduced the cost of capital and boosted cash flow form
SMEs and Midcaps. Yet these benefits are set to expire at the end of 2015, thus raising the cost of
capital for UK supply chains.
The R&D tax credit has similarly seen improvements, in particular the ‘Above the line’ reforms
announced originally in Autumn Statement 2011 and the recent rises in both the rates for loss-making
SMEs and for Large Companies claiming the above the line relief.
Recent revisions and change to definitions show that overall business investment has rebounded
slowly with the rest of the economy. Investment in ICT, plant and machinery, however, fell further in
the recession and have only recent come back to pre-recession levels.
A significant part of the reason for the sharp rebound is that investment in ICT, plant and machinery
investment has risen by almost 30% since the AIA was raised to £250,000 at the start of 2013. It is
worth nothing that smoothing out the effects of the wintery weather at the end of 2012 shows a 16%
increase, with a third of that coming in two quarters since the AIA was raised further to £500,000 until
the end of 2015. In addition, the kink in investment at the start of 2013 may reflect the fact that some
companies may have delayed investment until Q1 2013 to take advantage of the higher AIA.
Change to investment allowances, in this instance to the AIA, affect investment by changing the user
cost of capital. In this instance, the increases in the AIA have lowered the user cost of capital and
spurred investment in additional ICT, plant and machinery (all of which would fall under the AIA).
Analysis by the Centre for Business Taxation suggest that increases in the AIA increase investment
by up to 30%. In addition, the CBT estimate that for every £1 of Exchequer cost of the higher AIA,
SME will increase investment by an additional £4-£10.
01 MODERNISING INVESTMENT ALLOWANCES
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This boost to investment, however, is set to expire at the end of 2015, explaining in part the additional
increase in investment in 2014: companies are seeking to take advantage of the AIA now as post-
election the rate might change again.
Chart 1. Investment has increased significantly since AIA was raised above £250k, 2008 Q2=100)
Source: ONS and ADS
Modernise Investment Allowances
Although the recent increase in the Annual Investment allowance to £500k have provided significant
cash flow benefit for SMEs and Midcaps wanting to invest in new capacity, it is only temporary and
the AIA has been chopped an changed several times in recent years. The next Government should
introduce a more sustainable, long-term reform of investment allowances, beginning with
reintroducing an Industrial Buildings Allowance.
60
70
80
90
100
110
120 Business Investment ICT, Plant & Machinery
£250,000 AIA introduced
£500,000 AIA introduced
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COMPETITION & DIVERSITY IN BANKING
Despite several Government-led efforts to boost lending since the financial crisis, net lending to
manufacturing in the UK is almost 50% below the pre-recession peak. By contrast, net lending to
manufacturing in the Eurozone is only 10% below the pre-recession peak. And though not directly
comparable (as it includes lending to non-industrial sectors)1, net lending in the US is actually up
almost 5% relative to the pre-crisis peak.
Not only is net lending to manufacturing in the UK far below the pre-crisis peak, it has yet to rebound
to pre-credit crunch trends. As Chart 1 shows, net lending to manufacturing in the UK is still 45%
below the pre-2007 average, while in the EU net lending to manufacturing is up 18% on the pre-2007
average.
Chart 2. Net lending to manufacturing in the UK has fallen further, faster (Net lending, 2008 Q4=100)
Source: Bank of England, European Central Bank, Federal Reserve
Part of the dramatic fall in net lending to manufacturing in the UK comes from companies choosing to
pay down debts and rely less on borrowing to finance their business. However, the UK has also seen
an extraordinary rise in loan rejection rates relative to other countries, which goes some way in
explaining trends seen in the SME Finance Monitor.
Reduced reliance on external finance
Data from the quarterly SME Finance Monitor has shown a consistent fall in the percentage of SMEs
using external finance over the past three years. In Q1 of 2011, just over 50% of SMEs were using
1 Source: Bank of England, European Central Bank and Federal Reserve. The US data does not disaggregate commercial and
industrial lending, and was also supported by the Fed’s significant Quantitative Easing programme. The US data on C&I lending included in this report is therefore not directly comparable, but included for completeness..
40
50
60
70
80
90
100
110
120
UK EU US (C&I)
02 COMPETITION & DIVERSITY IN BANKING
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external finance of some sort, compared to 40% three years later in Q3 of 2014. Over the same
period, the percentage of SMEs in the ‘permanent non-borrower’ category has risen from 30% in Q1
2011 to 40% in Q3 2014.
A spiralling loan rejection rate in the UK
Since 2007, the loan rejection rate in the UK has risen almost six-fold rose to become the EU. The
rate in the UK rose from 1-in-20 loans rejected in 2007, to 1-in-5 in 2010. In 2013, according the SME
Finance Monitor, just over 1-in-3 SME loan applications were rejected (i.e. ended with no loan
provided) in 2013.
Chart 3. UK loan rejection rate up four-fold in seven years
Source: Eurostat (2007 & 2010); SME Finance Monitor & Survey on the access to finance of SMEs in the euro area (2013)
In contrast, the loan rejection rate in Germany was slightly higher than the UK just as the credit
crunch began in 2007, rising only modestly from 6.7% in 2007 to 8.2% in 2010. Yet the rejection rate
in Germany in 2013 was just 2.5% in 2013, according to the EU Survey on Access to Finance of
SMEs in the euro area, 14x lower than reported in the UK. It has subsequently risen to over 10% in
Germany, still almost one-third the rate in the UK.
This rapid rise in the rejection rate in the UK suggests that the 50% fall in net lending to
manufacturing in the UK is not simply due to companies choosing to pay down debts, but rather being
rejected for loans and/or subsequently being discouraged from using external finance altogether.
Why is viable investment going unfunded?
Where clear opportunities for loans are being missed, SMEs are citing unsuitable terms and
conditions and cost as factors blocking their update of loans.
5.6 6.7
3.0 2.0
1.2 0.7 0.0
20.8
8.2
13.2
7.0
4.9
10.8
0.2
29.0
10.1
11.8
9.0
18.6
26.9
7.6
0
5
10
15
20
25
30
35
UK Germany Spain France Italy Greece Finland
% 2007 2010 2014
02 COMPETITION & DIVERSITY IN BANKING
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According to EEF, 35% of small enterprises cited a lack of available finance with the right terms and
conditions as a reason viable investment in their companies are going unfunded.2 This is compared to
less than 20% of medium sized enterprises citing the same reason. Similarly, 35% of small
enterprises cited a lack of available finance at the right cost as a reason for being unable to take out
loans.
It is clear therefore, that there is a disconnect between the types and conditions of loans available and
the requirements of companies they are targeted at.
UK banks are almost three times as likely as average EU banks to require collateral on large loans of
over £100,000. Figures from the SME Finance Monitor and EU Commission highlight the large gap
between the requirements of banks in the UK, where 83% of loans over £100,000 require collateral as
security, and mainland Europe where a comparatively small 29% of loans between €250,000 and
€1m require the same.3
Troublingly it is the most innovative firms, those developing new processes, methods and products,
that are having the greatest problems accessing finance. 44% of innovative companies attempting to
access finance from their first source, including those in the aerospace, defence, security and space
sectors, are having difficulty, as opposed to 33% of non-innovator companies. Similarly and of even
greater concern, 22% of innovative SMEs report being unable to access finance from any source,
compared to 15% of non-innovative SMEs.4
1.2 An old problem in need of a substantial, sustainable solution
Although the financial crisis has placed a spotlight on banks’ lending to SMEs, access to adequate
and appropriate finance is a problem that has plagued smaller businesses – and policymakers – for
decades.
Through this time, the primary policy focus has been on the provision of equity investment in SMEs. In
1945, the Bank of England and the major banks created the Industrial and Commercial Finance
(ICFC) to invest in small, growing businesses. In the 1980s, the Thatcher Government focused on tax
breaks for equity investments in start-ups and small businesses. The subsequent Labour Government
preferred using public funding to incentivise private investment in a post-industrial, knowledge
economy.5
Through the last 30 years in particular, the focus of has therefore shifted sharply away from the
provision of long-term working and growth capital to manufacturing companies. The recent financial
crisis exacerbated this problem, placing a significant focus on the availability to, cost of and diversity
of banking products for manufacturers. The most recent Government has put in place a range of local,
regional and national funding and finance initiatives to support companies investing in jobs and
growth in the UK.6
2 EEF/GfK NOP Investment Survey (2012)
3 SME Finance Monitor, EU Commission and Federal Reserve
4 Big Innovation Centre
5 NESTA (2009) From thin markets to funding gaps
6 ADS Group’ subsidiary Farnborough International Limited recently was awarded a loan via the Local Growth Deal.
02 COMPETITION & DIVERSITY IN BANKING
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Two recent reviews on access to finance7 are worth highlighting, however. The Rolands Review
8 in
2009 focused on the provision of and access to growth capital for SMEs. The review found that while
many SMEs needed equity-based growth capital, almost 30% of SMEs need other, non-equity based
growth capital:
“5,000 SMEs likely to experience significant problems in accessing growth
capital in amounts above £2mn and below £10mn…evidence suggests 5% of all
SMEs, mainly high-tech firms, need equity funding and a further 30% of all
SMEs may be targets for other forms of growth capital.”
Given that bank finance – and therefore the provision of debt-based growth capital – was unlikely to
rebound quickly after the financial crisis, the subsequent Breedon Review9 in 2012 on access to non-
bank finance suggested that:
“…the willingness of banks to lend to businesses will be constrained in future.
Capital adequacy rules have tightened considerably including higher capital
ratios and new specific rules on risk weightings on SME loans and overdrafts.
The impact of these rules is likely to fall disproportionately on smaller
businesses.”
Combined, these two reviews demonstrate that a significant Growth Capital gap persists for SMEs in
the UK and that regulatory constraints placed on banks is likely to significantly limit banks’ ability
address these finance needs of SMEs.
7 Rather than discussing the range of initiatives that provide funding mechanisms designed to support, for example, innovation or training, the
discussion below focuses primarily on the government-supported initiatives that are related directly to boosting the availability of finance for companies or that are designed to impact global investment decisions. The Department of Business has an interactive finance and funding guide for companies that covers over 700 local, regional, national and international initiatives. It is beyond the scope of this report to cover each and all of these. 8 BIS (2009) The Provision of Growth Capital to UK Small and Medium Sized Enterprises
9 BIS (2012) Boosting Finance options for Business
02 COMPETITION & DIVERSITY IN BANKING
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Table 2. A long-history of reviews and initiatives to address finance gap… …and assessments of their impact 1945 – 1980: Providing long-term capital
In the post-War period, ICFC was set up to provide SMEs with long-
term capital without sacrificing the SMEs’ ownership, yet also
rewarding the investors. Overtime, ICFC (and its successor 3i)
followed the general drift of the wider venture capital and private equity
industry away from investing in smaller deals to larger deals.
1980s-mid 1990s: A focus on small business
In the early 1980’s the Thatcher Government placed a significant
emphasis on supporting start-ups and small businesses grow. This
emphasis led to a series of targeted tax income and capital gains tax
breaks that incentivised private investment in small and growing
businesses.
Late 1990s-2000s: Post-industrial push
In the late 1990’s, the Labour Government’s priority was to support its
push towards a post-industrial economy. Consequently, the
government’s focus was on supporting new or knowledge economy
industries such as software and technology companies rather than
industrial sectors, such as aerospace or automotive.
Through the 1998 Competitiveness White Paper and the 2003
Treasury ‘Bridging the Finance Gap’, the government’s policy priorities
focussed incentivising equity investments in the £500k - £2m range
being vacated by venture capital and private equity.
2007-current: Financial crisis and recovery
When Lehman Brothers collapsed in Autumn 2008, Government’s
primary access-to-finance policies, such as the Enterprise Capital
Funds (ECF), were equity focused. Government’s subsequent efforts
to boost bank lending, such as through Project Merlin, have had limited
impact. The capitalisation of the British Business Bank was a
significant step forward in terms of creating an arms-length (from
Government) body that could stimulate competition in the SME finance
market.
BIS International Innovation Benchmarking:
“The question to ask is whether the quantum and targeting of existing government interventions…is sufficient to address this issue for the UK.” NESTA
10
“Insufficient fund size and the restrictions on the size and location of investments limit the ability of these funds to generate commercial returns. “These schemes have had a positive impact on [individual] firm performance…. However, the size of their impact remains small to date.”
National Audit Office
11:
“…BIS and HM Treasury have not managed the range of initiatives
sufficiently as a unified programme, have not clearly articulated what
the schemes are intended to achieve as a whole, given the resources
available.
"…at present, value for money has not been demonstrated.”
10
Nesta (2009) 11
National Audit Office (2013)
1945-1980
ICFC (‘45); Radcliffe
(‘59), Bolton (‘71) &
Wilson (‘80) Reports
1980s
Small Firm Loan
Guarantee Scheme;
Business Start-up
Scheme; Business
Expansion Scheme
1990s
Enterprise Investment
Scheme, Venture
Capital Trusts; AIM
1998
Small Firm Loan
Guarantee Scheme;
Business Start-up
Scheme; Business
Expansion Scheme
2003
HM Treasury ‘Bridging
the Finance Gap’,
Enterprise Capital
Funds
2011
Breedon Review; Project
Merlin
2009
Enterprise Finance
Guarantee;
Rowlands Review
2012
National Loan
Guarantee Scheme 2013
British Business Bank;
Industrial Strategies;
Funding for Lending
02 COMPETITION & DIVERSITY IN BANKING
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Current Government-backed schemes do not provide value for money
In 2013, the National Audit Office conducted a review of the primary Access to Finance schemes run
by BIS. The NAO report notes that while the scale of the funding gap is on the order of £10bn -
£11bn, the government schemes currently only address £3bn of this problem. Although the NAO
judges that the schemes – as listed in Table 2 – do meet their objectives own individual objectives,
the NAO does not believe that the schemes do not deliver value for money as, in aggregate, HM
Treasury and BIS do operate them as a unified whole, nor is it clear what impact they have had at a
macro level.
Table 3. Assessment of current Government schemes
Type of Scheme
Name of Scheme Problem being addressed SMES helped in 12/13
Concern
Equity UK Innovation Investment Fund
Poor supply of risk capital for new tech companies.
44 Lacks scale, only 40% of investments in UK
Equity Enterprise Capital Funds
General lack of equity capital available to SMEs.
149 Weak financial returns pre/post crisis
Equity Business Angel Co-investment Fund
Business angels have reduced capacity to invest.
25 Weak financial returns from previous schemes
Debt Enterprise Finance Guarantee
Lenders risk-averse stance towards SMEs without security.
3,296 Value for money as <1 job created per company
Debt Start-up Loans Start-ups lack financial track record to borrow.
2,419 In early stages, but focused on start-ups
Debt Business Finance Partnership
SMEs overly reliant on traditional high street lenders.
0 Lacks scale to have impact
Source: NAO
Moreover, the NAO is concerned that the vast majority of Government funding (around 70%) is
channelled via the same banking sector that is responsible for the access to finance problems
demonstrated above.
Overcoming banking concentration through competition
UK SME banking is very concentrated and has become more so over the past decade. Currently,
85% of the UK SME market is concentrated in four providers, up from 83% ten years ago.
One measure of concentration in the banking sector is the Herfindahl-Hirschman Index (HHI). The
Office of Fair Trading (OFT) defines a ‘concentrated’ market as one with an HHI index of 1000 and
highly concentrated markets as having an HHI of 2000. The UK has an HHI of 1910.12
The
abandoned Lloyd divestiture would have only lowered the UK’s HHI for SME banking to 1600.13
12 Office of Fair Trading (2010) Review of Barriers to entry, expansion and exit in retail banking. 13 EEF (2012) Finance for Growth: Increasing competition in SME banking.
04 ENHANCING NATIONAL SECURITY
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The Vickers Commission estimated that challenger banks14
increase their market share on average
by 0.34 percentage points each year. Assuming a single new start-up bank is able to increase their
market share at the same rate of 0.34 percentage points of the market per annum, it would take
approximately 30 years for a single bank to gain 10% market share from the top four banks.
This analysis of how long the competitive landscape for SME banking may take to change organically
demonstrates the downside of relying on small scale changes to improve competition – they will take
a long time to deliver results.
Potential Solutions
Actively promoting more competition and diversity in the UK’s banking system must be a priority, but it
will only begin to generate benefits over the longer-run. Banking reform must be complemented by
targeted tax reforms to make the UK a globally competitive for mobile manufacturing investment.
As noted above, the UK banking structure is dominated by large institutions, it does not possess a
well-developed system of regional banks or banking institutions and the ability of SMEs to access
alternative finance is more limited than countries such as the US, Germany and France.
Investing in a state-backed business bank, as suggested by the British Chambers of Commerce and
EEF, is one option for addressing the multiple market failures with the UK’s banking system identified
above, including: the poor provision of finance; increasing regulatory constraints and barriers to entry;
the reliance of current initiatives on the existing banking system; the lack of competition, in particular
in the regions; and the slow organic growth or challenger banks.
Proposals for a model for a new, state-capitalised retail bank that would operate regional and have
the potential for speeding up the process of introducing competition, while maintaining private sector
control and discipline in lending decisions.
EEF’s model for a new retail bank would be publicly capitalised and mandated to lend to SMEs but
otherwise left to operate on a commercial basis. It would receive no on-going government subsidy or
guarantee of its own borrowing.
Government has greater capacity and inclination to introduce a challenger at scale than the private
sector in the short term: overall competition is not a private concern and the government can have
patience for profits from a new bank that private investors may not. Government can also use its
shareholding to block a promising challenger from being taken over by the dominant incumbents.15
14 Banks with a Personal Current Account market share of 5-12%. 15
The level of capitalisation necessary depends on the change in SME banking that is sought. If we want to deliver an increase in the stock of
lending in the medium term to SMEs of £20 billion, and assuming a leverage ratio of 5:1, the new bank or banks would need to be capitalised by a
total of £4bn. In addition there would be costs, likely in the hundreds of millions for setting up the bank. One option is for Government to use the
proceeds from repayable investments to fund innovation or capitalise the regional banks.
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INCREASING ACCESS TO EXPORT MARKETS
Reducing barriers to exports, including improving coordination of overseas missions, streamlining
export controls and simplifying funding for export would boost the UK supply chain’s ability to access
and win overseas customers
The government has recognised the importance of UK exports. The Prime Minister and his senior
cabinet colleagues have been active and willing to publicly support and promote UK exports. This is
particularly important in strategically important sectors like aerospace, defence, space and security,
where many of the faster growing markets we want to engage with remain state controlled, and the
commercial access and relationships we want to develop require strong political relationships.
It is important that future governments, right from the Prime Minister down, continue to take a leading
role in UK export campaigns and fostering the diplomatic relationships essential for commercial
success.
The government, principally through UKTI, offers a number of schemes to support companies seeking
to export. These schemes cover large, medium and small companies. However, we have found that
awareness and use of these schemes amongst many of the companies in our sectors has been low.
Following consultation with ADS members, as well as a survey of their experiences, ADS has made a
number of recommendations:
UKTI should establish a formal mechanism to engage companies in reviewing the value and
performance of export support schemes to develop proposals for reform. Whilst noting that
the schemes are not particular to the defence and security sectors, ADS believes this would
nonetheless ensure that schemes better address real business need and also increase take-
up by companies.
The government should develop a programme of bespoke, in-person briefings to the defence
and security sectors about available support schemes (both in London and around the
country). This should involve not only briefings from UKTI, but briefings from companies with
first-hand experience of using different schemes.
ADS would also note that most UKTI funding to support companies to attend trade missions
or exhibitions is limited to situations where the company can demonstrate a high likelihood of
purchase by a foreign customer. However, companies would find it valuable for funding to be
available for them to visit and understand markets too. Market assessment is a vital business
function.
Boosting the competitiveness
The UK’s SMEs and midcaps are agile innovators and exporters in their own right. Reducing barriers
to exporting, including improving coordination of overseas missions, streamlining export controls and
simplifying funding for exporting would boost the UK supply chain’s ability to access new markets and
win overseas customers, which would in turn strengthen the UK’s global competiveness.
04 ENHANCING NATIONAL SECURITY
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In particular, ADS would recommend addressing the following practical barriers to boost the
competitive edge of SMEs in growing global export markets.
1) Cost and coordination of trade missions
The UKTI Defence and Security Organisation (UKTI DSO) performs a valuable function in identifying
and helping companies pursue a broad range of shorter-term business opportunities through
reporting, trade missions and presenting to visiting delegations. However, companies sometimes do
not understand why the government and trade associations run trade missions to certain countries
(either missions bespoke to the defence and security sectors or as part of wider high value
opportunity visits).
We therefore recommend coordinating a forward plan of defence and security-related trade missions
between ADS, UKTI DSO and the Security Industry Engagement Team (SIET) within the Office for
Security and Counter Terrorism (OSCT) at the Home Office. The government and trade associations
should also provide clearer and more detailed rationales for visits (i.e. improve the initial market
analysis they provide to companies when recommending missions).
The issue of cost variability for missions should also be considered. UKTI currently places a number
of frameworks and contracts with trade associations; an analysis should be undertaken to determine
whether these would offer the best value for money to companies in the security sector compared to
not using frameworks. Furthermore, UKTI’s current frameworks are diverse and should be
standardised. This would ensure that unnecessary financial burdens are not placed on companies
and likely increase levels of interest / participation in missions.
2) Implementing exportability guidance
The Export Control Organisation’s (ECO) rating advisory service, which has been withdrawn, allowed
exporters to obtain a government view of the export control status of their goods before attempting to
export them. Its replacement, the Control List Classification Advice Service, served the same purpose
but was suspended in June 2014.
The withdrawal of the Control List Classification Service informs a broader point about what export
control advice companies can get ahead of investing in countries and applying for export licences:
how can the government and trade associations give companies greater certainty about countries and
the advisability of investing earlier on? An early guidance service would allow more focused
engagement in overseas markets and also encourage companies to make investment in the UK in
order to meet likely customer requirements. As matters stand, more risk-averse exporters might miss
out on lucrative business due to a mistaken perception that an export licence is likely to be refused.
3) Enhancing commercial understanding in government
Increased partnership between government and industry in priority markets should be underpinned by
efforts to develop commercial understanding and expertise within government. Industry already
contributes a secondee to the Security Industry Engagement Team in OSCT and a number of
secondees to UKTI DSO, with more to come under the Defence Growth Partnership. This provides
04 ENHANCING NATIONAL SECURITY
14
the government with useful, first hand insight into industry capabilities and commercial models as well
as knowledge transfer.
Whilst industry secondments can provide additional in-house capacity, they are no substitute for
improving the commercial understanding of relevant officials themselves. Building on the engagement
programmes currently organised by the trade associations for newly appointed British Heads of
Mission and UKTI DSO’s existing briefings for newly appointed defence attaches, a formal
programme of briefings, placements and courses could be developed for officials in UKTI DSO, MOD,
OSCT SIET and the British Intergovernmental Services Authority (BISA).
Continued support for the Growth Partnerships
The Growth Partnerships have identified the need for more targeted approaches to developing export
opportunities. The sense from industry is that what makes a difference is clear identification of
tangible market opportunities that can then be used to inform those businesses best able to meet the
opportunities. Someone that understands the market, and has good contacts and the right expertise,
can make a big difference.
UKTI and DSO are involved and contributing to these approaches and there are examples where they
have responded positively to an idea developed within the Growth Partnerships. However, it can
appear that this is sometimes considered to be at the edge of their responsibilities and would be
improved through greater coordination and a stronger sense of a common agenda across
government.
Strengthening the UK’s global competiveness and growing our global market share through increased
exports are at the heart of the Growth Partnerships. Continued cross-party political support for these
strategies is critical to the UK’s future growth and competitiveness.