2012 has started with the same economic uncertainty that 2011 ended with and the UK needs to look for Partners around the world that are growing fast that can supplement the UKs existing relationships in Europe and US. The Commonwealth’s emerging markets are the obvious choice, our pre-existing relationships make doing business together easier and similar institutions and business methods can bring the cost of doing business down by up to 20%. Most Commonwealth Countries will grow at over 5% this year and all represent colossal opportunities for British companies.
Historically, Britain used to count countries such as New Zealand, India, Australia, Singapore and Canada among its leading trading partners.
Since joining the European single market, Germany, France, Holland and Belgium have assumed far greater importance to us while only five Commonwealth countries struggle to make it onto the list of top 25 export destinations.
However times could be changing. The latest overseas trade statistics show the biggest increase in exports are to our Commonwealth partners and if trends continue they are set to play a far more important part in our economic life.
In the 12 months up to the end of September our exports to India – roaring ahead with 9% growth – increased by a whopping 33.5% compared with the same period a year earlier.
Exports to Canada jumped 18.3% in the same period and those to Australia were up 30% while those to South Africa rose by 31%.
These are good improvements but there is massive potential in the Commonwealth and Britain should be at the forefront taking advantage of it.
Showing posts with label UK. Show all posts
Showing posts with label UK. Show all posts
Tuesday, 10 January 2012
Thursday, 24 November 2011
India and the UK
India and the UK have a long established partnership that manifests in many ways; the links between our 2 countries are strong and healthy and there is much room to grow.
In 2010, bilateral trade between the UK and India grew by 20%, bringing the total to £13 billion. UK goods exports to India grew by 37% and goods imports from India rose by 27%. However, despite an overall growth in exports from the UK, the country’s comparative position has been slipping. In 2005 the UK was the 5th largest exporter to India, whereas the UK is now the 18th largest exporter. India is the 13th largest export market for the UK, while the UK is India’s 5th largest export market, accounting for 3.6% of all India’s exports. There is a general view that the relationship is under –utilised.
The potential for growth in trade and investment between the UK and India is huge as reflected by Indian Prime Minister Manmohan Singh when declaring last year that the 2 countries ‘should aim at the doubling of our bilateral trade turnover in the next five years’. However as the British Prime Minister David Cameron summed it up while in India ‘we cannot rely on sentiment and our shared history’ to make this happen.
1) Firstly, UK companies operating in India
2) Secondly, Indian Companies that use the UK as a base to raise capital and to operate abroad
3) Thirdly, related to the Second point, but Indian companies that operate in Britain, but are fully engaged with the UK’s economy.
Britain in India
British Business has a strong presence in India and has for many years. Many of the UK’s big names are present, Arup, Mott Macdonald, Serco, Amec, JCB and Unilever.
The success of the expanding Indian economy is widely acknowledged by UK investors. The most recent being the set up of ‘India Gas Solutions’ by BP and Reliance Industries in a $7.2billion investment focused on global sourcing and marketing of natural gas in India. This is one of the largest ever foreign investments into India and clearly demonstrates the continuing importance of each country to the other.
As access to India’s services sector grows, I have absolutely no doubt that the UK will jump up the league table of bilateral trade and investment flows almost overnight. The India-EU trade pact that is reportedly to be completed in the New Year should help with this.
India in the UK
Of all the Indian Companies operating in the European Union there are more in the UK than the other 26 EU nations combined. The London Stock exchange is host to 31 listed companies, 20 more than New York, and many more than Singapore and Hong Kong. Most of the Indian companies operating here do so to take advantage of the City of London as a financial Hub, as an access point to Europe and as a Geographical bridge between the East and the West. I hope this will remain the case in the future.
Essar Energy is a good example of a fast growing company that used London in this way; they raised US$2 billion through an initial public offering in May 2010.
I believe that if we want such partnerships between India and the UK to grow and strengthen, then the City of London’s pre-eminence must be protected. With regards to the proposed ‘Tobin Tax’, the UK’s strong stance against it is sensible. If the British Government gives an inch by way of the financial services tax they will lose a mile in international business.
The Second Category of Indian Company operating in the UK are the fully engaged ones – like TATA.
Tata is now the UK’s biggest manufacturer, with almost 40,000 workers. When including Tata's service industries, such as consultancy, the Company is the largest private sector employer in the UK.
This is a Model that can be especially fruitful for both countries. Key to ensuring this is converting the Indian Companies that are in London to take advantage of the City into fully integrated Companies along the Tata Model.
There is also great scope for synergy with high end engineering design and mass marketing. It is what James Dyson did in China, but the only problem is that Dyson products are now made in China without any involvement from Dyson due to weak IP regulation. This would not happen in India.
Tata has demonstrated how profitable working with a pre-existing British firm can be by buying into existing brands. Let the British design and the Indians scale up.
In reality, India and the UK have an existing partnership that will continue to grow slowly on its own, but if we want to turn it into a true 21st Century Partnership it requires a catalytic intervention from Governments and the private sector. The ‘sea change’ that both Governments called for during David Cameron’s visit to India last year will not happen unless the relationship is managed and developed actively. I would like to see more direct involvement from top Indian and British business leaders.
In 2010, bilateral trade between the UK and India grew by 20%, bringing the total to £13 billion. UK goods exports to India grew by 37% and goods imports from India rose by 27%. However, despite an overall growth in exports from the UK, the country’s comparative position has been slipping. In 2005 the UK was the 5th largest exporter to India, whereas the UK is now the 18th largest exporter. India is the 13th largest export market for the UK, while the UK is India’s 5th largest export market, accounting for 3.6% of all India’s exports. There is a general view that the relationship is under –utilised.
The potential for growth in trade and investment between the UK and India is huge as reflected by Indian Prime Minister Manmohan Singh when declaring last year that the 2 countries ‘should aim at the doubling of our bilateral trade turnover in the next five years’. However as the British Prime Minister David Cameron summed it up while in India ‘we cannot rely on sentiment and our shared history’ to make this happen.
1) Firstly, UK companies operating in India
2) Secondly, Indian Companies that use the UK as a base to raise capital and to operate abroad
3) Thirdly, related to the Second point, but Indian companies that operate in Britain, but are fully engaged with the UK’s economy.
Britain in India
British Business has a strong presence in India and has for many years. Many of the UK’s big names are present, Arup, Mott Macdonald, Serco, Amec, JCB and Unilever.
The success of the expanding Indian economy is widely acknowledged by UK investors. The most recent being the set up of ‘India Gas Solutions’ by BP and Reliance Industries in a $7.2billion investment focused on global sourcing and marketing of natural gas in India. This is one of the largest ever foreign investments into India and clearly demonstrates the continuing importance of each country to the other.
As access to India’s services sector grows, I have absolutely no doubt that the UK will jump up the league table of bilateral trade and investment flows almost overnight. The India-EU trade pact that is reportedly to be completed in the New Year should help with this.
India in the UK
Of all the Indian Companies operating in the European Union there are more in the UK than the other 26 EU nations combined. The London Stock exchange is host to 31 listed companies, 20 more than New York, and many more than Singapore and Hong Kong. Most of the Indian companies operating here do so to take advantage of the City of London as a financial Hub, as an access point to Europe and as a Geographical bridge between the East and the West. I hope this will remain the case in the future.
Essar Energy is a good example of a fast growing company that used London in this way; they raised US$2 billion through an initial public offering in May 2010.
I believe that if we want such partnerships between India and the UK to grow and strengthen, then the City of London’s pre-eminence must be protected. With regards to the proposed ‘Tobin Tax’, the UK’s strong stance against it is sensible. If the British Government gives an inch by way of the financial services tax they will lose a mile in international business.
The Second Category of Indian Company operating in the UK are the fully engaged ones – like TATA.
Tata is now the UK’s biggest manufacturer, with almost 40,000 workers. When including Tata's service industries, such as consultancy, the Company is the largest private sector employer in the UK.
This is a Model that can be especially fruitful for both countries. Key to ensuring this is converting the Indian Companies that are in London to take advantage of the City into fully integrated Companies along the Tata Model.
There is also great scope for synergy with high end engineering design and mass marketing. It is what James Dyson did in China, but the only problem is that Dyson products are now made in China without any involvement from Dyson due to weak IP regulation. This would not happen in India.
Tata has demonstrated how profitable working with a pre-existing British firm can be by buying into existing brands. Let the British design and the Indians scale up.
In reality, India and the UK have an existing partnership that will continue to grow slowly on its own, but if we want to turn it into a true 21st Century Partnership it requires a catalytic intervention from Governments and the private sector. The ‘sea change’ that both Governments called for during David Cameron’s visit to India last year will not happen unless the relationship is managed and developed actively. I would like to see more direct involvement from top Indian and British business leaders.
Thursday, 10 March 2011
Public Sector Reform in the UK
In the UK currently much of the political discourse is centred on reducing Britain's Deficit and the Government's cuts in spending and the resulting impact on public services. However there is a second quite interesting stream to the government's plans that is receiving less media attention, the reform and the enhance role of the private sector in public services.
The UK has led in the past on enhancing the role business plays in the public sector, throughout the 80s it was the privatisation of unities, something that many other countries have emulated since. In the 90s and early 2000s it was the UK that led the way on Public Private Partnerships with PFIs, this initiative is also used increasing abroad and the UK is one of the world's largest providers of experts in this field.
The UK has a history of innovative public sector reform and this next round proposed by the Prime Minister David Cameron has the opportunity to be in the same vein. Plans to open government contracts up to SMEs rather than just large Corporates, for example, is sensible, it allows the country's largest employing sector access to the country's largest buyer. And widening the role the Private Sector can play in the provision of services will increase competition and hopefully improve quality at a time when government is decreasing spending.
If well implemented, this round of reform could well be emulated across the globe like the past.
The UK has led in the past on enhancing the role business plays in the public sector, throughout the 80s it was the privatisation of unities, something that many other countries have emulated since. In the 90s and early 2000s it was the UK that led the way on Public Private Partnerships with PFIs, this initiative is also used increasing abroad and the UK is one of the world's largest providers of experts in this field.
The UK has a history of innovative public sector reform and this next round proposed by the Prime Minister David Cameron has the opportunity to be in the same vein. Plans to open government contracts up to SMEs rather than just large Corporates, for example, is sensible, it allows the country's largest employing sector access to the country's largest buyer. And widening the role the Private Sector can play in the provision of services will increase competition and hopefully improve quality at a time when government is decreasing spending.
If well implemented, this round of reform could well be emulated across the globe like the past.
Wednesday, 15 December 2010
MSMEs and the Commonwealth
Small companies are the life blood of all Commonwealth economies. In the UK, for example, MSMEs account for 99% of all businesses. As much as 50% of the UK’s workforce is employed by companies employing less than 100 people and on average 65% of all new jobs are created by MSMEs each year.
As the UK looks to export its way out of recession greater emphasis is being placed on helping to internationalise MSMEs, as only the most innovative and competitive MSMEs will succeed in international markets. A strategy that focuses on supporting fast growing and innovative MSMEs internationalise will reap disproportionately large returns for all countries involved. India in particular is seen as an enormous potential market for MSMEs, but so far UK companies have struggled to penetrate the market.
India has continually demonstrated an ability to nurture its own MSMEs into national and international corporations, almost all the major Indian companies have developed from humble origins within living memory. India is therefore an important market for international MSMEs looking to win new business and for those countries looking to learn how they can support and develop their own MSMEs.
Doing business with another Commonwealth country can be up to 20% less expensive than doing business with non-Commonwealth countries as a result of the ‘Commonwealth Factor’. These factors are of disproportionate advantage to MSMEs, so the Commonwealth relationships can play a key role in developing international MSMEs that will help drive growth and job creation across the 54 member countries of the association.
As the UK looks to export its way out of recession greater emphasis is being placed on helping to internationalise MSMEs, as only the most innovative and competitive MSMEs will succeed in international markets. A strategy that focuses on supporting fast growing and innovative MSMEs internationalise will reap disproportionately large returns for all countries involved. India in particular is seen as an enormous potential market for MSMEs, but so far UK companies have struggled to penetrate the market.
India has continually demonstrated an ability to nurture its own MSMEs into national and international corporations, almost all the major Indian companies have developed from humble origins within living memory. India is therefore an important market for international MSMEs looking to win new business and for those countries looking to learn how they can support and develop their own MSMEs.
Doing business with another Commonwealth country can be up to 20% less expensive than doing business with non-Commonwealth countries as a result of the ‘Commonwealth Factor’. These factors are of disproportionate advantage to MSMEs, so the Commonwealth relationships can play a key role in developing international MSMEs that will help drive growth and job creation across the 54 member countries of the association.
Monday, 12 July 2010
UK aid commitments
I support the UK’s International Development Secretary, Andrew Mitchell’s decision to relook at the at the UK’s aid commitments to the BRIC countries (Brazil, Russia, India and China). This money can now be shifted more towards countries with a greater need, and less ability to help themselves.
Also, I again urge the Minster to examine the way in which aid is spent, there must be a shift over the next few years to aid that supports growth and aims to increase the involvement of the private sector, allowing national governments to pay for their own social infrastructure. While the shift cannot be uniform, many of the poorest countries will still need support in social areas; there are other middle income countries that can begin the shift towards growth centred aid, so that they may hopefully follow in the BRIC’s footsteps.
Also, I again urge the Minster to examine the way in which aid is spent, there must be a shift over the next few years to aid that supports growth and aims to increase the involvement of the private sector, allowing national governments to pay for their own social infrastructure. While the shift cannot be uniform, many of the poorest countries will still need support in social areas; there are other middle income countries that can begin the shift towards growth centred aid, so that they may hopefully follow in the BRIC’s footsteps.
Friday, 9 July 2010
Vince Cable's Industrial Policy
I am pleased to note that Vince Cable the UK’s new Business secretary is adopting a more market orientated industrial policy than we have been used to in recent years. Mr Cable has describe an industrial policy that funds public goods such as, research, education and infrastructure but does so in a way that is market led rather than state led.
While recognising that the state has an important role in supporting areas and sectors where the UK has a competitive advantage, Mr Cable is rolling back the support offered to individual firms and factories. Instead the department for Business favours investing in the support for increasing the UK’s human and intellectual capital. In the long term backing training and research in the UK is the only sustainable way of increasing employment and growth in the UK.
Vince Cables Business Department is also continuing the push to force the nationalised banks to increase their levels of lending, this is very welcome. The current lack of available credit in the UK economy is stifling the Critical SME sector that will be vital for bringing down levels of unemployment.
Vince Cables new approach to Industrial policy in the UK is very welcome as it positions the private sector at the heart of the British economy while not forgetting the important areas in which the state needs to support the wider economy.
While recognising that the state has an important role in supporting areas and sectors where the UK has a competitive advantage, Mr Cable is rolling back the support offered to individual firms and factories. Instead the department for Business favours investing in the support for increasing the UK’s human and intellectual capital. In the long term backing training and research in the UK is the only sustainable way of increasing employment and growth in the UK.
Vince Cables Business Department is also continuing the push to force the nationalised banks to increase their levels of lending, this is very welcome. The current lack of available credit in the UK economy is stifling the Critical SME sector that will be vital for bringing down levels of unemployment.
Vince Cables new approach to Industrial policy in the UK is very welcome as it positions the private sector at the heart of the British economy while not forgetting the important areas in which the state needs to support the wider economy.
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