Cto c int trade conference 22 march 2012 combined presentationsPresentation Transcript
INTERNATIONAL TRADE CONFERENCE 20th March 2012 Welcome
Iain ShepherdCoast to Capital Board Member
What is Coast to Capital• One of a national network of Local Enterprise Partnerships• Partnerships between the private and public sectors, with business in the leadership role• Purpose is to drive growth – private sector growth• Re-balance the economy – reduce dependence on public sector jobs, reduce dependence on narrow group of financial and business services• Aims are long term• Role is strategic, not delivery• Focus on where we can add value and make most difference• Key facts about our area are in your pack
One 25 year goal100,000 additional private sector jobs!
Two strategic priorities:Internationalisation Enterprise & Entrepreneurship
Why we focused on these priorities?• They are specific and relevant to our circumstancesAND• They will have the greatest impact on long term economic health and jobs growthANDThey are open to influence – we can have an impact
Coast to Capital – 5-year Goals• Creation of an additional 4,500 new businesses and growing them• Increasing the number of internationally trading businesses by 4,000• The creation of 20,000 additional private sector jobs
InternationalisationThree strands3.International Trade5.Foreign Direct Investment6.International Business Tourism
International trade• What you may not know about our area…… – Shoreham Company, Ricardo was once a “One-Man Band” – Croydon was the first Airport with ATC – Brighton Born Sir Martin Ryle – Radio Telescope – Purley – Alexander Montgomery Low – Radio Guidance – Addiscombe – Frederick George Creed – Teleprinter & SWATH• We believe every business is capable of international trade
Our goals for international trade1. Get those businesses who are currently actively trading overseas to expand into new markets2. Encourage those who are occasional or accidental exporters to adopt trade as a core element of their business growth plans3. Persuade current non-traders to explore international trade and take the first steps. Most will need input from external experts to help them overcome their real and perceived barriers to trade.
Our goals for international tradeWe have the assets to achieve the goals:• Gatwick Airport and excellent connections• Shoreham & Newhaven Ports• Great business base with strong sectors which have propensity to export• Great providers of services• Great higher education and innovation infrastructure
But we need to understand the market• Segment and target where impact will be highest• Where are existing traders - ACTIVES• Where are the most probable new traders - PROSPECTS• Quantify – numbers, valueResearch today will help illuminate• But we already know the order of scale of what we are trying to achieve is well in excess of what has gone before• Tackle a new and challenging part of the market
We and they, your potential new customers, need YOU!!
Segmenting the marketKCC/BSK/SOA NOTS PROSPECTS ACTIVES
At the end of today’s session you should:• Understand more about the market for your services in our area• Appreciate the characteristics of potential new market segments• Consider how we can build demand for the services you offer
Rob LewtasUKTI South East
The Government’s ambition for international trade Presented by Rob LewtasRob Lewtas – C2C LEP Meeting 20th March
Topics to cover today • The challenge & economic rationale for boosting exports • The benefits of exporting • Who are UKTI • What we are doing to meet the challengeRob Lewtas – C2C LEP Meeting 20th March
The challenge & economic rationale for boosting exports The Challenge... To double the UKTI client base from 25,000 to 50,000 clients by 2015Rob Lewtas – C2C LEP Meeting 20th March
Why should companies export Companies that export are 11% more likely to stay in businessRob Lewtas – C2C LEP Meeting 20th March
Why Export ?Rob Lewtas – C2C LEP Meeting 20th March
Economic Benefits • Local benefits – More sustainable businesses – Local direct jobs – Supply chain opportunities • National benefits – Improved balance of payments – positive contribution to growth – Improved competitive advantageRob Lewtas – C2C LEP Meeting 20th March
UKTI OverviewRob Lewtas – C2C LEP Meeting 20th March
UKTI Overview • Responsible for Inward Investment & International Trade Support • 2,400 staff • 1,300 overseas • 99 UK Embassies, High Commissions, Consulates and Trade Offices; and around • 400 Advisers and support staff in nine English regionsRob Lewtas – C2C LEP Meeting 20th March
ITA Locations LONDON X2 8 ITAs within the C2C PatchRob Lewtas – C2C LEP Meeting 20th March
What are we doing to do to achieve our new goals • Finance – UK Export Finance changes – Appointment of regional UK Export Finance Specialist Advisor • Trade Missions – – high level support – Increased efforts on trade shows and industry sector events • High Value Opportunities – Tier #1 support – Supply chain development through dialogue with Tier#1’sRob Lewtas – C2C LEP Meeting 20th March
What are we doing to do to achieve our new goals • “GREAT” Campaign • YELL.com • White label brochure • Increased outreach to partners • Commercial diplomacy support • International Trade Fora • Companies House export guide to all new registrants • Partner Relationship ManagerRob Lewtas – C2C LEP Meeting 20th March
Our Challenge To double our client base from 25,000 to 50,000 clients by 2015 Less than 40% of SME’s know of UKTI What can we do differently or what can we do better to achieve this?Rob Lewtas – C2C LEP Meeting 20th March
Thank you…Rob Lewtas – C2C LEP Meeting 20th March
Karl DalgleishShared Intelligence
Coast to Capital: Attitudes and Barriers to International Trade International Trade Conference 20th March 2012
Part 1: Exporters• Summary of our brief• Characteristics of exporters and barriers to exporting• Number of active exporters• Exporters by size band• Export propensity by sector and spatial context• Export markets and value• Growth prospects Coast to Capital: Attitudes and Barriers to International Trade
Study Aims• Analysis of trade data• Research into attitudes of SMEs to international trade• Analysis of services required to move non-exporters into exporters• Parallel activity: – Trade Body Study (Si) and – Exporter Business Survey (TBR) Coast to Capital: Attitudes and Barriers to International Trade
ExporterCharacteristics• Tend to be larger and older than non-exporting firms• Sectoral differences are important• Exporting propensity differs across the UK• International outlook amongst managers important• Innovative firms more likely to export• Most tend to internationalise reactively Coast to Capital: Attitudes and Barriers to International Trade
ExporterCharacteristics “Outward facing, new ideas and open to business” “Knowledge based, high IP content, innovative, niche businesses” Coast to Capital: Attitudes and Barriers to International Trade
Barriers to exporting• Vary by export maturity – Non-exporters (Fear, cost, information/knowledge, culture, ambition) – Exporters (Legal, contract and regulatory barriers) • More barriers when entering high growth or non EEA markets • Barriers don’t decline as firms become more experienced overseas they just change • Innovative, growth aspirers and born globals often report more barriers Coast to Capital: Attitudes and Barriers to International Trade
Numbers• Different studies find different export propensities depending on sector and business size: – Using the findings of a BIS study on small business suggests exporters account for 21.6% of companies in C2C (40,070 firms) – Current C2C survey suggest 10.5% (19,000 firms) – Recent further C2C survey result falls in the mid-point• Which is right? Highly likely the range reflects the variance in the intensity of exporting behaviour• Higher number likely to include larger proportion of less intensive exporters (Active but partial exporters)
Number of Actives Actives Nots Prospects 19,000 to 40,000 full and partially active (11% - 22%)
Estimated C2C Exportersby sizeband
Sectors• The big sectors: production and finance and insurance• …followed by business administration; transport and storage; accommodation and food services; and professional, scientific and technical• C2C survey shows a number of manufacturing strengths and computer and related activities
Spatial Context• Large proportion of trade in the Gatwick Diamond area reflecting range and number of global companies• Don’t underestimate rural areas early figures are showing strong performance reflecting advanced manufacturing capabilities.
MarketsThe total value of C2C Exports is estimated to be £13.6bn - 42% of the GVA of the C2C economy Coast to Capital: Attitudes and Barriers to International Trade
Markets Coast to Capital: Attitudes and Barriers to International Trade
Could some exporters beencouraged to do more? Export Activity as a % of Annual Turnover (Proportion of Firms) Coast to Capital: Attitudes and Barriers to International Trade
Growth Performance Coast to Capital: Attitudes and Barriers to International Trade
Growth Prospects Coast to Capital: Attitudes and Barriers to International Trade
Observations• There are 19,000 to 40,000 full and partially active companies involved in trade (11-22%)• The key exporting sectors in C2C include manufacturing and business services• Although larger firms tend to export there’s a large number of small and micros exporting too• Like UK C2C firms rely on export wealth from EU and North America but appear to perform better in BRICs/CIVETs• Economic contribution of exporters overall is substantial but scope to support growth amongst some exporters.
1 Naoroji St, London WC1X 0GB 020 7756 7600www.sharedintelligence.net email@example.com
Coast to Capital: Attitudes and Barriers to International Trade: Part 2 International Trade Conference 20th March 2012
Part 2: Prospects andServicesProspects•Potential customers (Prospects)•What is holding them back•A bit about born globals and mid sized businessesServices•Advice sought•Current provision•What we found in our research.
Prospects• If you ask directly only 3% of non exporters say they are planning to start exporting (TBR)• But if you ask if they are planning or want to grow their business the answer is 36% (BIS SME Barometer Feb 2011)• In a recent C2C survey of young businesses - 23% (41,170 firms) plan to start trading• 12% of women business owners consulted in a parallel enterprise survey (21,480 firms)• 10-15% is our best estimate of non-traders who are PROSPECTS
Number of Prospects Prospects Actives 19,000 - Nots 40,000 full and 17,900 -26,850 partially active (10%-15%) (11%-22%)
ProspectsMain reasons holding C2C companies back fromexporting:• not knowing how to start exporting• a preference to concentrate on the UK market• lack of knowledge in how to sell to foreign markets• need to develop the (UK) business before starting to export. Coast to Capital: Attitudes and Barriers to International Trade
Comments on Barriers“The biggest barrier is they just don’t realise the opportunity and itsperceived to be a lot of hassle” “Knowledge – pure and simple – it’sthe fear factor – international trade may be an easy way to expandbut the barriers in terms of fear are still there and people need to be educated about how you can operate abroad” “SMEs face barriers to exporting in terms of language (whenexporting to non-English speaking countries) and barriers in the form of regulations and foreign taxation”. “No resistance per se, but perceived risk is a big issue in current economic climate, many businesses are ‘hunkering down’. Easier potential markets are perceived to (all) be in turmoil, thus manythink the timing is not right, or would take so long to see results etc” Coast to Capital: Attitudes and Barriers to International Trade
Comments on Barriers (II)““Exports can be a route to success or a route to disaster as exporting can be costly and risky for small firms.”“Once they get more sophisticated its about managing risk- will I get paid? and is someone going to steal my IP?” “Fearful of the unknown, the Euro, cost of exporting etc” “Air Passenger Duty – expensive compared to Europe – local businesses facing enormous costs” Coast to Capital: Attitudes and Barriers to International Trade
‘Born Global’ Firms• Massive technological advances mean a new era of accelerated globalisation• More entrepreneurs are considering internationalising• Many experience ‘accelerated internationalisation’• 2.1% South East firms in this category: implies there may be some 3,800 C2C ‘born globals’
Mid Sized Businesses• Whilst there are many micros there are some UK 10,000 firms neither ‘large’ nor SMEs• Only 0.2% of the UK’s business base but account for 20% of employment and turnover• MSBs tend to export at a lower intensity than smaller firms but we know there are major MSBs in the C2C area already exporting• Possibly 300 such coasting firms in C2C• This is a cohort that should be performing better
Services What do businesses want from you? Coast to Capital: Attitudes and Barriers to International Trade
What services areexporters interested in?• Workshops with others with similar interests (e.g. markets, types of product) (31%)• Detailed guides on specific export topics eg: identifying/engaging agents, specialist insurance, legal systems, delivered via web/print format (29%)• Face to face guidance and support (26%)• Attendance on trade missions (19%)• Access to subsidised export guarantees/financing (19%). Coast to Capital: Attitudes and Barriers to International Trade
What distinguishes exportingowner managers?• The key differentiating factor: – Managers who run trading businesses tend to have had some kind of significant international experience – in work or other parts of their lives – Those who run non-exporting firms tend not to have this experience• Observation: can we give them the missing experience?
Where do Businesses go forInformation/Advice? Coast to Capital: Attitudes and Barriers to International Trade
Who is providing advicein C2C? Coast to Capital: Attitudes and Barriers to International Trade
What did we findlocally?• Clarity around C2C assets. Events suggest perceived willingness to export but mixed capabilities• Not so many provision gaps but scope for better integration and coherence• Appetite for better co-ordination and clarity of offer• Signpost help for all but focus on prospects & partials• Awareness: excite and inspire - “demystify the export process” - and stimulate market making activity. Coast to Capital: Attitudes and Barriers to International Trade
Case studies: TradeBodies• We spoke to 29 trade bodies - nearly half (13) provide international trade services• Tends to be a fundamental / important part of what they do• Almost all have a base in C2C area or London and the South East• Services: case studies, links, information, market intelligence• Trade events, networking and lobbying role.• They are keen to collaborate Coast to Capital: Attitudes and Barriers to International Trade
Case studies: OtherAreas• Focusing efforts on new exporters and a ‘coalition of the willing’ is a feature of comparator programmes• Desire to stimulate the market to provide services: – In others areas sectoral bodies, intermediaries and advisors are all seen as part of the solution – But early days as the landscape has changed so much• Complementary provision, cross referral and getting wider stakeholders involved in export agenda. Coast to Capital: Attitudes and Barriers to International Trade
Reminder – What have we learnt about our new customers?• 19,000 -40,000 full and partial international traders (ACTIVES) and 17,000 to 25,000 PROSPECTS• Exporters: – Their markets imply sophisticated offer – They’ll pay and their prospects are improving – Turnover could be increased for some – Being born global a real possibility for many new firms• NOTs: – Aspiration, lack of exposure/experience a big deterrent – Information, networking and support would encourage them… Coast to Capital: Attitudes and Barriers to International Trade
1 Naoroji St, London WC1X 0GB 020 7756 7600www.sharedintelligence.net firstname.lastname@example.org
Paul HancoxSenior InternationalCommercial Manager HSBC
Simon Edwards Airline BusinessDevelopment Manager Gatwick Airport
Competing to grow and become London’s airport of choice
Our shareholders 42% 15.9% 12.7% 12.1% 17.3% Global investors with GIP as controlling shareholder
Route Development – LGW Competing!
Forecasts constructed at a regional levelas...NORTH AMERICACARIBBEAN & LATIN AMERICAEAST ASIA UK & CHANNEL ISLANDSSOUTH ASIA IRELANDAFRICA REST EUMIDDLE EAST & CENTRAL ASIA EASTERN EUROPEAUSTRALIA PACIFIC OTHER SHORT HAUL
Allocation at Gatwick – S11 - Totals 95SOURCE: LGW A CL
...time of ideal slots differ by regionEstimated time of future slot demand by region 040 050 060 070 080 090 100 110 120 130 140 150 160 170 180 190 200 210 220 230 240 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 D1 A1 D2 A2 D3 A3 D4 A4Domestic D1 A1 D2 A2 D3 A3Short HaulUS East A D Coast DUS West A Coast A DCaribbean A D Africa Middle A1 D1 A2 D2 A3 D3 East A1 D1 A2 D2Far East D South AAmerica
...different regional growth rates and LGW market shareAAGR% to 2018 and 2008 LGW market shareby region 4.4% 4.2% 3.3% 3.0% 2.6% 2.4% 2.4% 2.4% 76.7% 47.3% 31.3% 27.0% 17.4% 0.9% 6.3% 11.4% Domestic Rest EU Other Short North America CarLA East Asia South Asia MECA Haul LGW 2008 Market Share AAGR% 2008 to 2018
Summary of our Key Priorities• More non EU and Long Haul traffic• Continue to attract new long haul carriers• Focus on un / underserved markets to offer traveller choice• Increase in key business routes offered also grow frequency onexisting routes• Work to increase aircraft size• Better use of current and future airport assets – year round operations• Remember slot availability will diminish !!
Fully Active 19,000 Markets ASSETS PartiallyACTIVES Active 10,000+ Sectors Born Globals Size 3,800 BARRIERS Younger 17,000 firms to 25,000 CoastingPROSPECTS Mid- SERVICES Attitude band for Firms growth 300
WHAT SHOULD BE DONE? Inform Stimulate Collaborate CoordinateTo make sure SMEs To get more To encourage cost To make moreare well informed current non- effective network effective use of theabout the benefits exporters to and collective support that isof trade explore approaches from availableAND international trade SMEs and serviceProviders of AND providerssupport services To make sureknow who support providerspotential clients offer servicesare and what they which overcomewant initial barriers
Questions1. How can we encourage more existing traders (the ACTIVES) to do more and move into new markets?3. How can we encourage current non-traders (the PROSPECTS) to start trading for the first time and what are the barriers faced by businesses new to international trade?5. What is the scope for collaboration between service providers across the private, public and third sectors and how can Coast to Capital help make this happen?