Small Business Survey Scotland: 2021

International exports

In 2021, 16 per cent of SME employers in Scotland reported that they had sold goods or services (including commissions, royalties and licences) internationally (outside of the UK) in the last 12 months, broadly unchanged from 2020 (15 per cent). This is also broadly in line with the UK as a whole (18 per cent).

The percentage share of medium sized businesses reporting that they had exported goods or services outside of the UK in the last 12 months (30 per cent) was double the percentage share for small and micro-sized businesses (15 per cent each).

International exporting (of goods or services) was most common in the Manufacturing (51 per cent) and Information/Communication (37 per cent) sectors. International exporting was least common in the Construction sector (nil) (Figure 1).

Figure 1: International exporters by sector, 2021

Base: all SME employers, 677 - Base minimum: Construction, 0

Don’t know: less than 0.5% of SME employers

In Scotland, the proportion of SME international exporters exporting to European Union (EU) countries was lower (73 per cent) than non-EU countries (81 per cent). The proportion of SME exporters exporting to both the EU and non-EU countries was broadly in line with the prior year. In the UK as a whole, a higher proportion of SME international exporters exported to EU countries (79 per cent) than non-EU countries (70 per cent).

Whilst Scotland saw a 10 percentage point increase in the proportion of SME exporters that had exported to the EU and non-EU between the 2020 (45 per cent) and 2021 (55 per cent) surveys, as mentioned above, this increase was not found to be statistically significant.

SME international exporters were asked for more detail on the non-EU markets they exported to (Figure 2). European Free Trade Association (EFTA) countries were the most common non-EU export market, with 31 per cent of international exporters selling goods or services there, higher than the UK as a whole (24 per cent). 43 per cent of SME international exporters exported to the USA, lower than the UK as a whole (40 per cent). Some 16 per cent sold to China, 25 per cent to Canada, 10 per cent to India, 8 per cent to Turkey, 6 per cent to South Korea.

Figure 2: Destination of exports, 2021

Base: SME employers that have exported internationally in the last 12 months, 117

Don’t know: 0% of SME international exporters

18 per cent of SME international exporters in Scotland exported to EU countries only while 27 per cent exported to non-EU countries only. 55 per cent exported to both EU countries and non-EU countries (Figure 3).

Figure 3: Destination of international exports, 2021

Base: SME employers that have exported internationally in the last 12 months, 117

Don’t know: 0% of SME international exporters

The majority of SME international exporters in Scotland (81 per cent) were established exporters, exporting for more than five years. 18 per cent had been exporting for five years or less. 1 per cent did not know how long they have been exporting for.

For 51 per cent of SME international exporters in Scotland, exports accounted for less than quarter of their business’s annual turnover. Exports accounted for between a quarter and half of turnover among 12 per cent of SME international exporters in Scotland. Exports accounted for more than 90% of turnover for 12 per cent of Scottish SMEs that exported goods or services in 2021. Shown in figure 4 below.

Figure 4: Turnover percentage from international exports, 2021

Base: Base: All Scottish SME Employers that export goods to overseas, 81

Don’t know: 8% of SME international exporters

Of those SME employers that were already exporting internationally, 43 per cent planned to increase their level of exports over the next few years.

Of those SME employers that were not currently exporting to countries outside the UK (84 per cent), the majority (68 per cent) reported that they had no plans to start exporting.

Exports to the rest of the UK

40 per cent of SME employers in Scotland reported that they sold goods or services to customers in other UK nations. This is slightly lower than 2020 (45 per cent) however this change was not found to be statistically significant).

Medium-sized firms (52 per cent) were more likely than average to have exported to the rest of the UK.

By sector, SME employers in Manufacturing (79 per cent), and Business Services (51 per cent) were more likely than average to have sold goods or services to the rest of the UK. Whereas, SME employers in Transport/Retail/Distribution (38 per cent), Construction (17 per cent) and Other Services (19 per cent) sectors were less likely than average to have sold to the rest of the UK.

International imports

22 per cent of SME employers in Scotland had directly imported goods or services from countries outside the UK in the previous 12 months, broadly in proportion in Scotland in the prior year (25 per cent). Medium-sized businesses (40 per cent) were more likely than average to import.

Of SME importers, 43 per cent of SME employers in Scotland only directly imported goods or services from the EU, lower than the  previous year (59 per cent) however this change was not statistically significant. Twenty-five per cent had imported from only non-EU countries in 2021, significantly higher than in 2020 (8 per cent).

Imports sources for Scottish SMEs are summarised below in Figure 5.

Figure 5: Import Sources by SME employers, 2021

Base: SME employers, 223

Imports from the rest of the UK

64 per cent of SME employers in Scotland reported that they bought goods or services from other UK nations, Whilst this figure appears higher than the previous year (56 per cent) this change was not found to be statistically significant.

Medium-sized businesses (88 per cent) were more likely than average to have imported goods or services from the rest of the UK. By sector, SME employers in the Manufacturing (94 per cent) and Transport/Retail/Distribution (57 per cent) sectors were more likely than average to import goods or services from the rest of the UK, whereas those in Construction (48 per cent) were less likely.