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2016: More Europe, more International, more Digital

26. December 2016
The year of International digitalization.    
2016: More Europe, more International, more Digital

An exciting year for the evolution of Spanish international trade is coming to an end. Thanks to the highest general economic growth with a 3% rise of GDP, we are once again leaders in Europe in terms of economic growth, and it has been interesting to see that exports have become a driving force for this growth. The foreign trade sector has been one of the most important elements that have helped Spain to overcome the recession.

Exports are growing 1.3% YoY, while in the Eurozone in general they dropped 0.4%, and 1.1% in the European Union. Exports in France also fell (-1.4% YoY), and in the UK (-4.8%); they grew in Germany (0.8%) but less than in Spain. 

But this time the trade balance has been positive for many quarters.

As a result, from January to August 2016 the trade deficit reached €11 billion, 31.6% less than last year and the second best figure for the January-August period since 1997. The cover rate reached 93.8%, up 2.7% on 2015 (91%), and second best figure recorded and only exceeded by the total for 2013.

By geographic area we can see how exports to the EU (66.3% of the total) increased by 4.5% in the first eight months of 2016, compared to the same period last year. As for sales, in the EU they rose by 5.6%, about 14% of the total.

The unfavorable situation of emerging countries, however, caused exports to third countries (33.7% of the total) to fall by 4.4% over the same period, with significant drops in exports to important markets like Latin America, North America and the Middle East.

We must consider how the digital world helps growth in foreign trade, and how internet is helping in this new situation. New technologies facilitate access to foreign markets beyond the traditional set-up of trade fairs-distributors, where people have to be physically present. Now it is all about contacting potential consumers using international digital marketing and if possible establish a business relationship that is as direct as possible.

E-commerce, either directly on Spanish companies’ websites and online stores or via marketplaces like Amazon, Booking or Solostocks, gives us a new scene with new opportunities available not only to major exporting companies but also to any SME who wishes to embrace them and have a competitive advantage when selling its products in any market.

It is hard to understand digital internationalization in Europe without being overwhelmed by Amazon Europe’s figures, who expects to bring profits of €22 billion in 2016. A new scene in which that turnover is not only the turnover of Amazon itself but also indirectly of thousands of SMEs that use the marketplace as a sales channel and have turned it into the main online sales website in Europe.

Technology is helping many sectors to cut out the middleman. Spanish companies are now able to reach consumers directly in strong sectors like fashion, footwear and agri-food products. It gives manufacturers and producers an unprecedented chance to strengthen their relationship with their clients, improve their profit margins and plan a direct sales strategy, with no middlemen.

There are still things that need improving, obviously. There is still a digital divide in business, which means that Spanish companies are less digitalized than consumers, and often less than their competitors in the English-speaking world. The situation in France is quite similar – every day French companies lose digital market share to British or German companies, and B2B is especially low compared to what you would expect from a fairly digitalized economy like France.

We are therefore coming to the end of a year of consolidation of international digitalization, in which important steps have been taken towards the consolidation of a Digital Single Market in Europe. What was just a dream a few years ago has become an undeniable necessity.

Demanding challenges require joint efforts and the success we need will only be possible with efficient public-private partnerships; and small, medium-sized and large companies and the administrations will need to come up with a coordinated action plan, and ICEX will have to lead the way in this transformation.

Leonard Pera

General Manager at Open-Ideas

President of International Commission AUTELSI.

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