small business

QuoteSearcher commissioned a follow up study on small and medium enterprises (SMEs) decision makers and their opinions on exporting in the European Union and worldwide. The original study was a YouGov survey on SME decision makers to understand their opinions on the EU and what effect, in any, a “Brexit” would have on their businesses. One of the key findings from this survey was that medium sized businesses were much more likely to hire staff from outside the UK, while small sized businesses were more Anglo-centric. We learned that when it comes to the EU a large amount of business owners have their reservations, however this one attempted to investigate whether they would be more positive if it they could potentially benefit from financial gain.

The responses from the second survey were much more pro-EU than the initial one, with 31 per cent stating that the EU offers “a lot” of trade opportunity and 64 per cent of respondents citing Europe as the most profitable potential partner to export to. Furthermore, only 7 per cent of respondents said “none at all” when asked how much trade opportunity the EU provides.

When asked about worldwide exports respondents were just as positive, with 37 per cent and 41 per cent stating that worldwide exports are “very important” or “fairly important” to UK SMEs respectively.  There were some splits in the results however, one again between small and medium sized enterprises as was the case in the initial study.

Among decision makers from small enterprises, 20 per cent said they “don’t know” how much, if any, trade opportunity the EU currently offers UK-based SMEs.  In comparison, only 8 per cent of medium-sized enterprises had the same answer. Furthermore, 39 per cent of respondents from medium-sized enterprises said the EU offers “a lot” of trade opportunity compared to 29 per cent of respondents from small-sized enterprises.

Figure 1. How much trade opportunity does the EU currently offer UK-based SMEs?

SME Brexit survey

Source: QuoteSearcher/YouGov Survey

Speaking on these findings, Professor Simon Down, Deputy Dean for Research and Enterprise at The Lord Ashcroft Business School, Anglia Ruskin University, said: “From this study we can see evidence that the more mature and experienced the respondent, the more likely it is that they’ll see Europe as a positive environment for exporting.  In the previous study we saw that opinions of SME decision makers on hiring staff outside the UK were generally more negative, however when it comes to exporting in the EU and even worldwide they are more positive.”

“However, exporting is generally not as relevant for those that are in their first year of trading which is understandable. When these SMEs expand though it’s likely this will change. Bigger companies tend to have more positive attitudes towards exporting in Europe.  This study shows us the head, before we saw the heart. The reality is most companies will go where the money is – however this doesn’t mean they don’t have contradictory personal political views.”

Changing SMEs’ perceptions of the EU

For a while now, pro-EU organisations have attempted to convince businesses to stay within the EU by reminding them of the benefits trade can provide to both them and the UK economy as a whole.  In fact, earlier this year the government launched a new campaign called Exporting is Great, with the aim to match businesses in the UK with those around the world.

However, our survey shows that just 7 per cent of businesses are likely to take part in this campaign, with 69 per cent of respondents saying that they had never heard of it before. So would SMEs be more likely to vote to stay in the EU if they knew more about the benefits of exporting? “Probably yes,” said Professor Down, “If the government’s Exporting is Great campaign was more successful, there may well be a greater willingness from SME decision makers to think about staying within the EU.

“The previous study showed us that politically and ideologically, most SME decision makers are more conservative, but when it comes to making money for their businesses they may well want to stay in the EU. There is a considerable amount of information about this out there, for example the CBI have come out strongly to stay in the EU, whilst the Federation of Small Businesses and other similar lobbying organisations are saying the same.”

“If the government really deepens their campaign in terms of the benefits of staying in the EU and potentially even subsidise the cost of businesses exporting to not just Europe but also the rest of the world, one might think it could change.  Our government wants to stay in Europe, however the big question is whether Cameron can persuade his colleagues to do the same.”

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Notes:

  • This post gives the views of its authors, not the position of LSE Business Review or the London School of Economics.
  • Featured image credit: Coronation Street Hardware Store, Wikimedia Commons

Photo ofBen MooreBen Moore is the General Manager of QuoteSearcher, where he has spent the past seven years working with household names including Swinton, Brightside and Towergate. Ben’s area of expertise includes SMEs. He merges traditional brokerage with modern technology to develop new industry standards.