David Dixon, C4DTI

Digitalisation has been transforming businesses across all industries, but small and medium enterprises (SMEs) have proven hesitant to adopt digital enablers, particularly when it comes to digital trade.

 The passage of the Electronic Trade Document Bill (ETDB) will release huge benefits in terms of data accessibility and increased efficiency. It is key that could allow the UK SME market streamline their daily operations and optimize their entire end-to-end supply chain ecosystems, leading to a substantial increase in profit margins. However, this will only be realised if the businesses are aware and most importantly are animated enough to act and fully exploit this once in a lifetime opportunity.

We must take full advantage of this opportune moment to:

  • Encourage existing traders to trade more
  • Re-engage lapsed traders
  • And perhaps most crucially, we must convince those who have never traded to do so.

With the Tees Valley being home to the recently established Centre for Digital Trade and Innovation (C4DTI), its location and demographics perhaps offers the best start point for the UK digital trade journey.

Why is this?

Statistically, the Tees Valley has some of the lowest business density numbers, business start-up rates and exporting numbers across the UK. Added into this mix, the region shows a higher-than-average business failure rate.

To positively affect the aforementioned, International Trade must be front and centre. It of course is never that simple as there are many other variables at play, but one thing is for certain, the absolute numbers (600 exporters from a business stock of 17,600) must dramatically improve.

To understand both business perception and the reality of trade, as well as the opportunities presented by ETDB, Teesside University’s DigitalCity initiative is working in conjunction with the Centre for Digital Trade and Innovation to conduct an intrinsically important market research exercise. The insights gained from this research will provide direction and a clear mandate, but crucially, the brilliant byproduct is the awareness raising and intrigue will certainly occur.

Although we can anticipate some of the responses, this primary research will provide the strategic lynchpin for the Centres growth plan and will help to identify specific issues such as time constraints, financial barriers, skills gaps, digital literacy, regulatory obstacles, and/or psychological and cultural conundrums.

Despite the undeniable benefits that come with digitalisation, there are still several barriers that are holding SMEs back from fully embracing the digital trade revolution. It is vital that we have validation on what these are, how important they are to businesses and have a true understanding of the complexities involved in breaking them down.

A significant part of the research will focus on enterprises with links to the newly established Tees Valley Freeport, including those that supply goods and services to the freeport community or are involved in the production of products that trade through the port.

In order to provide a fair and proportional representation, the research will involve SME’s and intermediaries from various sectors, reflecting different levels of digital adoption.

The exercise will roll out in two key stages.

Initially, there will be a mapping of SMEs involved in key Tees Valley sectors and trade. Interviewing intermediaries, business support and networking organisations such as Department for Business and Trade, the Tees Valley Freeport and Combined Authority, local membership bodies such as the North East of England Processing Cluster, the North East Chambers of Commerce and the Tees Port Users Association.

This stage will help identify which businesses are trading, what they are trading and how they are accessing trade finance in the present non-digital trade environment. 

The second phase will give opportunity to conduct in-depth interviews with a cohort of around twenty companies. It is anticipated that this will support the development of in-depth trusted qualitative conclusions to sit alongside the robust quantitative ones.

The research conclusions will go on to inform the Centre for Digital Trade and Innovation’s partners and stakeholders for the ongoing development of the Tees Valley testbed, future skills and educational requirements, and will feed into conversations with other public and private sector organisations, including financial institutions.

Ultimately, this exercise is a vital step in transforming the way the world trades over the next decade by helping to identify the barriers to digital adoption for SMEs and informing the development of solutions to overcome these barriers.