In our final look at the Social Market Foundation’s recent report on how e-commerce can help boost the number of SMEs exporting, we hone in on its recommendation to support female-led SMEs to export.
‘Small Business, Big World’, was commissioned by the E-Commerce Trade Commission (E-CTC), which the Chartered Institute of Export & International Trade convened in June 2023 and currently chairs. The report suggests that, if more female-led SMEs were to sell internationally, it would mean a sizable increase to overall export revenue.
Insights from Canadian research, as well as models for new forms of support for female entrepreneurs, were touted a possible route to increasing UK export numbers.
Rationale
The report’s author, Richard Hyde, referred to a 2020 research paper which suggested that only 7% of the UK’s female-led SMEs exported, in contrast to Canada where the number was over 10%.
In addition, the overall proportion of female-led SMEs in the UK is lower than Canada’s 19%. The report suggests that, “if the UK were to move closer to Canada’s position, it would likely see another 35,000 female-led firms start exporting”.
This is a significant figure, meeting half of the E-CTC’s target to get 70,000 SME exporting – were this many non-exporting small firms to take up selling goods overseas, it could boost the UK economy by £9.3bn per year.
Challenges
The SMF report found that 86% of female CEOs in e-commerce SMEs experienced at least one “additional challenge” which impacted their business activities.
These included “fear of failure” holding them back (39%) as well as juggling family obligations (39%) and difficulty accessing finance (34%).
Certain characteristics of typical female-led small businesses contributed to the lower prevalence of exports. They tend to be “disproportionately” represented in low-exporting sectors such as “education, health, arts and entertainment, personal services (e.g. hairdressing and beauty) and accommodation and food”.
Female CEOs of small firms were also more likely to raise the issue of finding the resources to handle the additional administrational burdens created by exporting. One participant noted:
“There is just so much paperwork. For a small business, if you get it wrong, it will have cost implications, while larger businesses have more resources that they can commit to figuring things out”.
Others reported seeing exporting as detracting from supporting core business operations:
“It takes our time away from making our products and business development.”
Policy suggestions
The report positioned trade tech as a useful tool for alleviating some of the challenges faced by female-led SMEs, "negat[ing] the size and productivity obstacles to exporting".
E-commerce platforms in particular were already being utilised and positively received by female CEOs, with many praising them as optimal for selling abroad when compared to operating a company website.
Research into Canadian female-led firms also found that, “if [these firms] engaged in e-commerce, the likelihood that they would internationalise, i.e. begin exporting, increased fourfold".
Lessons can also be learned from Canada regarding their support for female-led business. The Women Exporters Programme, which combines webinars, mentorship, advisors and credits for shipping discounts for partnered organisation, was highlighted as a model the UK could replicate.
Within existing provision, such as the Department for Business and Trade’s Export Champions and Export Advisors, it was suggested that more could be done to target female-led SMEs.
