international business strategies, barriers and awareness survey (2010) - full report

8/6/2019 International Business Strategies, Barriers and Awareness Survey (2010) - Full Report

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CONTENTS

1. Executive Summary............................................................................................................i

1.1 Introduction ........................................................................................................................i

1.2 Summary Results................................................................................................................i

2. INTRODUCTION.............................................................................................................1

2.1 Objectives..........................................................................................................................1

3. METHODOLOGY............................................................................................................3

3.1 Introduction .......................................................................................................................3

3.2 Sample ...............................................................................................................................3

3.3 Sample Design...................................................................................................................3

3.4 Questionnaire Design ........................................................................................................4

3.5 Fieldwork...........................................................................................................................5

3.6 Weighting ..........................................................................................................................5

3.7 Analysis .............................................................................................................................63.8 Statistical Significance ......................................................................................................6

4. COMPANY PROFILE......................................................................................................7

4.1 Age of Business.................................................................................................................7

4.2 Number of Employees.......................................................................................................8

4.3 Company Turnover..........................................................................................................10

4.4 Industry Sector.................................................................................................................12

4.5 Company Ownership.......................................................................................................15

4.6 Benefits of Selling into Overseas Markets ......................................................................17

4.7 Experience of Doing Business Overseas: Self-assessment .............................................19

4.8 Overseas Experience: Number of Years Doing Business Overseas................................214.9 Experience: Born Globals................................................................................................23

4.10 Experience: Proportion of Turnover Accounted for by Overseas Sales..........................24

4.11 Experience: Number of Markets .....................................................................................26

4.12 Number of Regions .........................................................................................................29

4.13 Benefits of Expanding the Number of Overseas Markets in which a firm operates.......33

4.14 Innovative Companies.....................................................................................................36

4.15 IP Active Companies.......................................................................................................39

4.16 Young Technology Intensive Firms ................................................................................40

4.17 Past Growth (Turnover)...................................................................................................41

4.18 Past Growth (Number of Markets)..................................................................................42

4.19 Past Growth: Employment ..............................................................................................444.20 Future Growth .................................................................................................................48

4.21 Growth ASBS Definition .............................................................................................51

4.22 Growth OECD Definition ...............................................................................................53

4.23 Business Planning............................................................................................................55

5. MODES OF INTERNATIONALISATION ...................................................................60

5.1 Number of Modes............................................................................................................64

6. DRIVERS OF GEOGRAPHICAL FOCUS....................................................................66

6.1 Market Perceptions..........................................................................................................70

6.2 Market Perceptions: Summary ........................................................................................75

7. BARRIERS .....................................................................................................................79


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8. OPPORTUNITIES IN EMERGING AND FAST GROWING......................................95

8.1 Opportunities in Emerging and Fast Growing Markets ..................................................95

9. ECONOMIC CLIMATE.................................................................................................99

9.1 Downturn in UK, US and European Markets..................................................................99

9.2 Economic Growth..........................................................................................................1029.3 Impact of the Decline in the Value of Sterling..............................................................105

9.4 Usage of Currencies ......................................................................................................109

9.5 Effect of the decline in Sterling on costs.......................................................................111

9.6 Overall effect of the decline in the value of sterling .....................................................112

9.7 Export Credit Insurance.................................................................................................114

9.8 Letters of Credit.............................................................................................................117

9.9 Accessing Finance.........................................................................................................120

10. AWARENESS AND USAGE OF UKTI......................................................................129

10.1 Awareness of UKTI Trade Support Services................................................................129

10.2 Business Link ................................................................................................................133


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Accent UKTI Evaluation Final Report November 2010.docTM30.04.10 Page i of vi

1. EXECUTI VE SUMM ARY

1.1 In t roduc t ion

This research gathers evidence about trends in UK businesses international business

strategies; barriers hindering such business, and associated needs for external help aswell as awareness of, and propensity to use, UKTI; and related issues.

In terms of the specific research aims, the study was required to provide robust evidence

to:

identify UK business use of different modes of internationalisation and overseas

market entry, including among young innovation and technology intensive firms

identify drivers of geographical focus, including awareness of, and potential interest

in, the emerging and high growth markets which were identified in UKTIs five year

strategy, published in 2006

understand the barriers encountered by UK businesses in seeking to develop

overseas business, both for new exporters and for companies seeking to enter new

markets

identify business needs for external help to overcome barriers and to address

knowledge and skill needs associated with developing overseas business

identify awareness and use of UKTI support

understand the role of international market diversification in business development

strategies, including its effects on: revenue growth and resilience, profitability, and

return on investment in new product development

identify and assess the extent to which credit conditions may be impacting on firms

international business development, including related issues such as access to trade

credit insurance and letters of credit.

This report outlines the key findings from this study.

1.2 Summary Resul t s

Industry Sector

All companies were asked to identify the main activity of their business. The main

activity for just over six in ten of the surveyed companies was manufacturing.

These self-reported main activities were simplified into four sectors namely services,

construction, production and primary. In the 2008 survey, roughly similar proportions of

the companies were either classified as production or services. In the 2009 survey, these

proportions had changed considerably with approximately two thirds of the sample inthe production, and a third in the services sector. This should be taken into consideration

when interpreting the data. In this 2009 survey whilst the primary and construction


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Accent UKTI Evaluation Final Report November 2010.docTM30.04.10 Page ii of vi

industry sectors are still a minority there were more of these companies than in the 2008

survey.

Table 1: Simplified company sector6-10 years 10+ years

TotalUp to 5

years 0 - 49 50 - 99 100 + 0 - 49 50 99 100 +

Base 911 236 249 27 37 196 58 108Total

100% 100% 100% 100% 100% 100% 100% 100%

Services 32% 36% 41% 22% 22% 27% 12% 24%

Construction 3% 3% 2% 0% 0% 2% 0% 6%

Production 62% 56% 54% 78% 76% 67% 84% 66%

Primary 4% 5% 3% 0% 3% 4% 3% 5%

Modes of Internationalisation

All respondents were asked to indicate which overseas business activities their firm had

been involved in over the last 5 years. These modes included selling directly tobusinesses or individuals abroad, selling to businesses or individuals abroad through

agents or distributors, licensing or franchising overseas, or other contractual

arrangements (including joint ventures) and operating their own overseas site or office.

Those companies not currently involved in any of these listed overseas activities were

asked to indicate whether or not they were seriously considering starting to conduct

overseas business via any of these routes in the next year. In order to be included in this

survey, respondents had to respond positively to this question. This group (the

considerers) were then also asked to indicate which types of overseas business

activities they were planning to become involved in.

The majority of companies were selling directly abroad or via agents and distributors.The level of selling directly abroad was identical to the 2008 survey, whilst the level of

selling through agents and distributors (67%) was much higher than in the 2008 survey

(29%). Furthermore, the level of importing was much higher in the 2009 survey (76%)

than identified in the 2008 survey (48%). Selling direct was more typically utilised by

older companies.

Table 2: Simplified mode of internationalisation6-10 years 10+ years

TotalUp to 5

years 0 - 49 50 - 99 100 + 0 - 49 50 99 100 +

911 236 249 27 37 196 58 108Total

100% 100% 100% 100% 100% 100% 100% 100%Direct sales 90% 87% 88% 93% 89% 92% 91% 94%

Via agents/distributors 67% 58% 57% 78% 81% 74% 74% 81%

Contractual

arrangements (licensing,

franchising and joint

ventures)

15% 11% 13% 7% 32% 12% 22% 30%

Overseas sites 27% 23% 17% 30% 46% 20% 43% 57%

Importing 76% 69% 76% 81% 78% 77% 90% 81%


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Accent UKTI Evaluation Final Report November 2010.docTM30.04.10 Page iii of vi

Drivers of Geographical Focus

The table below shows the proportions of companies scoring against each of eight

summary categories of drivers of geographical focus.

Nearly three quarters of companies indicated that the measure of network andserendipity played a vital role when companies conduct business overseas which

strongly indicates the prominent role played by existing contacts and the element of

chance. Furthermore, language and culture, practicalities, contacts and

independent analysis are clearly important factors when considering a new market.

Overall, these results are consistent with the 2008 survey.

Table 3: Summary drivers of geographical focus6-10 years 10+ years

TotalUp to 5

years 0 - 49 50 - 99 100 + 0 - 49 50 99 100 +

Base 911 236 249 27 37 196 58 108Total

100% 100% 100% 100% 100% 100% 100% 100%Networks and

serendipity74% 77% 77% 81% 76% 74% 66% 65%

Independent analysis 55% 51% 55% 67% 59% 50% 60% 62%

Solely reactive 13% 14% 13% 15% 5% 18% 10% 5%

Not significantly drivenby any of these factors

13% 14% 11% 4% 8% 14% 14% 16%

Contacts 13% 12% 14% 11% 11% 15% 7% 18%

Practicalities 14% 13% 17% 7% 14% 13% 14% 14%

Language and culture 71% 75% 75% 85% 73% 66% 71% 63%

Risk and IP 36% 40% 39% 44% 38% 30% 36% 29%

Resources 66% 91% 67% 0% 33% 75% 40% 56%

Not significantly drivenby any of these factors

16% 14% 14% 7% 11% 19% 16% 25%

Barriers

Following difficulties encountered in previous studies in measuring barriers through

direct questioning techniques, a projective questioning technique was employed for both

this and the 2008 survey. This technique attempted to circumvent issues relating to the

reluctance of firms to acknowledge barriers by asking them to talk about issues that

similar firms would face rather than necessarily their own company. The table below

shows the proportions of firms scoring against each of six summary categories of

barriers as well as the proportion scoring against at least one of these categories. Herethe proportion indicating at least one barrier (91%) is much higher than in the 2008

survey where nearly eight in ten companies (79%) specified at least one barrier.

As has been the case in previous studies, fixed cost barriers, contacts barriers and legal

and regulatory barriers were highlighted as being amongst the most important barriers to

conducting international business.


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Accent UKTI Evaluation Final Report November 2010.docTM30.04.10 Page iv of vi

Table 4: Barriers to conducting overseas business% scoring 4 or 5 6-10 years 10+ years

on a scale from 1

to 5 where 1 is

very easy and 5

is very difficult

TotalUp to 5

years 0 49 50 - 99 100 + 0 - 49 50 - 99 100 +

Base 911 236 249 27 37 196 58 108

Total 100% 100% 100% 100% 100% 100% 100% 100%

Legal and regulatory 58% 55% 48% 59% 73% 63% 62% 70%

Contacts 61% 56% 60% 67% 62% 64% 66% 66%

Information 21% 18% 22% 22% 22% 27% 9% 21%

Fixed costs 78% 72% 76% 89% 86% 79% 86% 83%

Language and cultural 37% 35% 34% 30% 43% 38% 36% 44%

Bias 28% 25% 29% 41% 22% 23% 40% 32%

At least one barrier 91% 86% 90% 96% 95% 94% 97% 94%

No significant barriers 8% 13% 11% 4% 3% 5% 3% 6%

Number of Markets

Six in ten (60%) of the surveyed companies were in 11 or more markets. This is twice

the proportion in the 2008 survey for which the equivalent figure was 30%. This

indicates that the 2009 sample contains firms with more export experience than that of

2008. The number of markets in which a firm operates tends to increase with age.

Table 5: Number of Markets6-10 years 10+ years

TotalUp to 5

years 0 - 49 50 - 99 100 + 0 - 49 50 - 99 100 +

911 236 249 27 37 196 58 108Total

100% 100% 100% 100% 100% 100% 100% 100%

Considerers 1% 3% 0% 0% 0% 0% 0% 1%

None1 0% 0% 0% 0% 0% 1% 0% 0%

One country 3% 6% 4% 0% 0% 0% 0% 0%

2-5 countries 15% 24% 21% 11% 11% 10% 5% 1%

6-10 countries 21% 25% 27% 19% 22% 19% 16% 8%

11-20 countries 22% 17% 25% 30% 11% 28% 28% 14%

21-50 countries 26% 17% 19% 19% 43% 34% 31% 42%

More than 50 countries 12% 8% 4% 22% 14% 9% 21% 34%

Dont know 0% 1% 0% 0% 0% 0% 0% 0%

Number of regions

The following table summarises the number of regions of the world that these

businesses were operating in. This table illustrates that nearly three quarters of

companies (73%) were conducting business in four or more regions. This is indicative

of the sample firms being experienced exporters and having geographically diversified

export markets.

1 Two respondents stated they had not done business in any market over the last five years despite

previously stating that they had sold directly to businesses or individuals abroad and had imported goods

or services over the last five years.


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Accent UKTI Evaluation Final Report November 2010.docTM30.04.10 Page v of vi

Table 6: Number of regions6-10 years 10+ years

TotalUp to 5years 0 - 49 50 - 99 100 + 0 - 49 50 - 99 100 +

Base 911 236 249 27 37 196 58 108Total

100% 100% 100% 100% 100% 100% 100% 100%

None2 0% 0% 0% 0% 3% 1% 0% 1%

1 8% 14% 14% 0% 0% 3% 0% 1%

2 7% 11% 8% 7% 3% 6% 5% 0%

3 11% 12% 18% 0% 8% 10% 5% 3%

4 or more 73% 62% 60% 93% 86% 81% 90% 95%

Opportunities in Emerging and Fast Growing Markets

All companies were asked to indicate the regions of the world in which their business

was active. They were then given a list of emerging markets and for each market in turn

they were asked whether they saw it as being a good opportunity for their company

over the next 2 years, a possible opportunity, unlikely to be an opportunity oralready doing business there.

A comparison of the 2008 and 2009 survey reveals that seven in ten companies (70%)

in the 2009 survey are already in these emerging markets, compared to almost half

(45%) in 2008. The level of unlikely market opportunities in the 2009 survey (6%)

was also half the level that it was in the 2008 survey (12%).

These results are unlikely to represent such a large increase in the number of firms

entering emerging markets. The apparent increase is likely to be driven by the higher

proportion of UKTI users in the 2009 sample (65% vs 35% in the 2008 sample) and a

much higher proportion of firms in the 2009 sample which are already in over 25markets, as well as a higher proportion in the manufacturing sector. Analysis of the

2008 survey indicated that a higher proportion of firms were already in emerging

markets if they were users of UKTI, or if they were in the manufacturing sector.

Table 7: Summary of the opportunities in the emerging and fast growing markets6-10 years 10+ years

TotalUp to 5

years 0 - 49 50 - 99 100 + 0 - 49 50 - 99 100 +

Base 911 236 249 27 37 196 58 108Total

100% 100% 100% 100% 100% 100% 100% 100%

Already in 70% 65% 59% 74% 73% 79% 76% 82%

Good opportunity 12% 10% 14% 15% 14% 10% 17% 11%Possible opportunity 12% 15% 16% 0% 14% 8% 7% 5%

Unlikely 6% 9% 11% 7% 0% 3% 0% 2%

Don't know 0% 0% 0% 4% 0% 0% 0% 0%

The following table summarises for each country the perceived strength of opportunity

available, with Saudi Arabia/UAE considered the best opportunity.

2 Four respondents stated they had not done business in any regions despite previously stating that they

had sold directly to businesses or individuals abroad and had imported goods or services over the last five

years. They were not classified as considerers.


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Accent UKTI Evaluation Final Report November 2010.docTM30.04.10 Page vi of vi

Table 8: Summary of the opportunities in the emerging and fast growing markets bycountry

Total Russia TurkeySouth

Africa

Saudi

Arabia/

United

Arab

Emirates

Brazil Mexico China India

Base 911 911 911 911 911 911 911 911 911Total100% 100% 100% 100% 100% 100% 100% 100% 100%

Already in 70% 26% 28% 32% 42% 18% 15% 33% 32%

Good opportunity 12% 9% 9% 9% 14% 8% 7% 9% 12%

Possible opportunity 12% 26% 25% 24% 19% 25% 21% 15% 21%

Unlikely 6% 37% 37% 34% 24% 47% 55% 43% 34%

Don't know 0% 1% 1% 1% 1% 2% 3% 1% 1%

Economic Situation

All companies who were currently trading were asked to indicate whether their business

had been negatively affected by the downturn in the USA, UK and European marketsover the last year.

Overall companies were more likely to feel negatively affected by the economic

downturn in the UK and USA markets than in the European markets, with companies

over ten years of age most likely to feel the effects of the economic downturn in these

markets.

The proportion of firms reporting being negatively impacted by the economic downturn

in the UK and USA is somewhat higher (69%) than that reported in the 2008 survey

(42%). While this suggests that more firms have been affected by the downturn in the

intervening period between surveys (July-August 2008 to January-March 2009), thisdifference may partly be driven by the higher proportion of manufacturing firms in the

2009 sample.

Table 9: Impact of economic downturn in the UK, USA and Europe6-10 years 10+ years

TotalUp to 5

years 0 49 50 99 100 + 0 - 49 50 - 99 100 +

In your opinion, has your business been negatively affected by the downturn in the US or UK markets over the last year?

Base 911 236 249 27 37 196 58 108UK and USA

100% 100% 100% 100% 100% 100% 100% 100%

Yes 69% 67% 67% 74% 73% 68% 74% 76%

No 29% 30% 32% 26% 24% 30% 26% 22%Dont know 2% 3% 1% 0% 3% 3% 0% 2%

Again in your opinion, has your business been negatively affected by the downturn in the European Markets over the last year?Base 911 236 249 27 37 196 58 108

Europe 100% 100% 100% 100% 100% 100% 100% 100%

Yes 60% 57% 55% 70% 70% 60% 66% 69%

No 38% 41% 43% 30% 27% 39% 33% 30%

Dont know 2% 3% 1% 0% 3% 1% 2% 2%


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Accent UKTI Evaluation Final Report November 2010.docTM30.04.10 Page vii of vi

UKTI Awareness and Usage

All companies were asked a series of questions to ascertain their level of awareness of

UKTI and a selection of UKTI services. Those aware of UKTI or of any of its services

were then asked to indicate whether they had actually used any of these services. Both

awareness and usage of UKTI services are based on a positive response to any of theUKTI services and not necessarily solely UKTI.

Awareness of UKTI services does appear to vary with both company age and size with

older and larger companies more likely to be aware of UKTI services. Most respondents

were aware of UKTI itself (79%) with the commercial services provided by embassies

overseas known by nearly three quarters (71%) of companies. This level of awareness is

much higher than in the previous survey when the comparable figures for awareness of

UKTI and the commercial services provided by embassies overseas were known by

51% and 55% respectively. Rather than indicating a significant increase in awareness,

this result is likely to be driven by the much higher proportion of users of UKTI services

in the 2009 sample (68%) compared to that of 2008 (35%).

Table 10: Awareness of UKTI services6-10 years 10+ years

TotalUp to 5

years 0 - 49 50 - 99 100 + 0 - 49 50 - 99 100 +

Base 911 236 249 27 37 196 58 108

100% 100% 100% 100% 100% 100% 100% 100%

UKTI 79% 73% 75% 74% 81% 86% 86% 90%

Commercial services provided

by embassies overseas71% 61% 63% 81% 65% 85% 76% 88%

The international Trade

Advisors based in Business

Links

60% 53% 56% 67% 59% 66% 66% 72%

Passport to Export 41% 34% 39% 48% 35% 49% 38% 45%

The Export Marketing

Research Scheme (EMRS)31% 25% 26% 44% 38% 33% 31% 44%

Export Communication

Reviews (ECR)14% 12% 16% 11% 8% 18% 4% 14%

The Tradeshow Access

Programme (TAP)37% 31% 35% 56% 35% 39% 38% 46%

The Overseas marketing

Information Service (OMIS)41% 37% 34% 48% 30% 45% 47% 56%

Awareness of UKTI or at least

one UKTI service92% 88% 89% 96% 92% 97% 97% 100%

UKTI services had been used by the majority of the survey respondents (68%) with

about 70% of these recognising that UKTI provided the service. Of the individualservices used, the commercial services provided by embassies overseas (45%) were the

most commonly used among the sample firms.


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Accent UKTI Evaluation Final Report November 2010.docTM30.04.10 Page viii of vi

Table 11: Usage of UKTI services6-10 years 10+ years

TotalUp to 5

years 0 - 49 50 - 99 100 + 0 - 49 50 - 99 100 +

Base 911 236 249 27 37 196 58 108

100% 100% 100% 100% 100% 100% 100% 100%

UKTI 48% 39% 41% 44% 46% 56% 60% 67%

Commercial services provided

by embassies overseas45% 34% 36% 41% 41% 54% 59% 67%

The international Trade

Advisors based in Business

Links

36% 28% 31% 41% 32% 42% 38% 48%

Passport to Export 15% 13% 19% 11% 5% 20% 3% 14%

The Export Marketing

Research Scheme (EMRS)12% 9% 7% 19% 19% 14% 16% 17%

Export Communication

Reviews (ECR)5% 2% 4% 7% 3% 7% 2% 9%

The Tradeshow Access

Programme (TAP)16% 11% 12% 22% 14% 19% 22% 23%

The Overseas Marketing

Information Service (OMIS)19% 14% 13% 19% 16% 22% 29% 33%

Usage of UKTI or at least oneUKTI service

68% 57% 59% 67% 65% 79% 79% 89%


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2. INTRODUCTION

UK Trade & Investment (UKTI) commissioned this research as the second wave of an

annual survey to gather evidence about trends in UK businesses international business

strategies; barriers hindering such businesses to internationalise, and associated needs

for external help; awareness of, and propensity to use UKTI; and related issues. The

first wave of the survey was carried out during late 2008, replacing a former annual

UKTI awareness survey.

Evidence from the current 2009 survey will be used to help inform UKTI policy

development and other aspects of UK Government policy relating to international trade

and investment and the ability of British business to fully optimise UK opportunities in

global markets.

The 2009 survey has replicated the majority of the 2008 survey material, in order to

provide consistent data on topics which require annual monitoring; however, somechanges were also made in order to include more comprehensive questioning on the

impact of the current economic downturn in the UK, USA and Europe.

Future waves of the survey are expected to follow a similar pattern, combining

continuity with some variation, in order to capture data on a wider range of issues at less

frequent intervals.

This survey is intended to complement evidence already available from other surveys of

UK business most notably:

UKTIs Performance and Impact Monitoring Survey (PIMS) of businesses whichhave used UKTI trade services. This captures some evidence about overseas

business experience and export strategy;

UKTIs annual survey of exporters who have not used UKTI trade services, in

addition to gathering information about overseas business experience and strategy, it

captures evidence about barriers to overseas business activity and associated needs

for external assistance;

The Community Innovation Survey (CIS) which is representative at national level of

firms with at least 10 employees. It captures some evidence about international

aspects of innovation activity including international partnerships, as well as exportactivity.

2.1 Object ives

The research aims of the 2009 wave of this survey, as stated in the brief, were to:

identify UK business use of different modes of internationalisation and overseas

market entry, including among young innovation and technology intensive firms


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identify drivers of geographical focus, including awareness of, and potential interest

in, the emerging and high growth markets which were identified in UKTIs five year

strategy, published in 2006

understand the barriers encountered by UK businesses in seeking to develop

overseas business, both for new exporters and for firms seeking to enter newmarkets

identify business needs for external help to overcome barriers and to address

knowledge and skill needs associated with developing overseas business

identify awareness and use of UKTI support

to understand the role of international market diversification in business

development strategies, including its effects on: revenue growth and resilience,

profitability, and return on investment in new product development

to identify and assess the extent to which credit conditions may be impacting on

firms international business development, including related issues such as access to

trade credit insurance and letters of credit.

The initial five aims were replicated from the previous 2008 survey whilst the latter

two, namely market diversification and access to credit, relate to issues which have

arisen from the context of the present difficult economic conditions. These latter two

areas used some questions from PIMS in addition to new questions which were

developed for the survey.


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3. METHODOLOGY

3.1 In t roduc t ion

The research was conducted via quantitative research namely CATI 3 interviews,

administered by Accents specialist interviewers with extensive experience ofconducting interviews with senior level respondents.

3.2 Sample

A base of 911 interviews was conducted with companies either currently engaged in, or

over the next 12 months seriously considering conducting, some form of overseas

business activity. This included the full range of internationalisation modes, including

selling to overseas customers both directly and via agents or distributors, operating via

contractual agreements and firms operating their own overseas sites.

Whilst the majority of the companies interviewed in this survey (ie 903 of the 911) were

involved in at least one of these forms of internationalisation at the time of the

interview, a small number (ie 8 companies) were only planning to become involved in

this type of activity over the next 12 months. As previously, this latter group have been

labelled considerers in the analysis. This sample group was somewhat smaller than the

55 considerers identified in the 2008 survey.

3.3 Sample Design

The sample frame was built from a random sample of all businesses which waspurchased from a reputable sample provider namely Sample Answers. Sample Answers

sourced the data from Corpdata who have a comprehensive business database

comprising over 1.3 million UK business contacts covering every major industry in the

UK. It is based upon a combination of the Experian National Business Database and the

LBM Business File, supplemented by Kompass and other sources - these are, in turn,

based upon information from Companies House, Thomson Directories and the Credit

Risk File.

Whilst it may take time for younger businesses to be present on any business database

Sample Answers quota strategy ensures that both younger and older businesses are

represented. The sample was screened to ascertain involvement in overseas businessactivity either currently or over the next 12 months. This methodology permitted the

inclusion of considerers in the research.

The sample was stratified by both age of company and number of employees. It was

decided that a disproportionate sample design would be used, so that a roughly equal

number of firms were interviewed that were aged up to 5 years, aged 6-10 years and

aged more than 10 years (to allow for robust analysis by age group). The final

breakdown of companies included in this research is summarised in the table below.

3 Computer Assisted Telephone Interviewing.


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Table 12: Sample breakdown

Actual number of employees Target number of employees

1-49

employees50-99

100 plus

employeesTotal

1-49

employees50-99

100 plus

employeesTotal

Up to 5 years 166 20 50 236As it falls

out

As it falls

outAs it falls out 300

6-10 years 249 27 37 313 240 30 30 300

10 plus years 196 58 108 362 180 60 60 300

Base 611 105 195 911 520 190 190 900

In order to maximise the incidence of firms eligible for interview (ie those who were

engaging in international business activity) it was decided to exclude from the outset a

number of industry sectors which one might expect would have a very low proportion

of companies involved in overseas business activity. These exclusions were based on

the exclusions reported from the previous survey in 2008 and also from additional

common-sense exclusions based on interviewer feedback from the initial pilot

interviews. The analysis only permitted exclusions at the level of 2-digit SIC codes.

These initial exclusions are summarised in Appendix A.

3.4 Quest i onnaire Des ign

The majority of the questionnaire was a replica of the questionnaire used in the 2008

survey with the further inclusion of questions relating to the two new objectives namely:

to understand the role of international market diversification in business

development strategies, including its effects on: revenue growth and resilience,

profitability, and return on investment in new product development

to identify and assess the extent to which credit conditions may be impacting on

firms international business development, including related issues such as access to

trade credit insurance and letters of credit.

Thus given that this research covered areas that have not been covered in previous

studies, an initial qualitative phase comprising ten cognitive interviews was conducted

to help inform the quantitative questionnaire design. These face-to-face interviews

conducted by the Accent project executives, were conducted using a Topic Guide

agreed following meetings with both the Accent and the UKTI project manager. From

these cognitive interviews further questions were drafted primarily on the topic of theimpact on business of the economic downturn in the UK, US and European markets.

Following this initial qualitative phase the quantitative questionnaire was drafted, with a

pilot of 20 CATI interviews conducted prior to the main fieldwork to test the

questionnaire design, including the new questions, and to ensure that the questionnaire

flowed smoothly.

At the start of this questionnaire to ensure that we were speaking to the individual who

was most qualified to talk about their firms international business activities, Accent

interviewers carefully probed with initial screening questions and also asked for the

respondents job title to ensure that the right calibre of respondent was answering thequestionnaire. Typically the respondent was a Director of the company with roles

including Business Development Director, Sales Director and Marketing Director.


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A copy of the final questionnaire is appended to this report as Appendix B.

3.5 Fie ldwork

The main fieldwork was conducted between 3 March and 24 April 2009 at Accents twoTelephone Units based in Bristol and Edinburgh. The interview duration was an average

of 25 minutes, which was longer than the duration of the 2008 interview which was

reported to be an average of 19 minutes.

The following table summarises the number of sample records selected for CATI, the

approximate number of records lost due to screening-out or incorrect contact details,

and the number of interviews completed along with the associated response and refusal

rates.

Table 13: Accent sample breakdown

CATI SCREENING

Selection for CATI 23,363

Unusable no overseas business activity 12,286

Unusable contact details incorrect 1,575

ACHIEVED INTERVIEWS / RESPONSE RATES

Total usable sample 9,502

Interviews achieved 911

Response rate (%) 10%

Refusal rate (%) 24%

3.6 Weight ing

The data presented in this report has not been weighted due to the disproportionate

nature of the sample design (ie the disproportionate sampling by age of firm and the

number of employees). Hence all of the data tables reported in the subsequent chapters

are of the unweighted data. The research team did consider weighting the data in line

with the weighting undertaken for the 2008 survey but this would have given low

weights to the larger firms. In order for the analysis to reflect the responses from these

larger firms, the data were left unweighted but presented in a format which reflects the

sample design.

The report provides some comparisons with the results of the 2008 survey. The tablebelow provides a comparison of the data by age group.

Table 14: Comparison of data by age group

2008 weighted survey data 2009 unweighted survey data

Up to 5 years 19% 26%

6-10 years 19% 34%

More than 10 years 62% 40%


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3.7 Analys is

Throughout the report, each variable is analysed first for the whole sample and then by

two sets of sub-groups which reflect Intellectual Property (IP) activity and usage of

UKTI services.

Respondent firms were classified as IP active if they reported that they held patents or

trademarks either in the UK or overseas. All other respondents were classified as non-IP

active.

Users of UKTI services were identified as firms which reported having used a UKTI

service at some point in the past ie usage was not restricted to a determined period. The

profile of UKTI users in this survey differs from that of the profile of UKTI clients

identified through the UKTI Performance and Impact Monitoring Survey (PIMS). PIMS

is a quarterly survey of UKTI clients which have used its trade services 6 months prior

to taking part in the survey (with the exception of clients of the Passport service, for

which the service was received 1 year prior to the interview). Clients are randomlysampled to take part in the survey and PIMS results show a consistent profile of UKTI

clients.

When interpreting the results of this survey, the differences between UKTI users as

identified in this survey and the PIMS survey should be borne in mind. Where relevant,

differences between the profiles of UKTI clients identified in this survey, compared to

PIMS are highlighted in the text. For the purposes of comparison, tables are provided

which show analysis by the sub-groups of users and non-users from this survey with

data from 2008 and 2009 PIMS surveys of non-users of UKTI services (PIMS Non-

users) and the results of two sets of pooled PIMS results for four quarters (PIMS 12-15

and PIMS 7-10).

3.8 Sta t is t ica l Sign i f i cance

Throughout the report, where a difference between two groups (eg UKTI users and non-

users) has been found to be statistically significant at the 5% level (using a Mann

Whitney test), for individual questions this is indicated in the text as being statistically

significant. This level of significance indicates that one can be 95% certain that the

differences between the two sample groups with the specific characteristic being tested

are not the same. The Mann Whitney test was used because the sample was notnormally distributed.


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4. COMPANY PROFILE

This chapter provides descriptive analysis of the characteristics of the survey

respondents. The survey results are presented in such a way as to reflect the sampling

strategy used in the survey. Each variable is analysed first for the whole sample and

then by two sets of sub-groups which reflect Intellectual Property (IP) activity and

usage of UKTI services.

4.1 Age of Bus iness

All companies were asked to state how long ago their business was established. For

further clarification, interviewers were also asked to read out that this meant when the

business in its current form started trading. Furthermore, if the business were a

subsidiary then the respondent was asked to respond to this question in terms of the

subsidiary in which they worked.

The following table depicts the unweighted figures for when the business was

established by the size of the company as defined by the number of employees. There is

a good representation of companies within each of the size classifications.

Table 15: Company age by size of company6-10 years 10+ years

TotalUp to 5

years 0 - 49 50 - 99 100 + 0 - 49 50 - 99 100 +

Base 911 236 249 27 37 196 58 108Total

100% 100% 100% 100% 100% 100% 100% 100%

0-9 employees 33% 42% 49% 0% 0% 38% 0% 0%

10-49 employees 34% 28% 51% 0% 0% 62% 0% 0%

50-99 employees 12% 8% 0% 100% 0% 0% 100% 0%

100+ employees 21% 21% 0% 0% 100% 0% 0% 100%

Typically, the IP active companies are older than their non-IP active counterparts. When

IP active companies are broken down by age, there appears to be a trend towards the

proportion of IP active firms increasing with age. However, the same trend is not

apparent among non-IP active firms, with a peak in the 6 to 10 age group and fewer

companies aged more than 10 years, which suggest the relationship here may be more

complex.

Table 16: Company age by IP activity6-10 years 10+ years

TotalUp to 5

years 0 - 49 50 - 99 100 + 0 - 49 50 - 99 100 +

Base 457 107 90 17 26 97 37 83IP active

100% 100% 100% 100% 100% 100% 100% 100%

Up to 5 years 23% 100% 0% 0% 0% 0% 0% 0%

6-10 years 29% 0% 100% 100% 100% 0% 0% 0%

10+ years 47% 0% 0% 0% 0% 100% 100% 100%

Base 454 129 159 10 11 99 21 25Non-IP active

100% 100% 100% 100% 100% 100% 100% 100%

Up to 5 years 28% 100% 0% 0% 0% 0% 0% 0%

6-10 years 40% 0% 100% 100% 100% 0% 0% 0%

10+ years 32% 0% 0% 0% 0% 100% 100% 100%


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According to the current survey data, UKTI usage appears to increase with the age of

the company, with the longer established companies more likely to have been a user of

UKTI services. As with IP activity however, the relationship is non-linear for the non-

UKTI users with the proportions increasing for companies aged up to ten years and then

decreasing for the older companies.

Table 17: Company age by UKTI usage6-10 years 10+ years

TotalUp to 5

years 0 - 49 50 - 99 100 + 0 - 49 50 - 99 100 +

Base 621 135 148 18 24 154 46 96UKTIusers 100% 100% 100% 100% 100% 100% 100% 100%

Up to 5 years 22% 100% 0% 0% 0% 0% 0% 0%

6-10 years 31% 0% 100% 100% 100% 0% 0% 0%

10+ years 48% 0% 0% 0% 0% 100% 100% 100%

Base 290 101 101 9 13 42 12 12Non-UKTIusers 100% 100% 100% 100% 100% 100% 100% 100%

Up to 5 years 35% 100% 0% 0% 0% 0% 0% 0%

6-10 years 42% 0% 100% 100% 100% 0% 0% 0%

10+ years 23% 0% 0% 0% 0% 100% 100% 100%

The following table summarises the current survey results with results from PIMS 12-

15 and 7-10 and PIMS non-user surveys of 2008 and 2009. Whilst the current survey

data shows UKTI usage increasing with the age of the company; this is in contrast to

PIMS data for over 7,000 firms. The PIMS data indicate that although over half of users

are firms which are at least 10 years old, one quarter are up to 5 years old. The

proportion dips for firms that are 6-10 years old. Data from PIMS non-user surveys for2008 and 2009 show no consistent pattern as regards the age profile of non-users.

Table 18: Comparison of survey results for company age by UKTI usage with resultsfrom PIMS 12-15 and 7-10 and PIMS non-user surveys of 2008 and 2009

Total

This

survey

UKTI

Non-users

This survey

UKTI

users

PIMS Non-

users 2009

Users

PIMS 12-

15

PIMS Non-

users 2008

Users

PIMS 7-10

Base 290 621 300 3985 302 3143UKTI users

100% 100% 100% 100% 100% 100%

Up to 5 years 35% 22% 17% 26% 32% 26%

6-10 years 42% 31% 23% 17% 31% 17%

10+ years 23% 48% 60% 55% 36% 56%

4.2 Number of Employees

All companies were asked to indicate the number of people currently employed by their

business in the UK. Respondents unable to offer a precise number here were presented

with banded numbers and were asked to state which of these bands was most

appropriate for their company.

Younger and older companies were more likely to have more than 100 employees.However, this result should be interpreted with caution since it may be driven by

anomalies in the survey sample: there were a considerably higher proportion of firms


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under 5 years old with at least 100 employees in this survey than was found in either the

2008 wave of this survey or found in the Annual Small Business Survey (ASBS) 2007.

Table 19: Company size by company age6-10 years 10+ years

TotalUp to 5

years 0 - 49 50 - 99 100 + 0 - 49 50 - 99 100 +

Base 911 236 249 27 37 196 58 108Total

100% 100% 100% 100% 100% 100% 100% 100%

0-9 employees 33% 42% 49% 0% 0% 38% 0% 0%

10-49 employees 34% 28% 51% 0% 0% 62% 0% 0%

50-99 employees 12% 8% 0% 100% 0% 0% 100% 0%

100+ employees 21% 21% 0% 0% 100% 0% 0% 100%

IP active companies were more likely than non-IP active companies to have both fewer

than nine employees and also more than one hundred employees. Again this may be

driven by anomalies in the survey sample. There were statistically significant

differences in the number of employees between IP active and non-IP active companies.

Table 20: Company size by IP activity6-10 years 10+ years

TotalUp to 5

years 0 49 50 - 99 100 + 0 - 49 50 - 99 100 +

Base 457 107 90 17 26 97 37 83IP active

100% 100% 100% 100% 100% 100% 100% 100%

0-9 employees 20% 29% 38% 0% 0% 29% 0% 0%

10-49 employees 33% 25% 62% 0% 0% 71% 0% 0%

50-99 employees 14% 10% 0% 100% 0% 0% 100% 0%

100+ employees 32% 36% 0% 0% 100% 0% 0% 100%

Base 454 129 159 10 11 99 21 25Non-IPactive 100% 100% 100% 100% 100% 100% 100% 100%

0-9 employees 45% 53% 56% 0% 0% 47% 0% 0%

10-49 employees 36% 31% 44% 0% 0% 53% 0% 0%

50-99 employees 9% 7% 0% 100% 0% 0% 100% 0%

100+ employees 11% 9% 0% 0% 100% 0% 0% 100%

In this survey, UKTI users had a higher proportion of companies with more than one

hundred employees than equivalent sized firms which were non-UKTI users. There

were statistically significant differences in the number of employees by UKTI usage.


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Table 21: Company size by UKTI usage6-10 years 10+ years

TotalUp to 5

years 0 - 49 50 - 99 100 + 0 - 49 50 - 99 100 +

Base 621 135 148 18 24 154 46 96UKTI users

100% 100% 100% 100% 100% 100% 100% 100%

0-9 employees 30% 40% 51% 0% 0% 38% 0% 0%

10-49 employees 32% 24% 49% 0% 0% 62% 0% 0%

50-99 employees 12% 8% 0% 100% 0% 0% 100% 0%

100+ employees 25% 27% 0% 0% 100% 0% 0% 100%


0-9 employees 38% 45% 48% 0% 0% 38% 0% 0%

10-49 employees 39% 34% 52% 0% 0% 62% 0% 0%

50-99 employees 10% 9% 0% 100% 0% 0% 100% 0%

100+ employees 13% 13% 0% 0% 100% 0% 0% 100%

However, a higher proportion of firms with over 100 employees were observed in the

survey sample than in either the PIMS user or non-user surveys. For example, this

current survey found that 1 in 4 UKTI users have over 100 employees, while evidence

from over 7,000 users participating in PIMS surveys suggests that the proportion is

closer to 1 in 5 as shown in the table below.

Table 22: Comparison of company size by UKTI usage with client profiles from PIMS 12-15 and 7-10 and PIMS non-user surveys of 2008 and 2009

Total

UKTI Non-

usersUKTI users

PIMS Non-

users 2009

Users PIMS

12-15

PIMS Non-

users 2008

Users PIMS

7-10

Base 290 621 300 3985 302 3143UKTI users

100% 100% 100% 100% 100% 100%

0-9 employees 38% 30% 59% 41% 56% 42%

10-49 employees 39% 32% 33% 28% 37% 29%

50-99 employees 10% 12% 4% 8% 4% 10%

100+ employees 13% 25% 4% 20% 1% 18%

4.3 Company Turnover

All companies were asked to indicate what the annual turnover of their business was.

Companies established in the last year were asked to predict the turnover of theirbusiness in the first year of trading. Respondents unable to offer a precise figure here

were presented with banded amounts and were asked to state which of these bands they

felt was most appropriate for their company.

Firms in the 2009 survey sample, compared to the 2008 survey sample, tended to have

higher turnover. In the 2008 survey, half (53%) of the internationalising companies had

fairly modest turnovers of up to 2 million while only one third (32%) of the sample

firms in the 2009 survey had this level of turnover. In contrast, 27% of the 2009 sample

had turnover exceeding 10 million, compared to 6% of firms in the 2008 survey

sample.


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Table 23: Annual company turnover6-10 years 10+ years

TotalUp to 5

years 0 - 49 50 - 99 100 + 0 - 49 50 - 99 100 +

Base 911 236 249 27 37 196 58 108Total

100% 100% 100% 100% 100% 100% 100% 100%

Up to 500,000 11% 17% 16% 0% 0% 11% 0% 2%

500,000 - 2M 21% 25% 29% 4% 0% 28% 2% 0%

2M-10M 27% 23% 32% 44% 5% 35% 40% 8%

10M-50M 16% 14% 6% 41% 30% 7% 34% 44%

More than 50M 11% 11% 4% 7% 43% 3% 9% 33%

Dont know/refused 14% 11% 13% 4% 22% 17% 16% 13%

There were statistically significant differences in the annual turnover between IP active

and non-IP active companies. IP active companies were more than twice as likely as

non-IP active companies (39% vs 16%) to have annual turnovers of more than 10

million.

Table 24: Annual company turnover by IP activity6-10 years 10+ years

TotalUp to 5

years 0 - 49 50 - 99 100 + 0 - 49 50 - 99 100 +

Base 457 107 90 17 26 97 37 83IP active

100% 100% 100% 100% 100% 100% 100% 100%

Up to 500,000 6% 9% 11% 0% 0% 8% 0% 1%

500,000 - 2M 16% 22% 28% 0% 0% 26% 3% 0%

2M-10M 25% 21% 38% 29% 0% 35% 30% 10%

10M-50M 23% 19% 6% 59% 35% 9% 41% 42%

More than 50M 16% 14% 4% 6% 50% 4% 8% 39%



100% 100% 100% 100% 100% 100% 100% 100%

Up to 500,000 16% 22% 19% 0% 0% 13% 0% 4%

500,000 - 2M 25% 27% 30% 10% 0% 30% 0% 0%

2M-10M 30% 25% 29% 70% 18% 34% 57% 4%

10M-50M 10% 9% 6% 10% 18% 5% 24% 48%

More than 50M 6% 8% 3% 10% 27% 1% 10% 16%


There were statistically significant differences in the annual turnover between UKTI

users and non-UKTI users. Fewer than six in ten (57%) UKTI users had annualturnovers of up to 10 million, compared to two thirds (65%) of non-UKTI users.

Hence, UKTI users were slightly more likely than non-UKTI users to have annual

turnovers in excess of 10 million.


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Table 25: Annual company turnover by UKTI usage6-10 years 10+ years

TotalUp to 5

years 0 - 49 50 - 99 100 + 0 - 49 50 - 99 100 +

Base 621 135 148 18 24 154 46 96UKTI users

100% 100% 100% 100% 100% 100% 100% 100%

Up to 500,000 10% 13% 16% 0% 0% 12% 0% 2%

500,000 - 2M 19% 22% 31% 0% 0% 28% 2% 0%

2M-10M 28% 24% 31% 50% 4% 35% 43% 8%

10M-50M 18% 15% 5% 44% 29% 7% 30% 44%

More than 50M 12% 12% 2% 0% 42% 3% 9% 35%


Base 290 101 101 9 13 42 12 12Non-UKTI users

100% 100% 100% 100% 100% 100% 100% 100%

Up to 500,000 14% 21% 17% 0% 0% 7% 0% 0%

500,000 - 2M 24% 29% 27% 11% 0% 29% 0% 0%

2M-10M 27% 21% 34% 33% 8% 33% 25% 8%

10M-50M 13% 12% 6% 33% 31% 7% 50% 42%

More than 50M 9% 9% 6% 22% 46% 0% 8% 17%


The turnover of companies in the current 2009 survey was typically higher for both

UTKI users and non-UKTI users than in the PIMS 12-15 and 7-10 and PIMS non-user

surveys of 2008 and 2009 (Table 26).

Table 26: Comparison of annual company turnover by UKTI usage with client profilesfrom PIMS 12-15 and 7-10 and PIMS non-user surveys of 2008 and 2009

Total

UKTINon-

users

UKTI

users

PIMSNon-

users

2009

UsersPIMS

12-15

PIMSNon-

users

2008

UsersPIMS 7-

10

Base 290 621 300 3985 302 3143UKTI users

100% 100% 100% 100% 100% 100%

Up to 500,000 14% 10% 35% 28% 29% 29%

500,000-2 million 24% 19% 31% 19% 36% 19%

2-10 million 27% 28% 17% 18% 17% 17%

10-50 million 13% 18% 5% 11% 3% 9%

More than 50 million 9% 12% 2% 6% 1% 4%

Dont know/refused/not yet trading 13% 14% 10% 17% 14% 21%

4.4 Indust ry Sec t o r

All companies were asked to identify the main activity of their business.

The main activity for just over six in ten (62%) of the surveyed companies was

manufacturing, followed by retail for just under one in seven companies (15%), as

summarised in the table below.


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Table 27: Industry sector6-10 years 10+ years

TotalUp to 5

years 0 - 49 50 - 99 100 + 0 - 49 50 - 99 100 +

Base 911 236 249 27 37 196 58 108Total

100% 100% 100% 100% 100% 100% 100% 100%

Agriculture, hunting & forestry 1% 2% 2% 0% 0% 1% 0% 2%

Fishing 0% 0% 0% 0% 0% 0% 0% 0%

Mining & quarrying 2% 2% 0% 0% 0% 3% 2% 2%

Manufacturing 62% 56% 54% 78% 76% 67% 84% 66%

Electricity, gas and water supply 1% 1% 1% 0% 3% 1% 2% 1%

Construction 3% 3% 2% 0% 0% 2% 0% 6%

Retail, wholesale & repair of motor vehicles 15% 16% 19% 7% 3% 18% 9% 10%

Hotels and catering 0% 0% 0% 7% 0% 0% 0% 0%

Transport, storage and communication 5% 9% 8% 0% 5% 1% 0% 2%

Financial intermediation (Finance) 1% 1% 1% 0% 0% 1% 0% 1%

Real estate, renting & business activities 4% 4% 5% 4% 5% 2% 0% 3%

Public administration and defence 1% 0% 1% 0% 0% 1% 0% 4%

Education 1% 0% 2% 0% 3% 1% 0% 2%

Health and social work 1% 0% 0% 0% 3% 2% 0% 1%

Other community, social & personal service

activities3% 4% 4% 4% 3% 1% 2% 2%

Other 1% 1% 2% 0% 0% 1% 2% 0%

The following table shows the profile of firms in terms of their industry sector. The

data on sector is collected at the level of 1-digit SIC code, but for the purpose of this

analysis has been summarised into four main classifications which are:

Primary industries

ProductionConstruction

Services.

Table 28: Definition of industry sector by main activity

Sector Main Activity

Primary

Agriculture, hunting & forestry

Fishing

Mining & quarrying

Electricity, gas and water supply

Production Manufacturing

Construction Construction

Services

Retail, wholesale & repair of motor vehiclesHotels and catering

Transport, storage and communication

Financial intermediation (Finance)

Real estate, renting & business activities

Public administration and defence

Education

Health and social work

Other community, social & personal service activities

In the 2008 survey, roughly similar proportions of the companies were either classified

as being in the production (46%) or services (52%) sectors. In the 2009 survey, these

proportions had changed considerably with approximately two thirds of the sample

(62%) in the production, and a third (32%) in the services sector. This should be taken

into consideration when interpreting the data. In this 2009 survey, whilst the primaryand construction industry sectors are still a minority, more of these companies were

surveyed than in the 2008 survey.


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Table 29: Simplified industry sector6-10 years 10+ years

TotalUp to 5

years 0 - 49 50 - 99 100 + 0 - 49 50 - 99 100 +

Base 911 236 249 27 37 196 58 108Total

100% 100% 100% 100% 100% 100% 100% 100%

Services 32% 36% 41% 22% 22% 27% 12% 24%

Construction 3% 3% 2% 0% 0% 2% 0% 6%

Production 62% 56% 54% 78% 76% 67% 84% 66%

Primary 4% 5% 3% 0% 3% 4% 3% 5%

There were statistically significant differences in the industry sector by IP active and

non-IP active companies. A higher proportion of non-IP active firms were in the

services sector than was the case for IP active firms. This does not necessarily mean that

service firms are less likely to be IP active than manufacturing but rather may be a

reflection of the relatively low proportions of the sample coming from service sectors

such as finance which have relatively high levels of IP activity (around 30% of firms in

the finance sector held trademarks in 20004). Similarly, a higher proportion of IP active

firms were in the production sector than was the case for non-IP active firms.

Table 30: Simplified industry sector by IP activity6-10 years 10+ years

TotalUp to 5

years 0 49 50 - 99 100 + 0 - 49 50 - 99 100 +

Base 457 107 90 17 26 97 37 83IP active

100% 100% 100% 100% 100% 100% 100% 100%

Services 23% 30% 32% 24% 27% 14% 11% 19%

Construction 2% 2% 1% 0% 0% 3% 0% 2%

Production 72% 66% 61% 76% 73% 80% 89% 75%

Primary 3% 2% 6% 0% 0% 2% 0% 4%

Base 454 129 159 10 11 99 21 25Non-IPactive 100% 100% 100% 100% 100% 100% 100% 100%

Services 40% 42% 45% 20% 9% 39% 14% 40%

Construction 3% 4% 3% 0% 0% 1% 0% 16%

Production 52% 47% 50% 80% 82% 55% 76% 36%

Primary 5% 7% 2% 0% 9% 5% 10% 8%

In this survey, UKTI users were more likely to be dominant in the production sector

whilst non-UKTI users were more equally split between both the services and the

production sectors (Table 31). Thus there were statistically significant differences in the

industry sector between UKTI users and non-UKTI users.

However, this is very different to the client profile consistently achieved from PIMS

which shows that 60% of UKTI clients are in the services sector, and 38% in

production, as shown below (Table 32).

4 Greenhalgh and Rogers 2005


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Table 31: Simplified industry sector by UKTI usage6-10 years 10+ years

TotalUp to 5

years 0 49 50 - 99 100 + 0 - 49 50 - 99 100 +

Base 621 135 148 18 24 154 46 96UKTI users

100% 100% 100% 100% 100% 100% 100% 100%

Services 26% 24% 39% 6% 29% 25% 11% 21%

Construction 3% 4% 2% 0% 0% 3% 0% 6%

Production 68% 67% 57% 94% 67% 71% 85% 69%

Primary 3% 6% 3% 0% 4% 1% 4% 4%


Services 44% 53% 44% 56% 8% 36% 17% 50%

Construction 2% 2% 3% 0% 0% 0% 0% 0%

Production 50% 42% 50% 44% 92% 52% 83% 42%

Primary 4% 3% 4% 0% 0% 12% 0% 8%

The following table comprises the comparable data from the PIMS 12-15 and 7-10 and

PIMS non-user surveys of 2008 and 2009.

Table 32: Comparison of sectors by UKTI usage with client profiles from PIMS 12-15 and7-10 and PIMS non-user surveys of 2008 and 2009

Total

UKTI non-

users

UKTI

users

PIMS non-

users 2009

Users PIMS

12-15

PIMS non-

users 2008

Users PIMS

7-10

Base 290 621 300 3985 302 3143UKTI users

100% 100% 100% 100% 100% 100%

Services 44% 26% 47% 60% 45% 59%

Construction 2% 3% 1% 1% 1% 1%

Production 50% 68% 50% 38% 53% 38%

Primary 4% 3% 2% 1% 1% 2%

4.5 Company Ow nership

All respondents were asked to indicate whether their business was UK owned, foreign-

owned or jointly UK and foreign-owned.

As in the 2008 survey, the majority of companies were UK owned. However, the 2009

survey sample contained a higher proportion of foreign-owned companies, with one inseven foreign-owned (15%), compared to one in ten (9%) in the 2008 survey. This

suggests that the 2009 sample has a bias towards foreign-owned firms. In both surveys,

only a small minority of firms were jointly UK and foreign-owned.

Table 33: Company ownership by company age6-10 years 10+ years

TotalUp to 5

years 0 - 49 50 - 99 100 + 0 - 49 50 - 99 100 +

Base 911 236 249 27 37 196 58 108Total

100% 100% 100% 100% 100% 100% 100% 100%

UK-owned 81% 81% 89% 74% 51% 85% 74% 69%

Foreign-owned 15% 14% 9% 26% 46% 11% 17% 28%

Joint UK and foreign-owned 3% 4% 2% 0% 3% 3% 9% 3%

Dont know 0% 0% 0% 0% 0% 2% 0% 1%


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IP active companies were more likely to be foreign-owned than non-IP active

companies.

Table 34: Company ownership by IP activity6-10 years 10+ years

TotalUp to 5

years 0 - 49 50 - 99 100 + 0 - 49 50 - 99 100 +

Base 457 107 90 17 26 97 37 83IP active

100% 100% 100% 100% 100% 100% 100% 100%

UK-owned 73% 72% 82% 65% 46% 77% 78% 69%

Foreign-owned 23% 21% 16% 35% 50% 20% 16% 28%


Dont know 0% 0% 0% 0% 0% 1% 0% 1%


100% 100% 100% 100% 100% 100% 100% 100%

UK-owned 88% 89% 93% 90% 64% 92% 67% 68%

Foreign-owned 8% 9% 5% 10% 36% 2% 19% 28%


Dont know 0% 0% 0% 0% 0% 2% 0% 0%

Similar proportions of users and non-users of UKTI services were UK owned, foreign-

owned and jointly UK and foreign-owned.

Table 35: Company ownership by UKTI usage6-10 years 10+ years

TotalUp to 5

years 0 - 49 50 - 99 100 + 0 - 49 50 - 99 100 +

Base 621 135 148 18 24 154 46 96UKTI users

100% 100% 100% 100% 100% 100% 100% 100%

UK-owned 81% 79% 93% 72% 58% 86% 74% 70%

Foreign-owned 15% 16% 5% 28% 38% 10% 17% 27%


Dont know 0% 0% 0% 0% 0% 1% 0% 1%


100% 100% 100% 100% 100% 100% 100% 100%

UK-owned 80% 84% 84% 78% 38% 79% 75% 58%

Foreign-owned 17% 12% 14% 22% 62% 14% 17% 33%


Don't know 0% 0% 0% 0% 0% 2% 0% 0%

Among users of UKTI services, 15% of firms from the current survey were foreign-

owned compared to 10% and 7% in PIMS 12-15 and 7-10 respectively. This is

indicative of the 2009 survey having a bias towards foreign-owned firms. Compared to

the PIMS 7-10 sample of 3,143 firms, twice as many foreign-owned firms participated

in this survey.

The difference was also large for non-users with 17% of the survey sample of non-users

being foreign-owned (ie close to 1 in 6 firms) which was almost double the 9% and 8%

found in the 2009 and 2008 PIMS non-user surveys.


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Table 36: Comparison of company ownership by UKTI usage with client profiles fromPIMS 12-15 and 7-10 and PIMS non-user surveys of 2008 and 2009

Total

UKTI

Non-

users

UKTI

users

PIMS

Non-

users

2009

Users

PIMS

12-15

PIMS

Non-

users

2008

Users

PIMS

7-10

Base 290 621 300 3985 302 3143UKTI users

100% 100% 100% 100% 100% 100%

UK-owned 80% 81% 90% 83% 90% 86%

Foreign-owned 17% 15% 9% 10% 8% 7%

Joint UK and foreign-owned 3% 3% 0% 2% 2% 2%

Don't know/refused/not for profit/other business type 0% 0% 0% 5% 0% 5%

4.6 Benef i ts o f Sel l ing in to Overseas Market s

All respondents were asked to indicate whether for their own company the following

were possible benefits of selling into overseas markets. Respondents were asked to ratea list of benefits on a 5 point scale, where 1 meant it was a benefit to no extent and 5

meant it was a benefit to a critical extent.

The main benefits of selling into overseas markets were to achieve a level of growth

otherwise not possible and to fully utilise exiting capacity. However, for firms over 5

years and with 50-99 employees, exposure to new ideas was more frequently cited than

fully using existing capacity.

Table 37: Benefits of selling into overseas markets

6-10 years 10+ years

Total

Up to 5

years 0 - 49 50 - 99 100 + 0 - 49 50 - 99 100 +

Base 911 236 249 27 37 196 58 108Total

100% 100% 100% 100% 100% 100% 100% 100%

Achieve a level of growth otherwise notpossible

79% 72% 76% 89% 86% 84% 84% 89%

Fully utilise your existing capacity 76% 75% 69% 74% 86% 77% 81% 87%

Reduce dependence on a single or small

number of markets63% 60% 58% 67% 70% 65% 66% 71%

Exposure to new ideas 72% 71% 67% 85% 68% 67% 84% 84%

Increase the commercial life span of

products and services54% 50% 47% 67% 65% 52% 60% 70%

IP active companies were more likely to state that each of these statements were abenefit of international trading than non-IP active companies. Achieving a level of

growth otherwise not possible remained the most frequently cited benefit for IP active

and non-IP active firms. However, IP active firms were as likely to indicate that

exposure to new ideas was a benefit as they were to indicate the benefit of fully utilising

existing capacity. For non-IP active firms, exposure to new ideas was a less important

benefit.


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Table 38: Benefits of selling into overseas markets by IP activity6-10 years 10+ years

TotalUp to 5

years 0 - 49 50 - 99 100 + 0 49 50 - 99 100 +

Base 457 107 90 17 26 97 37 83IP active

100% 100% 100% 100% 100% 100% 100% 100%

Achieve a level of growth

otherwise not possible 88% 81% 88% 88% 85% 90% 92% 94%Fully utilise your existing

capacity81% 81% 74% 76% 88% 80% 81% 86%

Reduce dependence on a

single or small number of

markets

70% 68% 63% 76% 73% 73% 73% 71%


Increase the commercial

life span of products and

services

63% 64% 57% 76% 58% 61% 62% 73%


100% 100% 100% 100% 100% 100% 100% 100%

Achieve a level of growthotherwise not possible

71% 64% 69% 90% 91% 79% 71% 72%

Fully utilise your existingcapacity 71% 70% 67% 70% 82% 73% 81% 92%



markets

56% 53% 55% 50% 64% 57% 52% 72%




services

44% 38% 42% 50% 82% 42% 57% 60%

UKTI users were more likely to state that each of these statements were a benefit of

international trading than non-UKTI users. The most frequently cited benefit by firms

that were over 5 years old and had 50-99 employees was exposure to new ideas.

Table 39: Benefits of selling into overseas markets by UKTI usage6-10 years 10+ years

TotalUp to 5

years 0 - 49 50 - 99 50 - 99 100 +

Base 621 135 148 18UKTI

usersBase 621 135

UKTI users

100% 100% 100% 100% 100% 100%

Achieve a level of growth

otherwise not possible85% 81% 82% 89% 88% 88% 85% 90%

Fully utilise your existing

capacity78% 81% 70% 72% 88% 77% 80% 85%



markets

68% 70% 62% 72% 63% 70% 67% 72%




services

57% 58% 49% 72% 67% 51% 65% 69%


100% 100% 100% 100% 100% 100% 100% 100%

Achieve a level of growthotherwise not possible

68% 59% 66% 89% 85% 71% 83% 83%

Fully utilise your existing

capacity72% 66% 68% 78% 85% 76% 83% 100%



markets

51% 46% 51% 56% 85% 45% 58% 67%



life span of products andservices

46% 39% 45% 56% 62% 52% 42% 83%


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4.7 Experie nc e of Doing Busines s Overseas: Self-assessment

All companies currently doing business overseas were asked to summarise their level of

experience on a scale of 1 to 4, where 1 meant very experienced in overseas markets

and 4 meant not at all experienced in overseas markets.

The vast majority of companies conceded that they were either quite experienced

(42%) or very experienced (44%) in operating in overseas markets, with a sixth (16%)

stating they felt not very experienced. As might be expected, and in parallel with last

years survey, there is a link between company age, size of company and companys

overall assessment of their experience, with companies older than 5 years of age and

those with more employees more likely to feel that they have higher levels of

experience of conducting business overseas.

Despite this, the results differ somewhat from those of the 2008 survey. This is most

marked for firms which indicated that they were very experienced in overseas markets;

in 2008 only 26% of the sample indicated this level of experience, compared to 40%this year. A higher proportion of firms indicated that they were not very experienced in

overseas markets in the 2008 survey (23% compared to 16% in this survey). A bias in

the 2009 sample toward experienced exporters is corroborated by comparisons with

PIMS survey data (Table 43). This is probably a reflection of the 2009 sample

containing more experienced exporters as measured by the proportion of turnover from

overseas markets and the number of markets in which firms are active.

Table 40: Self-assessment of experience in overseas markets6-10 years 10+ years

TotalUp to

5 years 0 - 49 50 - 99 100 + 0 - 49 50 - 99 100 +

Base 911 236 249 27 37 196 58 108Total

100% 100% 100% 100% 100% 100% 100% 100%

Very experienced in overseas

markets40% 36% 28% 44% 65% 39% 43% 63%

Quite experienced 42% 39% 48% 48% 27% 45% 47% 32%

Not very experienced 16% 19% 22% 7% 8% 15% 10% 4%

Not at all experienced in

overseas markets1% 3% 2% 0% 0% 0% 0% 0%

Dont know 0% 1% 0% 0% 0% 0% 0% 0%

Refused 0% 0% 0% 0% 0% 1% 0% 0%

Considerers 1% 3% 0% 0% 0% 0% 0% 1%

There was a statistically significant difference in the experience rating of IP activecompanies compared to non-IP active companies. IP active companies were more likely

than non-IP active companies to state that they were very experienced in operating in

overseas markets.


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Table 41: Self-assessment of experience in overseas markets by IP activity6-10 years 10+ years

TotalUp to 5

years 0 - 49 50 - 99 100 + 0 - 49 50 - 99 100 +

Base 457 107 90 17 26 97 37 83IP active

100% 100% 100% 100% 100% 100% 100% 100%


markets 45% 42% 32% 65% 65% 34% 46% 66%Quite experienced 43% 45% 49% 35% 23% 52% 51% 29%




Refused 0% 0% 0% 0% 0% 1% 0% 0%

Considerers 1% 2% 0% 0% 0% 0% 0% 1%


100% 100% 100% 100% 100% 100% 100% 100%


markets34% 32% 26% 10% 64% 44% 38% 52%





Dont know 0% 2% 0% 0% 0% 0% 0% 0%

Considerers 1% 3% 1% 0% 0% 0% 0% 0%

Similarly, there was a statistically significant difference in the experience rating of

UKTI users and non-UKTI users. UKTI users were more likely than non-UKTI users to

state that they were both very experienced and quite experienced in operating in

overseas markets.

Table 42: Self-assessment of experience in overseas markets by UKTI usage6-10 years 10+ years

TotalUp to 5

years 0 - 49 50 - 99 100 + 0 - 49 50 - 99 100 +

Base 621 135 148 18 24 154 46 96UKTI users

100% 100% 100% 100% 100% 100% 100% 100%


markets42% 39% 32% 44% 54% 38% 50% 63%





Refused 0% 0% 0% 0% 0% 1% 0% 0%

Considerers 0% 1% 1% 0% 0% 0% 0% 1%


100% 100% 100% 100% 100% 100% 100% 100%


markets34% 34% 22% 44% 85% 43% 17% 67%





Dont know 1% 2% 0% 0% 0% 0% 0% 0%

Considerers 2% 5% 0% 0% 0% 0% 0% 0%

In summary, UKTI users were more likely than non-UKTI users to state that they wereeither quite experienced or very experienced in operating in overseas markets which

is consistent with evidence from the PIMS surveys. However, this survey found a


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somewhat higher proportion of UKTI users to be very experienced in overseas markets

(42%) compared to 34% and 27% in PIMS 12-15 and 7-10 respectively.

Table 43: Comparison of self-assessment of experience in overseas markets by UKTIusage with client profiles from PIMS 12-15 and 7-10 and PIMS non-user surveys of 2008and 2009

Total

UKTI

non-

users

UKTI

users

PIMS

non-

users

2009

Users

PIMS

12-15

PIMS

non-

users

2008

Users

PIMS 7-

10

Base 290 621 300 3985 302 3143UKTI users

100% 100% 100% 100% 100% 100%

Very experienced in overseas markets 34% 42% 23% 34% 22% 27%

Quite experienced 39% 44% 39% 44% 45% 42%

Not very experienced 22% 13% 34% 14% 27% 20%

Not at all experienced in overseas markets 2% 0% 4% 2% 4% 4%

Not currently exporting - - 0% 6% 0% 7%

Dont know 1% 0% - - - -

Considerers 2% 0% - - - -

4.8 Overseas Exper ience: Number of Years Doing Bus iness

Overseas

All companies were asked to indicate how long ago their company had started to

conduct business overseas.

There is clearly a strong correlation between the age of the company and the number of

years conducting overseas business.

Compared to the 2008 survey, a higher proportion of firms have been active in overseas

markets for at least 20 years (25% vs 18% in the 2008 survey).

Table 44: Company age by number of years doing business overseas6-10 years 10+ years

TotalUp to 5

years 0 - 49 50 - 99 100 + 0 - 49 50 - 99 100 +

Base 911 236 249 27 37 196 58 108TotalYears doing

business overseas 100% 100% 100% 100% 100% 100% 100% 100%

Within last two years 10% 34% 3% 0% 0% 1% 0% 1%

2-5 years 21% 63% 12% 11% 11% 3% 0% 0%

6-10 years 32% 0% 84% 89% 89% 9% 9% 6%

11-20 years 11% 0% 0% 0% 0% 31% 36% 13%

More than 20 years 25% 0% 0% 0% 0% 56% 55% 80%

Dont know/refused/Considerers 1% 3% 0% 0% 0% 1% 0% 1%

There was a statistically significant difference in the longevity of conducting business

overseas of IP active companies compared to non-IP active companies. IP active

companies were more likely to have been conducting business overseas for a longer

period of time than non-IP active companies. This is consistent with the proportion of IP

active firms in the sample increasing with the age of company (Table 16). Thus, this

result does not necessarily indicate that IP activity increases with the number of years ofoverseas experience; it may be driven by the age profile of IP active firms in the sample.


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Table 45: Number of years doing business overseas by IP activity6-10 years 10+ years

TotalUp to 5

years 0 - 49 50 - 99 100 + 0 - 49 50 - 99 100 +

Base 457 107 90 17 26 97 37 83IP activeYears doing



2-5 years ago 17% 60% 7% 6% 15% 4% 0% 0%

6-10 years ago 29% 0% 90% 94% 85% 7% 5% 6%

11-20 years ago 12% 0% 0% 0% 0% 33% 30% 13%

More than 20 years ago 31% 0% 0% 0% 0% 54% 65% 78%



100% 100% 100% 100% 100% 100% 100% 100%


2-5 years ago 24% 65% 15% 20% 0% 1% 0% 0%

6-10 years ago 36% 0% 81% 80% 100% 11% 14% 4%

11-20 years ago 9% 0% 0% 0% 0% 29% 48% 12%



There was a statistically significant difference in the longevity of conducting business

overseas of UKTI users compared to non-UKTI users. UKTI users were more likely to

have been conducting business overseas for a longer period of time than non-UKTI

users. Almost a third (31%) of UKTI users had been conducting business overseas for

more than twenty years compared to just over one in ten (11%) non-UKTI users. This is

consistent with the proportion of UKTI users in the sample increasing with the age of

company (Table 17).

Table 46: Number of years doing business overseas by UKTI usage6-10 years 10+ years

TotalUp to 5

years 0 - 49 50 - 99 100 + 0 - 49 50 - 99 100 +

Base 621 135 148 18 24 154 46 96UKTI usersYears doing



2-5 years ago 18% 65% 10% 6% 13% 3% 0% 0%

6-10 years ago 30% 0% 86% 94% 88% 8% 11% 3%

11-20 years ago 11% 0% 0% 0% 0% 28% 35% 13%




100% 100% 100% 100% 100% 100% 100% 100%


2-5 years ago 27% 59% 15% 22% 8% 2% 0% 0%

6-10 years ago 38% 0% 81% 78% 92% 12% 0% 25%

11-20 years ago 9% 0% 0% 0% 0% 43% 42% 17%



However, PIMS data shows that less than one-quarter of UKTI clients have beenconducting business overseas for more than 20 years. PIMS also shows that only 16%

of UKTI clients have been conducting business overseas for 6-10 years, compared to


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30% in this survey. These differences may partly be due to some of the sampling

anomalies highlighted earlier in the chapter such as over sampling of: older and larger

firms; firms in the production sector; and firms with more experience of overseas

markets as measured by self-assessment and number of markets.

Table 47: Comparison of number of years experience in overseas markets by UKTI usagewith client profiles from PIMS 12-15 and 7-10 and PIMS non-user surveys of 2008 and2009

Total

UKTI non-

users

UKTI

users

PIMS non-

users 2009

Users

PIMS 12-

15

PIMS non-

users 2008

Users

PIMS 7-10

Base 290 621 300 3985 302 3143Years doing

business overseas 100% 100% 100% 100% 100% 100%

Within last two years 13% 9% 5% 15% 5% 17%

2-5 years ago 27% 18% 19% 16% 36% 21%

6-10 years ago 38% 30% 26% 16% 30% 15%

11-20 years ago 9% 11% 26% 15% 13% 16%

More than 20 years ago 11% 31% 21% 23% 12% 23%

Not currently exporting - - 2% 13% 2% 7%

Not applicable 2% 1% - - - -

4.9 Exper ience: Born Globals

The following table shows the proportion of companies that are defined as born

global. In this context born globals were defined as firms which have been

established for up to 5 years and have been doing business since they were established.

Nearly a quarter (23%) of these internationalising companies were born global, whichis higher than the proportions from the 2008 survey of one in ten companies (10%)

which were born global. Whereas in the 2008 survey born globals accounted for

about half the sample firms which had been established in the last five years; in the

2009 survey, they accounted for 88% of these younger firms. This may reflect bias in

the survey sample towards

international business strategies, barriers and awareness survey (2010) - full report

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