Panel debate: UK missing a trick on exports
A leading a panel of experts has made clear the nature of the challenge for the UK to grow its export market
Speaking at the CBI Annual Conference, panellists included President of the CBI, Sir Roger Carr; Minister for Trade, Lord Green; Gary Lydiate, CEO of Kilfrost Group; Steve Varley, UK & Ireland Managing Partner, Ernst & Young; and David Bell, Chief Corporate Development officer at JCB.
Sky News presenter Jeff Randall, who chaired the debate, made clear that he does not believe the UK is meeting its potential on exports. "The UK has reached a record level gap of £9.8bn between imports and exports." He contrasted this with Germany, which currently has a surplus.
In his opening remarks, Sir Roger Carr acknowledged a gap existed and it was up to UK companies to "channel our resources into those markets that are growing at around 9%". Emphasis should be placed on accesing those high growth countries. "It's a challenge for those businesses that don't export to go out and try it but it's also up to government to help produce the roadmaps to help them do it and provide the kit ythe need to achieve it."
Speaking to an audience of over a thousand businesspeople and leading politicians, he emphasised the importance of looking overseas to find the growth needed in the UK. "Frankly, it's the only way out of the corner we find ourselves in."
Lord Green agreed and acknowledged the UK had a history of low achievement. "We have been, past tense, missing a trick. 47% of our exports go to the Eurozone. That fact alone shows we have a significant challenge the redress the balance. The government has a number of things to get right.
"The first thing is UKTI. I agree with the CBI report that we need to take it forward as the main supporter for UK work abroad. It needs to focus on three main categories - SMEs, HVOs (high value opportunities) and inward investment."
He also highlighted the need to reform commercial diplomacy overseas. "We're in a much better space than we were five years ago, let alone ten years ago, and there's now a real commercial nous in our foreign diplomatic circles." He stated that William Hague's foreign policy has three priorities - security, counsellor services and commercial diplomacy.
"There's a real determination to get this right in the civil service. We have a lot of work to do, no question, but we're on the case.
"We've got to encourage more SMEs to go abroad. Government, LEPs, trade bodies, chambers of commerce, all have a role to play in helping SMEs to operate abroad."
Gary Lydiate gave the view of an SME reliant on an export market. "I'm fortunate that I run an SME that is private. That means we can take the long term view of how to work abroad." He emphasised the importance of local knowledge. "I don't employ expats, I employ locals. Chinese, Americans, Koreans. We need to take the expertise we get locally."
When asked if he found ethical issues complex and whether he had ever faced the challenge of offering a bribe or losing business, he agreed. "We have, and it meant we lost the business."
Steve Varley of Ernst & Young referred to the CBI's exports report, Winning overseas: boosting business exports performance. He argued that "UK plc is at a crossroads. One direction is a small country lane. The other is a super highway to the emerging markets. The 64,000lb gorilla for emerging markets has been Germany. There is much we can learn from them, but thanks to the eurozone they're quite distracted now. That gives us the opportunity to overtake Germany."
He also made clear the importance of understanding the diversity of outside markets. "I think there is something curious about emerging markets. Expressions like BRICs give a false impression that countries like India are all the same." He argued that the main markets in India were in a series of very distinct megacities and businesses must recognise this.
David Bell argued the importance of having the right skills, citing the history of JCB as a lead exporter. "I've been with JCB 38 years. We've been exporting 80% of everything for 20 years. We have to because just 2.4% of our market is in the UK. It is the emerging market of China which is 50% of the world construction market.
"I hear virtually nothing about engineering and technology. Our education system does not value engineering." He argued that the current government approach in promoting a classical education was not helpful for business. "They want to teach Latin and Green but not Mandarin."
Lord Green agreed that "the languages that count these days are Spanish in one direction and Mandarin in the other."
Steve Varley agreed, saying that businesses can be bought in English but must operate in their language of operation.
Offering a concluding thought, Sir Rogercalled on British businesses to be brave and get overseas. "Just have the courage to go beyond your traditional comfort zone. Don't rely on reports, get on the plane and go."
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