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Cto c int trade conference 22 march 2012 combined presentations
 

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  • The Coast to Capital mission is to provide joint public and private sector leadership to drive sustainable private sector led growth and job creation across an area reaching from Brighton & Hove to Croydon and including the Gatwick Diamond and West Sussex. We will do this by boosting enterprise and embedding an even stronger enterprise culture. We will also increase international trade by helping current international traders to trade more and inspiring more businesses to trade internationally. In so doing we will realise every person and place’s potential.
  • Clients to be given handout copies of slides NOW. (3 per page with notes spaces) Please make sure your name is added to the slide and that the date is added to the footer on each slide.
  • Purpose and structure
  • HVO’s Identify projects offering the most value to the UK; Support UK businesses in developing and implementing strategies to win contracts in and around HVOs; Bring together expertise from across our network, alongside private sector business specialists. Build strong relationships with key UK businesses able to deliver against these opportunities, facilitating the development of partnerships/consortia where appropriate. Participation in the programme is open to businesses of all sizes. Lead contracts will often be won by larger companies, but there will also be huge supply chain opportunities for smaller companies.
  • HVO’s Identify projects offering the most value to the UK; Support UK businesses in developing and implementing strategies to win contracts in and around HVOs; Bring together expertise from across our network, alongside private sector business specialists. Build strong relationships with key UK businesses able to deliver against these opportunities, facilitating the development of partnerships/consortia where appropriate. Participation in the programme is open to businesses of all sizes. Lead contracts will often be won by larger companies, but there will also be huge supply chain opportunities for smaller companies.
  • Clients to be given handout copies of slides NOW. (3 per page with notes spaces) Please make sure your name is added to the slide and that the date is added to the footer on each slide.
  • Barriers (conventional eg fear factor and specific eg IP) Markets: (indigenous links eg E EU, Africa, US/EU, BRICs including SA) high intensity medical manufacturers and HTM eg BMW Food and Drink SLE Brazil Architects Mott Mac, ARUP
  • Barriers (conventional eg fear factor and specific eg IP)
  • As I am sure you will be aware already………. – companies in London & SE more likely to export than the rest of the UK (excluding NI) - with manufacturers significantly more likely to export than companies in other sectors – in response to inquiries from potential customers. Tend to be larger and older than non-exporting firms Sectoral differences are important Exporting propensity differs across the UK International outlook amongst managers is important Innovative firms more likely to export Most tend internationalise reactively
  • As I am sure you will be aware already………. – companies in London & SE more likely to export than the rest of the UK (excluding NI) - with manufacturers significantly more likely to export than companies in other sectors – in response to inquiries from potential customers. Tend to be larger and older than non-exporting firms Sectoral differences are important Exporting propensity differs across the UK International outlook amongst managers is important Innovative firms more likely to export Most tend internationalise reactively
  • Note corruption act and fact not hugely different from what we found Most prevalent relate to the formalities and bureaucracy of doing business overseas, Older firms are slightly less likely to have experienced any significant barriers when doing business overseas. There are no consistent differences by size of firm in this respect, but smaller firms are slightly more likely to experience information barriers. There is some evidence that the likelihood if experiencing customs, contacts and language & cultural barriers increases as firms become active in more regions. Interestingly, innovative and IP active firms report more barriers to overseas trade. Interestingly, firms with substantial growth aspirations are more likely to encounter significant barriers, suggesting that they are most in need of external assistance. It is also apparent that firms that sell directly to overseas customers are less likely to come across significant barriers than those adopting alternative modes. Generally, those using contractual arrangements and operating overseas sites are most likely to report each of the types of barrier. Based on the above analysis, there are significant variations in the type and extent of barriers experienced in different markets. Legal & regulatory barriers - Customs barriers 24% 30% 21% - Contacts barriers 33% 46% 27% - Information barriers 16% 18% 14% - Resource barriers 20% 29% 17% - Language & cultural barriers 18% 23% 15% - Bias barriers Benefits Level of growth otherwise not possible 41% 56% 36% - More fully utilising capacity 36% 49% 31% - Exposure to new ideas 31% 41% 27% - Increased lifespan of products/services 30% 35% 28% - Improved profile or credibility
  • This
  • This
  • 93% of exporters have less than 20 employees 0.75 0.11 0.07 0.04 0.02 0.01 0.01 1.00 TBR Survey: Whilst a small proportion of businesses which have 0 to 4 employees export (8.6%), this size band is the largest in terms of firm numbers making it also the biggest export base (see Table 2). The trend across firm size shows that export activity is more likely as firms increase in size, with businesses employing more than 250 people most likely to export (31.6%). The results from the survey suggest that firm need to reach an optimal employee size before exporting or that exporting drives growth (e.g. micro SMEs exporting and consequently growing in size). Those businesses currently not exporting but looking to do so acknowledging that their business needs to develop first before they can start exporting.
  • Within these broad sectors, a number of sub-sectors are driving export activity, these include a number of manufacturing sub-sectors and computer related activities. The most export orientated sub-sector apparent in the analysis is Computer and Related Activities (54%) which includes software and IT services (see Table 4).
  • Tend to be larger and older than non-exporting firms Sectoral differences are important Exporting propensity differs across the UK International outlook amongst managers is important Innovative firms more likely to export Most tend internationalise reactively
  • Tend to be larger and older than non-exporting firms Sectoral differences are important Exporting propensity differs across the UK International outlook amongst managers is important Innovative firms more likely to export Most tend internationalise reactively
  • This is the equivalent of 42% of the GVA of the C2C economy- that’s why its important – up to a fifth of businesses contributing up to 2 fifths of producttivity £6.2bn £0.45 £2.6bn 0.194039641 £1.8bn 0.131743108 £1.1bn 0.082158031 £0.6bn 0.046914693 £0.5bn 0.039419621 £0.4bn 0.027320115 £0.3bn 0.025172657
  • This is the equivalent of 42% of the GVA of the C2C economy £6.2bn £0.45 £2.6bn 0.194039641 £1.8bn 0.131743108 £1.1bn 0.082158031 £0.6bn 0.046914693 £0.5bn 0.039419621 £0.4bn 0.027320115 £0.3bn 0.025172657 As with UK the most common overseas markets that firms in the Coast to Capital LEP area export to are the EU (89%), USA or Mexico (49%) and the Middle East (43%). The strong proportions of firms which export to Middle Eastern Countries (43%) and the BRIC (Brazil, Russia, India and China) economies (38%) is perhaps advantageous for the Coast to Capital LEP area, with penetration of these markets seen to be poor by UK firms according to CBI research (which shows that around 4% of the UK’s exports go to the high-growth BRIC economies).
  • 5476.8 less than 5% Tbr 7,240 firms who export intermittently or reactively Export activity as a % of Annual Turnover (Proportion of Firms)
  • 44% increased a lot or a little 47% increase a lot or a little 15% decrease to 8% decrease Table 7 shows how a significant proportion of firms have seen export activity stay the same (42%) over the past three years. However, whilst only 15% have seen their turnover decrease, a higher proportion (44%) has seen their levels of exports increase over the last three years. Over the next 12 months (Table 7), the picture is more positive with around 8% of firms expecting a decline and 47% expecting an increase in export activity. Within this expected increase, almost 20% are expecting export activity to increase by more than 10%. However, a significant proportion (45%) of firms are expecting export activity to remain the same. In investigating which factors are holding back businesses in the Coast to Capital LEP from generating more export business, the largest proportion (20%) indicated ‘nothing’ suggesting that perhaps there was a lack of ambition or future plan. However, other factors cited included the costs involved in exporting (17%) and preference to focus on the UK market, the time and resources, company size, and foreign competition (all 10%).
  • 44% increased a lot or a little 47% increase a lot or a little 15% decrease to 8% decrease Table 7 shows how a significant proportion of firms have seen export activity stay the same (42%) over the past three years. However, whilst only 15% have seen their turnover decrease, a higher proportion (44%) has seen their levels of exports increase over the last three years. Over the next 12 months (Table 7), the picture is more positive with around 8% of firms expecting a decline and 47% expecting an increase in export activity. Within this expected increase, almost 20% are expecting export activity to increase by more than 10%. However, a significant proportion (45%) of firms are expecting export activity to remain the same. In investigating which factors are holding back businesses in the Coast to Capital LEP from generating more export business, the largest proportion (20%) indicated ‘nothing’ suggesting that perhaps there was a lack of ambition or future plan. However, other factors cited included the costs involved in exporting (17%) and preference to focus on the UK market, the time and resources, company size, and foreign competition (all 10%).
  • There are nearly 5,500 exporters who’s proportion of export related turnover is very small Tend to be larger and older than non-exporting firms Sectoral differences are important Exporting propensity differs across the UK International outlook amongst managers is important Innovative firms more likely to export Most tend internationalise reactively
  • Aim of scheme - To offer an initial consultation for SMEs and start-ups with an ICAEW Chartered Accountant free of charge To date 2,034 firms equating to 2,825 offices signed up including KPMG, a number of mid tier and 4 international sole practitioners! Others joining. Fourteen launches around UK, including Northern Ireland Media campaign built in conjunction with ICAEW Chartered Accountant 79 local media opportunities over 5 weeks Interviews on national and local radio stations by ICAEW President Launched BAS and ICAEW’s Export Guide at The National Challenge: SMEs Exporting and Growth conference on 10 November Developing a relationship with BBA Plan is to have BAS material in 10,000+ bank branches Advice Week late March 2012 Measurements Will undertake telephone survey in early 2012 with SMEs
  • Tend to be larger and older than non-exporting firms Sectoral differences are important Exporting propensity differs across the UK International outlook amongst managers is important Innovative firms more likely to export Most tend internationalise reactively
  • Thirty-six per cent of SME employers believe their turnover will be higher than it is currently in 12 months Time….. SME BUSINESS BAROMETER – FEBRUARY 2011 Tend to be larger and older than non-exporting firms Sectoral differences are important Exporting propensity differs across the UK International outlook amongst managers is important Innovative firms more likely to export Most tend internationalise reactively
  • This
  • These provide avenues for further exploration and need to be considered in line with other sector messages, including British Chambers backing for government support in identifying trade missions, more trade finance for export deals, and a strong UK presence at major global trade fairs.
  • We spoke to a number of intermediaries National barriers cited OMB are insufficient information eg who to contact how to approach a market fear the risk wont pay dividens; lack of available funds eg to research a market; security and political issues; corruption and IP – ideas being stolen.
  • Two interesting groups to highlight National level analysis is from: Harris & Li (2007) Born Global Companies: Evidence from FAME and CIS ‘ Born global’ companies can be defined as new firms (say less than five years old) and who began exporting within two years
  • Definition of a mid-sized business used by BIS is turnover between £25m and £500m per annum
  • These provide avenues for further exploration and need to be considered in line with other sector messages, including British Chambers backing for government support in identifying trade missions, more trade finance for export deals, and a strong UK presence at major global trade fairs.
  • When asked about the types of support that would assist in increasing export activity, firms note a preference for the following types of support, including: Workshops involving other companies with similar interests (e.g. markets, types of product) (31%). Detailed guides on specific export topics such as: identifying and engaging agents, specialist insurance, foreign legal systems, delivered via the web or in print format (29%). Face to face guidance and support (26%). Attendance on trade missions (19%). Access to subsidised export guarantees/financing (19%). These provide avenues for further exploration and need to be considered in line with other sector messages, including British Chambers backing for government support in identifying trade missions, more trade finance for export deals, and a strong UK presence at major global trade fairs. These provide avenues for further exploration and need to be considered in line with other sector messages, including British Chambers backing for government support in identifying trade missions, more trade finance for export deals, and a strong UK presence at major global trade fairs.
  • Lots of UK, EU and OECD research into characteristics of those business people who do international trade versus those that do not. Like all aspects of business growth comes down to the aspirations, ambitions and capabilities of the person/people running the firm. Exporters tend to have an international experience in their professional or other life – eg born overseas, =educated abroad, family abroad, have lived abroad, started career in a company that had international links So, should we be giving the PROSPECTS the missing international exposure???
  • We spoke to 29 Trade bodies. These provide avenues for further exploration and need to be considered in line with other sector messages, including British Chambers backing for government support in identifying trade missions, more trade finance for export deals, and a strong UK presence at major global trade fairs.
  • We spoke to 29 Trade bodies. These provide avenues for further exploration and need to be considered in line with other sector messages, including British Chambers backing for government support in identifying trade missions, more trade finance for export deals, and a strong UK presence at major global trade fairs.
  • We spoke to 29 Trade bodies. These provide avenues for further exploration and need to be considered in line with other sector messages, including British Chambers backing for government support in identifying trade missions, more trade finance for export deals, and a strong UK presence at major global trade fairs.
  • Social media/the internet important means of information
  • Good afternoon everyone. My name is John O'Mahony and I am a tax partner at Grant Thornton where I spend my time helping clients save tax and build wealth. Over the next 5 minutes I am going to share my thoughts on the key challenges faced by business's as they expand internationally. Although I am a tax partner you will be VERY relieved to here that tax structuring is not something I plan to focus on in this talk!! So why bother expanding internationally ? The current macro economic environment provides something of a paradox. Despite record low UK interest rates the domestic economy is weak and consumption remains low. So businesses need to look overseas for real growth opportunities. My one statistic for today is this - 11% of Germanys exports go to the BRIC economies. The UK lags well behind this at 4%. So what are the key challenges In my experience the key challenges faced relate to - planning - people and management (such as demands on management time, recruitment and maintenance of company culture) and - financing.
  • There is no one size fits all approach to international expansion but the first challenge I would raise is planning. Many business's initially expand internationally on a purely 'opportunistic basis' For example an overseas contract opportunity arises out of the blue. This opportunistic approach can often work very well and be the catalyst for significant international growth. However, it is absolutely clear to me that those business's that plan for international expansion and put in place a clear strategy reap the rewards in terms of profit and growth delivered. Its also interesting to note that many of the more opportunistic business's put in place a strategic plan further down the line.
  • The people and management challenges Another common challenge faced by business as they expand internationally relate to people and management issues. Expanding internationally can diverts senior management time away from core responsibilities which ultimately proves unsustainable in the longer term and can have a negative impact on overall performance. So how do the successful business's deal with this? Solutions include recruiting new senior executives for international operations; installing a second line of management at home to free up resources, giving international operations a degree of autonomy in the early stages (needs care) and sending trusted domestic managers to maintain day to day control and preserve the core business culture. It is critical that management and people issues are considered early and the regularly reviewed. Hiring the right people A related challenge is recruiting a skilled local workforce. Most businsess's recruit locally for their overseas units to overcome cultural hurdles, provide a grasp of the local market and competitive environment and to bring in new customers. Need to exercise caution needs to be taken when recruiting locally and it is best to look for referrals or consider recruiting directly from your competitors.
  • Financing international expansion In my experience a minority of firms seek to raise external funding and most prefer to self fund international expansion. International banks were found to be more accommodating and raising money in local currencies can help protect against exchange and interest rate fluctuations. Private Equity funding is also an option and can help focus expansion plans and provide access to financial and industry contacts. Business's are typically conservative when funding international expansion. However, with the benefit of hindsight some would say admit to having been overly cautious.
  • So in conclusion Business's that take a more measured, strategic approach to international expansion achieve higher profit growth and margins - so - plan for international expansion. There are many sources of advice and help. Accountants, bankers lawyer have there part to play but also take to Coast to Capital, UKTI and other business people that have been there and done it! Finally a plug. Grant Thornton have teamed up with Fast Track to look at the strategies of the 100 privately owned UK firms with the fastest growing international sales. The resulting research has been published in our new report, "Grow Global – a route to success", and represents a unique insight into how these companies have grown internationally and the lessons they have learned. Copies of the report are available today.
  • STEWART WINGATE

Cto c int trade conference 22 march 2012 combined presentations Cto c int trade conference 22 march 2012 combined presentations Presentation 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
  • 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 solutions@sharedintelligence.net
  • QUESTIONS
  • Refreshments
  • businessadviceservice.comCopyright © ICAEW 2011. All rights reserved.
  • Supporting growing Businesses Charles Carter, Director, Regions ICAEWBUSINESS WITH CONFIDENCE icaew.com
  • Where do SMEs get advice from? • What do they think they want? • What are the barriers? – arrogance – knowledge of sector • RealityBUSINESS WITH CONFIDENCE icaew.com© ICAEW 2012
  • What drives them to want support? • Fear • Growth - “M” out of SME Support from qualified advisors or friends?BUSINESS WITH CONFIDENCE icaew.com© ICAEW 2012
  • BUSINESS WITH CONFIDENCE icaew.com
  • BAS highlights since Q4 2011 • 2,500 firms signed up • Advertising campaign • Reactions from stakeholders • Potential partnershipsBUSINESS WITH CONFIDENCE icaew.com© ICAEW 2012
  • AdvertisingBUSINESS WITH CONFIDENCE icaew.com© ICAEW 2012
  • BUSINESS WITH CONFIDENCE icaew.com© ICAEW 2012
  • Taking forward BAS….. • BAS Advice week • Marketing • PartnershipsBUSINESS WITH CONFIDENCE icaew.com© ICAEW 2012
  • Karl DalgleishShared Intelligence
  • 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
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  • QUESTIONS
  • Coast to Capital International Trade Conference 20 March 2012 John OMahony, Tax Partner C2C International Trade Conference.pptx© 2011 Grant Thornton UK LLP. All rights reserved.
  • International expansion - a personal view Introduction •International expansion ….why bother? •Key challenges© 2011 Grant Thornton UK LLP. All rights reserved.
  • International expansion - key challenge I Planning •There is no one size fits all approach •Opportunistic vs. strategic growth© 2011 Grant Thornton UK LLP. All rights reserved.
  • International expansion - key challenge IIPeople and management challenges•Recruit executives for international operations•Give international operations local autonomy•Send trusted domestic managers to internationaloperation•Local recruitment•Culture© 2011 Grant Thornton UK LLP. All rights reserved.
  • International expansion - key challenge III Financing international expansion •Using own funds •Banks - domestic and international •Private Equity funding© 2011 Grant Thornton UK LLP. All rights reserved.
  • Conclusions • Be strategic and plan • Take advice and talk to business people who have been there and done it! • Grant Thornton - Grow Global Report© 2011 Grant Thornton UK LLP. All rights reserved.
  • 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
  • Gatwick seasonality Passengers by week 1,000,000 +103% 900,000 800,000 700,000 2 way Pax per Week 600,000 500,000 400,000 300,000 200,000 100,000 0 35 39 44 48 49 0 1 2 3 4 5 6 7 8 9 14 17 19 22 24 27 32 36 37 38 40 41 42 43 45 46 47 50 51 52 10 11 12 13 15 16 18 20 21 23 25 26 28 29 30 31 33 34 2010 2011 Week #Source: GAL Traffic Results (29/08/10 – 28/08/11)
  • Ground Products
  • 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 !!
  • Recent Success!!
  • Think Tank
  • 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?
  • NEXT STEPSInform Stimulate Collaborate Coordinate
  • Thank youLunch andnetworking