Minggu, 29 April 2012

Access to funding is vital to help smaller businesses enter export markets

Access to funding is vital to help smaller businesses enter export markets

By Helen Loveless

PUBLISHED: 10:00 EST, 29 April 2012 | UPDATED: 10:00 EST, 29 April 2012

Outspoken: New UKTI chief executive Nick Baird

Outspoken: New UKTI chief executive Nick Baird

Access to funding is vital to help smaller businesses enter new export markets, says the recently appointed head of the Government department that helps firms on to the international stage.

Nick Baird, chief executive of UK Trade Investment, told Financial Mail: ‘Many companies are nervous about investing in new markets and finance is a key part of this.’

His views come as the latest Bank of England Trends in Lending report shows that lending by the banks to small and mediumsized firms has fallen again â€" this time by £5 billion in the three months to February.

Overall bank lending declined three per cent in 2011. By contrast, in 2008 it was growing at 17.9 per cent.

Baird believes there are big opportunities in Singapore, Australia and Taiwan, which he terms ‘safe and Western in their approach to business’.

The BRIC countries â€" Brazil, Russia, India and China â€" are riskier but also offer valuable export opportunities , Baird believes, in particular Brazil.

He says: ‘If I was going to put money on one emerging economy to do business with it would be Brazil. It is a strong democratic economy with great natural resources. It has a young and well-educated demographic.

‘On the downside, there is a lot of regulation, which can make setting up a business difficult.’ 

For those brave enough, some less well-explored markets offer big opportunities, says Baird, namely Mexico and Colombia.

‘Colombia is unlikely to be somewhere that many business owners think of yet it has become a much safer place with a growing middle class.

‘There are many French and Italian brands on sale there but so far no English. Yet they are very pro-British. The message that I get is, “Where are the British products?”’

UKTI takes delegations of firms to countries to help them build trade relationships. This year it will carry out several missions aimed at helping smaller firms specifically, including Turkey and China.

It also takes technology companies to Silicon Valley in California.

While any sector can export, those that are most successful typically have ‘high added value’ or are ‘technology rich or creative’.

As well as luxury goods Baird points to the automotive sector as an exporting success. ‘We are close to exporting more cars than ever before,’ he says.

One challenge is overcoming perceived risks. Baird says: ‘Unsurprisingly one of the key concerns for firms is not getting paid, but UKTI now provides credit insurance to small firms.

‘When it comes to unknown markets business owners need to research thoroughly. They will also need patience.’

Baird recognises that firms may be deterred from exporting to the Continent due to the turmoil but says: ‘Turkey and Poland are doing well, as is Germany.’

UKTI has set ambitious targets on exports and has doubled the number of firms it has helped export to 50,000. According to Baird, a key aim is to see UK exports reach a total of one trillion pounds by 2020.

He adds: ‘In the past we have perhaps been complacent and failed to use the full force of Government to help firms. Now we need to rediscover just how entrepreneurial a nation we are.’

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