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International Wales Agency Should Lead a Renewed Charge

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FSB’s new paper Internationalising Welsh Businesses: International Trade, Export and Investment looks at how SMEs can be supported to take advantage of international opportunities in order to help Welsh businesses adapt and grow in a post-Brexit and post-Covid landscape.

According to the FSB’s 2016 report on SMEs and UK exports ‘Destination Export’:

  • 40% of exporters are start-up businesses.
  • 76% of export destination decisions are driven by a direct approach from local markets – this suggests there is a gap in coordination and scope for impact through governmental international strategy.
  • The EU single market remains the top trade destination for both UK and Welsh small firms and will likely be for some time to come. Welsh SMEs that do export are four times more likely to export to an EU destination than a destination outside the EU.
  • Around one fifth of FSB’s membership in Wales exports, with around 13.5% of our members importing goods or services. Generally, this is in line with the UK average.

Discussion over Wales’ role in the world comes at an incredibly significant time for businesses across the country as we approach the end of the UK’s Brexit transition period and look ahead to a future trading relationship outside of the European Union.

FSB has argued that Welsh Government should set out a clear ambition to grow the number of exporting Welsh firms and task a dedicated agency with delivering on this.

This agency, which FSB has nominally named International Wales, would work alongside other organisations such as the Development Bank of Wales and Business Wales to be part of a strong business landscape in Wales and provide businesses with the architecture that they need to be able to not just survive, but grow and thrive in the future.

International Wales would help SMEs to develop a brand, explore opportunities abroad, make connections and take part in trade missions.

A recent report from the OECD has also made a strong case for a dedicated agency to support regional investment in Wales, which further demonstrates the need for better structures of support for businesses to develop in Wales and beyond.

Ben Francis, FSB Wales Policy Chair, said:

“Wales’ role in the world has never been more important; with Brexit now around the corner Wales’ firms need all the support we can muster in order to take advantage of global trading opportunities.

“We believe that an arms-length body, tasked explicitly with supporting Welsh businesses to break into new markets and exploit new opportunities around the world is a vital way of helping more businesses develop their opportunities. OECD’s recent recommendation adds a compelling dimension to a discussion of what role such an agency might play in developing the Welsh economy and businesses.

“When thinking about how we develop and task an agency, it’s critical that we focus on moving forwards and not focus on the past. Welsh SMEs have faced more challenges this year than at any other time, and with Brexit on the horizon we must urgently focus on how businesses can be empowered and supported to exploit international opportunities.”