The role of global trade in Levelling Up the UK

The Levelling Up agenda promises to transform growth, productivity, and living standards outside London and the South East. Yet with no new funding, we must think about the mix of drivers of economic prosperity and to look beyond UK borders. A key ambition of Levelling Up must be for businesses across the UK to generate growth from international markets; the domestic economy alone cannot create the levels of sustainable growth required.

Despite only 10% of UK businesses trading overseas, exports generate 28% of UK GDP. This figure was closer to 31% pre-pandemic. Internationalisation is therefore central to economic success. But the regional disparities are stark. The North East, North West, and Yorkshire and the Humber regions combined make up less than 15% of UK exports. London alone makes up over 26%.

International trade is a part of everyone’s lives, from the products we consume to our economic performance as a country. A truly globalised UK economy can increase output and productivity for all, boost living standards through high-quality jobs, and create thriving multicultural regions.

This matters for individual businesses as well as the wider regional economies they sit in. For firms that export, not only can finding new global markets accelerate growth, but productivity and innovation gains can be achieved. And the pandemic showed that companies trading with multiple markets were more resilient with diversified risk.

It’s not been easy with the supply chain crunch and adjusting to new trade barriers with the EU. At the CBI, we continue to work with government on these issues. But we must also have one eye on long-term growth. With the right ambition and support, UK businesses can capitalise on their competitive strengths and find new customers for their goods and services across Europe and further afield.

How can global trade deliver for Levelling Up in practice?

Crucially this must be about international competitiveness, not about regions and nations across the UK competing with one another. Essentially, increase the size of the pie rather than dividing it up differently. One way to drive this is by growing nascent clusters and attracting inward investment, becoming global leaders in industries of the future such as green tech, FinTech, or AI.

There are a range of initiatives to help businesses get the information they need including a new government helpline, the Export Support Service (ESS). The focus now must be on delivery and maximising uptake. The Levelling Up White Paper rightly points to raising an export mindset across the country. We need more of a national conversation on the benefits of international trade, showcasing successful companies so that all businesses with potential to scale up globally can do so. New trade deals can help but only if companies know how to use them.

The CBI will work with companies of all sizes across the UK to maximise their international success, in turn delivering benefits at home outlined above. The CBI's Seize the Moment campaign aims to better enable companies to find new global markets, including through mentoring and an improved digital offer.

As we emerge from the pandemic, now is the time to go global for growth. If the UK gets that right, it will help make Levelling Up a reality.