Internationalisation

Businesses who trade internationally tend to be more innovative, productive and competitive.

In a nutshell

As the world becomes more connected through trade and communications, international markets offer real opportunities for Scottish businesses to grow.  Access to international markets drives business performance and scale, while facing international competition drives business innovation and productivity growth.

What's the business benefit?

Overseas markets offer an opportunity to increase sales to a much wider customer base. Exporting can be profitable for businesses of all sizes and lead to new job opportunities.

Scottish businesses trading internationally have high productivity rates and are often more competitive than their peers. This stimulates innovation and increased growth, as companies are exposed to new ideas and new markets. Research has found that small and medium sized businesses which export grow more than twice as fast as those that do not, and perform better financially.

Companies that start to sell overseas can improve their performance by ‘learning from exporting’. For example, research shows exporting can boost company productivity levels by over 15%.

For many companies, overseas trade also creates an international feel to the business, opening up additional revenue streams and driving new skills within the business.

Businesses that increase their international competitiveness and diversify their customer base are more likely to have longer term security and sustained growth.

Why is this included in the Scottish Business Pledge?

Scotland produces some of the finest food, drink and textiles in the world. We also lead the way in sectors such as engineering, renewables, oil and gas, digital services and content and life sciences. And Scotland is a key destination for many international visitors and students.

The ability of Scottish businesses to internationalise depends on a range of factors, including:

  • their ambition to grow and to innovate;
  • their ability to adapt to rapid technological change;
  • how they respond to changing global markets, competition and customer needs and employ people and talent with the right attitudes and global outlook.

Many businesses in Scotland have already taken steps to pursue international business opportunities, for example: selling overseas or attracting international visitors to Scotland; collaborating with international partners or contributing to the delivery of EU programmes and initiatives; participating in global value chains; securing international finance; or developing the international business and language skills of their workforce.

While Scotland’s exports have increased in value over the past 20 years, they have remained broadly static as a proportion of the economy, but many similar sized nations have improved.

Our competitors are finding ways to encourage their companies to export and win contracts that many of our firms could and should be winning.

Ultimately, this means the additional wealth that more export orders could bring in the form of profits, jobs, investment and higher tax receipts, are going overseas rather than coming here. We want to do something about this.

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Why is this good for Scotland?

Scotland’s economic success will increasingly be realised through strengthening our links with the global economy and the opportunities this subsequently brings for increasing international trade and the number of international visitors to Scotland – attracting overseas finance, sharing skills, expertise and collaborating internationally.

Many Scottish companies already enjoy considerable success overseas. Scottish international exports in 2017 (excluding oil and gas) were estimated at £32.4 billion, an increase of £1.9 billion since 2016.

We want to internationalise Scotland’s economy by helping Scottish companies export more into more markets and grow exports as a proportion of our GDP from 20 to 25% by 2029.

Bringing people into Scotland, whether for leisure or business tourism, is also important in growing our economy. We need to encourage them to stay longer and spend more by improving the quality and value for money of what Scotland has to offer its visitors.

What should I do now?

Tell us about the international ambitions you plan to progress – now or in the future. Let us know about action you’re taking to generate new or increased international business or to expand into new markets, for example by researching new markets or taking steps to find new business leads and networks overseas.

If you’re not yet at this stage, you may still be able to demonstrate your Business Pledge commitment if you can demonstrate the steps you have taken to:

  • research information on international opportunities and the benefits of these for the business;
  • develop an understanding of the practicalities of exporting;
  • learn about demand for Scottish exports by reading A Trading Nation;
  • seek expert advice on exporting from our enterprise agencies;
  • prepare a business and export plan;
  • understand the value of digital connectivity in marketing and working overseas;
  • undertake work within the tourism sector, to create quality products to attract inbound visitors.

What help is available if I can't make the commitment right now?

Scottish Enterprise and Highlands and Islands Enterprise understand the nature and complexity of the challenges faced by companies seeking to internationalise. They can offer free practical advice and support to guide you through every step, from researching potential markets, finding the best routes to market and overcoming challenges to accessing finance. You can ask a trade expert about doing business overseas on the Scottish Enterprise website.

As the international arm of Scottish Enterprise and Highlands and Islands Enterprise, Scottish Development International has staff in 30 overseas offices across 20 different countries. You can find a range of helpful information on their website.

If your business is involved in the tourism sector, VisitScotland, the national tourism body, can provide practical assistance on understanding overseas markets and their expectations, and marketing your product in these areas. Scottish Enterprise, Highlands and Islands Enterprise and VisitScotland support Tourism Intelligence Scotland which provides information for businesses.

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