International Manifesto

INTERNATIONAL MANIFESTO

One of the stated priorities for the Greater Cambridge and Greater Peterborough Local Enterprise Partnership is internationalisation and one of the initiatives is to make 2014 the "Year of Exporting"  In this short blog I will try and lay out the most important structural issues that I think need to be addressed.

The traditional UKTI model is well intentioned but is fatally flawed.  Some really excellent people but doing the wrong things.  It would be very interesting to understand the UKTI budget for the the GCGP LEP area and our share of the overseas "in-country" resources.  Government funding for trade and investment (and UKTI) for the LEP area should go to the LEP board where it could be allocated far more efficiently to either UKTI or to private providers. We have a lot of very talented private sector providers and country specialists who are not being encouraged

The existing model is far too simplistic.  Currently trade is really all about sending goods out of the country with some arbitrary targeting to regions and markets.  About 60% of UK trade is with Europe but all the UKTI resources and events are focussed on very difficult and remote markets - normally as the result of a political whim. There is an arbitrary split between Trade and Investment and in fact the Investment activity has been completely outsourced and hived off to PA consulting. 

So when an overseas enquiry comes in about an overseas mission to the UK, PA consulting makes an arbitrary decision about which region to recommend.  In the past we used to see lots of overseas missions but now we see none. These visitors are potential trading partners not just people looking to set up a UK office.  We need good intelligence about all overseas visits into the UK to pitch our LEP area against other LEP areas and when there is a visit within the region we need to know about it and connect local companies into the visit.

Internationalisation is about trade in physical goods, services and knowledge but really only the export of physical goods is properly supported (very badly).  The Chamber of Commerce provides some support for export paperwork but this can be quite limited. There are four levels of physical exporting. Sending parcels through the likes of DHL, TNT or Royal Mail.   Shipping ISO containers through Felixstowe or the new London Gateway and ULDs through Stansted, East Midlands or Heathrow.  Setting up an overseas in-country distributor or even opening an office yourself in the country.  This type of granularity is not understood or differentiated within the UKTI offer.

Services are equally difficult to quantify and properly support.  Education services must be one of the biggest exports from our region with one of the longest and most profitable paybacks. Nobody accounts for say an an Indian student coming from India to study at Cambridge University.  Where does that appear in the trade figures ?

The Knowledge economy is not really understood or supported by UKTI.  ARM is probably the biggest exporter  in Cambridge but it only exports Intellectual Property in the form of technical designs for electronic chips and these are probably emailed to the customer.  Probably doesn't even appear on any UK trade figures and never crosses a physical customs border.  These type of knowledge products are no longer the exception - they are the rule.

To support our knowledge economy we need representative offices in all the global science and high technology clusters.  Early spotting of innovation and sources of funding and encouraging these businesses to set up in our region seems to be the key.  We must be seen as highly collaborative and being fully integrated. Companies from the LEP region have their offices in all the important world markets and they can be providing us valuable intelligence and even co-working space for visiting trade missions.

As any exporter knows - funding of overseas expansion can be really difficult.  There are significant structural problems with finance and we are seeing a retrenchment of financial services back into the UK. The banks are ready and willing to help but we are not properly articulating what is really required.  Maybe we need some new financial models.

A real focus on the sectors and future industries that we want to build in the LEP area must be properly represented within our internationalisation agenda.  Getting our overseas embassies and overseas offices to set up "no cost" video conferencing facilities like Google Hangouts with International Hangout hubs in all our Science Parks and Innovation Centres would be transformational.  Social Media like innovation has no borders but we must be promoting our way of working or we will find ourselves excluded.  For instance Chinese companies are now adopting their own social media brands and we are naturally excluded.

The other huge opportunity for our region is to be seen as the gateway to the rest of Europe - so that Asian or North American businesses see our LEP region as the best place to set up their European HQ or distribution centre.  We used to have very good air travel to European business hubs but now there is virtually nothing and like most other businessmen in the region I have to use London City Airport or the Channel tunnel out of St Pancras

We have incredibly poor information and have absolutely no statistics about the GDP or Balance of Trade figures for our region.  We don't even know the number of companies who are "exporting" goods, services or knowledge.  I suspect that we are actually doing very well but with some structured improvement we could be world class.

We have a vast amount internationalisation expertise in the region but we need to harness it in an effective manner. I hope this manifesto stirs the type of discussion that we need and results in tangible action

#trade #commerce #international

written by Richard Wishart