How Cultural Differences are Hindering Exports

27 июля 2021, 14:33

Deep-rooted problems in British businesses, such as the poor language skills of UK exporters, are continuing to hinder international trade. Cultural differences affect exports, and following the UK’s departure from the European Union (EU), this impact may worsen. However, businesses can overcome cultural barriers by educating themselves and improving their foreign language skills. The more UK businesses understand the cultures of the international companies they are working with, the easier trade will become.

UK Exporters Less Likely to Speak a Second Language

Numerous factors such as social, legal, technological, political, and environmental events impact relations between international trading businesses. While many of these factors cannot be controlled, social factors like cultural variations that characterize how business is conducted in one country, in comparison with another, can be mediated through education and upskilling staff.

In 2018, Yuki Takara of Hokkaido University, Japan, published a paper in the Journal of Cultural Economics that outlined how the trade of goods is promoted by cultural familiarity. The study’s findings revealed that cultural differences have the power to influence trading decisions, as well as the volume of goods traded. The data highlighted the importance of understanding cultural differences to efficiently facilitate international trade.

Unfortunately, British businesses are at a disadvantage when compared to their European counterparts. Language is a key factor that adds to cultural differences, and UK citizens are less likely to speak a foreign language, with only around a third of Britons claiming to do so. Citizens of EU member states, on the other hand, are more likely to speak a foreign language, with two-thirds speaking at least one additional language. Moreover, other European countries are far better equipped to handle international business, with 97% of Swedish citizens and 96% of those in Denmark, Latvia, and Lithuania speaking a foreign language. Meanwhile, only 18% of Britons consider themselves multilingual.

Overcoming Cultural Differences to Benefit Business

For many SMEs in the UK, cultural differences seem hard to overcome. Often, businesses do not have the resources to educate their staff or even the confidence to pursue international trade due to language barriers.

However, there are many reasons why British SMEs should remain hopeful. British products are still held in high regard internationally, and the growth of e-commerce is positioned to support trade. It is advisable that SMEs attempt to incorporate foreign language skills into their teams, either by hiring those with bilingual or multilingual skills or dedicating resources to providing cultural education.

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