1. INTERNATIONAL TRADE
CONFERENCE
20th March 2012
Welcome

2. Iain Shepherd
Coast to Capital Board
Member

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

5. One 25 year goal
100,000 additional private sector
jobs!

6. Two strategic priorities:
Internationalisation
Enterprise &
Entrepreneurship

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

9. Internationalisation
Three strands
3.International Trade
5.Foreign Direct Investment
6.International Business Tourism

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!!

15. Segmenting the market
KCC/BSK/SOA
NOTS PROSPECTS ACTIVES

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

17. Rob Lewtas
UKTI South East

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

22. Why Export ?
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

24. UKTI Overview
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

30. Thank you…
Rob Lewtas – C2C LEP Meeting 20th March

31. Karl Dalgleish
Shared Intelligence

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%)

40. Estimated C2C Exporters
by sizeband

41. Sectors

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.

50. 1 Naoroji St, London WC1X 0GB 020 7756 7600
www.sharedintelligence.net solutions@sharedintelligence.net

51. QUESTIONS

52. Refreshments

53. businessadviceservice.com
Copyright © ICAEW 2011. All rights reserved.

54. Supporting growing Businesses
Charles Carter, Director, Regions ICAEW
BUSINESS WITH CONFIDENCE icaew.com

55. Where do SMEs get advice from?
• What do they think they want?
• What are the barriers?
– arrogance
– knowledge of sector
• Reality
BUSINESS WITH CONFIDENCE icaew.com
© ICAEW 2012

56. 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

57. BUSINESS WITH CONFIDENCE icaew.com

58. BAS highlights since Q4 2011
• 2,500 firms signed up
• Advertising campaign
• Reactions from stakeholders
• Potential partnerships
BUSINESS WITH CONFIDENCE icaew.com
© ICAEW 2012

59. Advertising
BUSINESS WITH CONFIDENCE icaew.com
© ICAEW 2012

60. BUSINESS WITH CONFIDENCE icaew.com
© ICAEW 2012

61. Taking forward BAS…..
• BAS Advice week
• Marketing
• Partnerships
BUSINESS WITH CONFIDENCE icaew.com
© ICAEW 2012

62. Karl Dalgleish
Shared Intelligence

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

81. 1 Naoroji St, London WC1X 0GB 020 7756 7600
www.sharedintelligence.net solutions@sharedintelligence.net

82. QUESTIONS

83. Coast to Capital International Trade Conference
20 March 2012
John O'Mahony, Tax Partner
C2C International Trade Conference.pptx
© 2011 Grant Thornton UK LLP. All rights reserved.

84. International expansion - a personal view
Introduction
•International expansion ….why bother?
•Key challenges
© 2011 Grant Thornton UK LLP. All rights reserved.

85. 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.

86. International expansion - key challenge II
People and management challenges
•Recruit executives for international operations
•Give international operations local autonomy
•Send trusted domestic managers to international
operation
•Local recruitment
•Culture
© 2011 Grant Thornton UK LLP. All rights reserved.

87. 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.

88. 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.

89. Paul Hancox
Senior International
Commercial Manager
HSBC

90. Simon Edwards
Airline Business
Development Manager
Gatwick Airport

91. Competing to grow and become
London’s airport of choice

92. Our shareholders
42%
15.9% 12.7% 12.1% 17.3%
Global investors with GIP as controlling shareholder

93. Route Development – LGW Competing!

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

95. Allocation at Gatwick – S11 - Totals
95
SOURCE: LGW A CL

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

98. 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)

99. Ground Products

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 !!

101. Recent Success!!

102. Think Tank

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?

106. NEXT STEPS
Inform Stimulate Collaborate Coordinate

107. Thank you
Lunch and
networking