Scale-ups target US according to new research
In comparison, just 35% of respondents rated the EU as one of the most attractive markets, compared to 74% before the referendum.
However, the findings suggest that the EU will likely remain an important market for UK business, with respondents rating market size, familiarity and existing networks as key drivers for which markets they choose to export to.
Overall the research finds that almost one-third of scale-ups have already expanded overseas, with a further 51% targeting international growth within the next three years.
David Noon, UK & global Brexit leader for Deloitte, said: �Brexit clearly has not diminished the overseas ambition of the UK�s scale-up community. The question now is where do they look for growth and who do they work with to get there.
�We have seen a significant shift in the markets they are considering. The US, a traditionally strong market operating in the same language as the UK, has seen a surge in interest since the EU referendum.
�Although the scale-up community has shown some sensitivity to the outcome of the EU referendum, the EU will undoubtedly remain an important market for UK business. The factors identified as main considerations for where to expand, including market size, familiarity and existing networks, are unlikely to change as a result of Brexit. In addition, the depreciation of the British Pound against the Euro has made UK exports more competitive.�
Opportunities for collaboration
The survey findings show scale-ups remain highly self-sufficient, despite acknowledging that collaboration with government, trade associations or corporates could bring benefits such as access to broader networks and unfamiliar markets.
Half of respondents (56%) did not seek any form of public or private support to scale-up overseas. For the rest of the scale-up community who did seek support to access new markets, a combination of UK government, trade associations and large businesses were the most appealing options.
Roger Marsh OBE, Chair of Leeds City Region Enterprise Partnership (LEP), commented: �As the country looks to new sources of economic growth following the 2016 vote to leave the EU, it�s clear that innovation and scale-up businesses could hold the key to maintaining the UK�s global competitiveness. The findings of this report by Deloitte are echoed by our City Region�s own experience of trade and HMRC�s analysis which shows that around a third of all City Region exports head to the US, making the country our single largest trading partner.
�In addition, new research conducted by the LEP with the Chambers of Commerce also identified that over a fifth (22%) of exporters are currently planning to expand their markets to include US & Canada, this is up from 19% last year. However despite these growths all findings clearly highlight the remaining importance of European markets businesses still looking at both Western European and wider European markets for growth opportunities.�
Matt Henderson, Head of Deloitte Private in Yorkshire, said: �Innovative scale-ups could provide the impetus that the UK needs to drive growth and boost productivity and it is critical that big businesses and the government work together to help them access the support they need to scale-up at home and abroad. Collaborating with scale-ups can be mutually beneficial: big businesses have strong brands, market access and maturity, while scale-ups have agility, energy and speed to market.�
Despite recognising the benefits, the survey results show a strong perception that collaborating with big business is hard work. Less than 10% of respondents were aware of the benefits of collaborating with corporates, whereas 46% cited drawbacks including the desire to retain control of their identity and product and seeing corporates as competitors. Several respondents also expressed frustration that large businesses often expect them to adhere to onerous and expensive processes.
Henderson said: �The UK has the opportunity to be a world leader in technology and innovation. However, corporates have traditionally been slow to adopt innovation. To remain competitive, this needs to change.
�Deloitte research shows that only 16% of business leaders consider themselves ready to exploit innovative technologies like robotics, cognitive computing and artificial intelligence. In contrast, over two-thirds of scale-ups are already investing in innovative technology to scale their business. Collaboration with scale-ups can help big businesses experiment with innovation in a low cost, low risk way. Likewise, corporates can help scale-ups to develop their products and establish themselves in their markets more quickly than they could alone.�
The US has overtaken the EU to become the most popular market scale-ups - early stage, high potential businesses - say they will target for export growth, according to a survey of 500 UK scale-ups by Deloitte. Fifty two percent of respondents rated the US as their preferred market for overseas expansion, compared to just 21% who said they were targeting the US prior to the EU referendum.Tuesday, October 31, 2017"