3. 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
4.
5. One 25 year goal
100,000 additional private sector
jobs!
7. Why we focused on these priorities?
• They are specific and relevant to our
circumstances
AND
• They will have the greatest impact on
long term economic health and jobs
growth
AND
They are open to influence – we can
have an impact
8. 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
10. 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
11. Our goals for international trade
1. Get those businesses who are currently actively trading
overseas to expand into new markets
2. Encourage those who are occasional or accidental
exporters to adopt trade as a core element of their
business growth plans
3. 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.
12. Our goals for international trade
We 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
13. 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, value
Research 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
14. We and they, your potential new customers,
need YOU!!
16. 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
18. The Government’s ambition for
international trade
Presented by Rob Lewtas
Rob Lewtas – C2C LEP Meeting 20th March
19. 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 challenge
Rob Lewtas – C2C LEP Meeting 20th March
20. The challenge & economic rationale for boosting exports
The Challenge...
To double the UKTI client base from
25,000 to 50,000 clients by 2015
Rob Lewtas – C2C LEP Meeting 20th March
21. Why should companies export
Companies that
export are 11% more
likely to stay in
business
Rob Lewtas – C2C LEP Meeting 20th March
23. 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 advantage
Rob Lewtas – C2C LEP Meeting 20th March
25. 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 regions
Rob Lewtas – C2C LEP Meeting 20th March
26. ITA Locations
LONDON X2
8 ITAs within the C2C
Patch
Rob Lewtas – C2C LEP Meeting 20th March
27. 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’s
Rob Lewtas – C2C LEP Meeting 20th March
28. 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 Manager
Rob Lewtas – C2C LEP Meeting 20th March
29. 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
32. Coast to Capital: Attitudes and Barriers
to International Trade
International Trade Conference 20th March 2012
33. 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
34. 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
35. Exporter
Characteristics
• 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
36. Exporter
Characteristics
“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
37. 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
38. 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)
39. Number of Actives
Actives
Nots Prospects 19,000 to 40,000
full and partially
active (11% -
22%)
42. 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
43. 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.
44. Markets
The 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
45. Markets
Coast to Capital: Attitudes and Barriers to International Trade
46. Could some exporters be
encouraged to do more?
Export Activity as a % of Annual Turnover
(Proportion of Firms)
Coast to Capital: Attitudes and Barriers to International Trade
47. Growth Performance
Coast to Capital: Attitudes and Barriers to International Trade
48. Growth Prospects
Coast to Capital: Attitudes and Barriers to International Trade
49. 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.
63. Coast to Capital: Attitudes and Barriers
to International Trade: Part 2
International Trade Conference 20th March 2012
64. Part 2: Prospects and
Services
Prospects
•Potential customers (Prospects)
•What is holding them back
•A bit about born globals and mid sized businesses
Services
•Advice sought
•Current provision
•What we found in our research.
65. 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
66. Number of Prospects
Prospects Actives
19,000 -
Nots 40,000 full and
17,900 -26,850 partially active
(10%-15%) (11%-22%)
67. Prospects
Main reasons holding C2C companies back from
exporting:
• 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
68. Comments on Barriers
“The biggest barrier is they just don’t realise the opportunity and its
perceived to be a lot of hassle” “Knowledge – pure and simple – it’s
the fear factor – international trade may be an easy way to expand
but 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 (when
exporting 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 many
think the timing is not right, or would take so long to see results etc”
Coast to Capital: Attitudes and Barriers to International Trade
69. 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
70. ‘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’
71. 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
72. Services
What do businesses want from you?
Coast to Capital: Attitudes and Barriers to International Trade
73. What services are
exporters 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
74. What distinguishes exporting
owner 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?
75. Where do Businesses go for
Information/Advice?
Coast to Capital: Attitudes and Barriers to International Trade
76. Who is providing advice
in C2C?
Coast to Capital: Attitudes and Barriers to International Trade
77. What did we find
locally?
• 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
78. Case studies: Trade
Bodies
• 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
79. Case studies: Other
Areas
• 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
80. 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
94. Forecasts constructed at a regional level
as...
NORTH AMERICA
CARIBBEAN & LATIN AMERICA
EAST ASIA UK & CHANNEL ISLANDS
SOUTH ASIA IRELAND
AFRICA REST EU
MIDDLE EAST & CENTRAL ASIA EASTERN EUROPE
AUSTRALIA PACIFIC OTHER SHORT HAUL
96. ...time of ideal slots differ by region
Estimated 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 A4
Domestic
D1 A1 D2 A2 D3 A3
Short Haul
US East A D
Coast
D
US West
A
Coast
A D
Caribbean
A D
Africa
Middle A1 D1 A2 D2 A3 D3
East
A1 D1 A2 D2
Far East
D
South
A
America
97. ...different regional growth rates and
LGW market share
AAGR% to 2018 and 2008 LGW market share
by 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
100. 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 on
existing routes
• Work to increase aircraft size
• Better use of current and future airport assets – year round operations
• Remember slot availability will diminish !!
103. Fully
Active
19,000 Markets
ASSETS
Partially
ACTIVES Active
10,000+ Sectors
Born
Globals Size
3,800
BARRIERS
Younger
17,000
firms
to
25,000
Coasting
PROSPECTS Mid-
SERVICES
Attitude
band
for
Firms
growth
300
104. WHAT SHOULD BE DONE?
Inform Stimulate Collaborate Coordinate
To make sure SMEs To get more To encourage cost To make more
are well informed current non- effective network effective use of the
about the benefits exporters to and collective support that is
of trade explore approaches from available
AND international trade SMEs and service
Providers of AND providers
support services To make sure
know who support providers
potential clients offer services
are and what they which overcome
want initial barriers
105. Questions
1. 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?
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.