The measurement of export readiness of companies in South Africa

Abstract

The improvement of international trade, and therefore increasing exports, is an important subject of discussion for policymakers. An increase in exporting is seen as critical for the development of any country, by ensuring economic growth and development. The literature implies that potential exporters lack the knowledge of the complexity of exporting their products. It is thus firstly extremely important for companies to determine whether they are 'export ready' before they attempt any export operation. Therefore companies need to have the necessary factors in place for the company to be able to export successfully. The overall aim of the study was to indicate how any firm can determine whether it is ready to export or not by comparing its operations to the essential key factors of export readiness. Therefore, the purpose of the study was to outline the various factors that are necessary in the operations of a company for it to be defined as 'export ready'. These factors range from motivational and organisational factors to target market and product considerations. Thereafter the various trade barriers were outlined to inform companies of the impact these trade barriers may have on their potential export activities. These barriers vary from tariff to non-tariff barriers and other barriers relating to internal perceptions. In understanding the trade barriers, potential exporters will feel more at ease at attempting to export and will not feel restricted by them. Government assistance plays an important role in helping companies determine their export readiness and also creating an awareness of trade barriers. Government promotion in other countries was outlined together with the assistance provided by the South African government. By comparing these it became possible to provide clear recommendations to improve the role and quality of South African government assistance. The empirical study was done in an attempt to improve the export readiness questionnaire used by Trade and Investment South Africa (TISA). Various questionnaires from other countries and institutions were examined in order to create a pilot questionnaire, which TISA piloted to 30 potential exporters. The results from this was statistically analysed and the results were examined. By examining the results as well as the questionnaires from other countries, it was possible to create a recommended short export readiness questionnaire to be used by TISA in their programme of assisting potential exporters. The importance of the contribution made through this study lies in the identification of a limited number of key components to which companies should adhere to in order to be successful in the export markets.