Last reviewed 15 April 2014
Public procurement of goods and services in 12 key emerging markets will almost triple to £452 billion by 2030, according to new research by the Confederation of British Industry (CBI).
However, if its market share stays the same, the UK will only capture £11 billion of this growth.
Procurement from overseas by developing countries has tended to focus on sectors with no domestic equivalent, the CBI points out, while other contracts have tended to go to domestic companies or public bodies.
The new research suggests, however, that public sector organisations in these countries will rapidly increase their purchase of goods and services, driven by the needs of ageing populations and a growing middle class.
The demand for services will grow at the fastest rate, by 6.1% each year, and will be worth £110 billion in 2030. China will lead the growth in public procurement with its market increasing by 7.4% each year. Indonesia and Turkey will also rapidly increase their spending by 6.2% and 6% respectively.
"This is a huge opportunity for UK businesses, which have an established track record in many key growth areas like health, transport and recycling. But winning public contracts in these countries is often an uphill battle, so firms need a leg up," CBI Chief Policy Director Katja Hall said.
She called on the Government to set up contracting agencies with priority markets, to help potential exporters navigate "the procurement maze".
"Politicians must guard against using rhetoric which could damage the reputation of the UK public services industry overseas," Ms Hall warned. "I want to see Ministers championing this important economic sector and to get to a point where CEOs of public services firms are just as readily invited on trade missions as manufacturers."