Scotland’s export growth plan, A Trading Nation (ATN) was published in 2019. It recognised that access to international markets and international competition drives business performance, innovation, and productivity growth, thus stimulating economic growth, generating job opportunities and higher living standards, as well as the tax receipts critical for the delivery of public services.
The strategy, utilising evidence on key geographical markets, sectors, and the characteristics of exporting firms, featured a set of actions for the Scottish Government and partners to help reach a target to increase Scotland’s international exports as a share of GDP from 20% to 25% by 2029. It also pledged to monitor, evaluate and adjust these actions.
To this end, a working group was established comprising the Scottish Government and its key export support delivery partners including the Scottish Chambers of Commerce. Analysts in other parts of the Scottish Government, the Department for Business and Trade, Wales and Northern Ireland, as well as subject experts in academia, were consulted. The framework was deliberately designed to provide a holistic assessment of: the impact of support on business outcomes; what support works; how the impacts are achieved; and lessons on delivery.
A research team from the Enterprise Research Centre and the Centre for Business Prosperity Aston Business School in Birmingham were commissioned to undertake an evaluation of Team Scotland’s export promotion support on this basis and helped further develop the approach.
Firms supported between 2018 and 2021 were within scope for evaluation.
The key aim of the Scottish Government with regards to international trade is to increase exports to 25% of the country’s GDP by 2029, i.e., by approximately £25 billion.
Of the 346,000 Scottish business, 11,000 deem themselves to be exporters and 60% of these are members of a Chamber of Commerce and throughout the UK last year the network facilitated £16 billion worth of trade, helping to ensure the smooth passage of UK goods across international borders.
In the financial years 2018/19 – 2020/21, the Scottish Government delivery partners provided export and wider business development support to 3,053 businesses. Of these, 2,329 opted into the beneficiary evaluation survey, which received 463 responses and a number of in-depth interviews were carried out.
What did we find?
Nearly all responding firms are small to medium enterprises (SMEs) with on average 21 employees and £3.1m turnover and had been operating for 20 years, representing a variety of business sectors with about a third being in manufacturing.
Analysis conducted by the Scottish Government showed that Scotland’s trade in goods with the EU was an estimated 12% lower (or £2.3 billion in cash terms) in 2021 as a result of EU exit. Both beneficiary and nonbeneficiary survey respondents noted that their export performance was hindered by Brexit and the pandemic, with 84% and 87% reporting experiencing challenges with exporting goods and/or services respectively. The significant twin impacts on exporters of these historically significant factors must be borne in mind when interpreting results. Despite these headwinds, evaluation evidence shows over 30%3 additionality of supported export companies in Scotland.
Analysis showed that 60% of beneficiary respondents were current exporters (had exported in the past 12 months). Of them, 49% exported goods, 30% exported services and 21% exported both. In 2021, firms’ exports were valued, on average, at around £2.5m and the average firm had been exporting for 14 years. Nearly two-thirds (65%) of respondents exported to an ATN market.
Of the 40% which had not exported in the previous 12 months, the majority, 73%, had never exported (or were yet to), and 27% had last exported in 2020-21.
Findings show that export support has led to an increase in firms’ value of exports of 140%, so that, if a firm reported international sales of £2.4m, the evidence is that without support, only £1m would have been achieved. Positive impacts were found across all yearly cohorts, and this increased over time.
Businesses receiving multiple ACE (Awareness, Capability and Exploitation) support types were more likely to achieves export sales, export new product categories and anticipate export sales in the future
• The higher the number of supports accessed by businesses, the higher the impacts
• A business in receipt of support from multiple business partners suggested higher impacts in terms of jobs created and/or safeguarded, and also process innovation
Over the evaluation period, data shows that the Scottish Government and its delivery partners undertook a broad range of activities of support to over 3,500 companies, who received over 10,000 interventions. These international projects resulted in £5.0bn worth of planned international sales.
The evidence from the reviews shows that in the period of the export support:
In the overall export journey, consultees highlighted that access to market know-how and expertise made a difference to increasing international sales.
Projects that received a mix of advisory and financial support had a significantly higher average planned international sales figure than those that received either support type exclusively.
Resourcing/capacity was identified as the top barrier across all exporters. This was followed by skills and market intelligence and funding/investment.
Projects lasting less than a year had the highest average planned international sales
Planned international sales were higher for non-SMEs relative to SMEs.
The evaluation shows that Scotland’s approach to export support has a positive impact on export sales. This was not only born out in terms of additionality of the support, but also wider business benefits such as product and process development and job creation. The evaluation identified high levels of satisfaction with the support offered form the perspective of business, as well as delivery practitioners, the majority of which felt satisfied with the current level and targeting of support.
Seona Shand, Director of International Trade, said: “Reading the findings from the Scottish Government’s Export Evaluation Report shows the decisive move towards global economic empowerment for businesses in Scotland, thanks to the support of a number of agencies, including the Scottish Chambers of Commerce and its network.
“This comprehensive assessment reaffirms our commitment to fostering international growth and resilience in our export support. The invaluable insights gained from this report will not only guide our strategic decision-making but also help us elevate Scotland’s position on the global stage, unlocking new opportunities and fortifying our role in shaping the future of international trade for Scotland in partnership with the Scottish Government.”
www.gov.scot/publications/team-scotlands-export-promotion-support-evaluation/documents/
