James Emmett, HSBC's Global Head of Trade and Receivables Finance, discusses how a 'whole economy approach' could help boost UK exports. Mr Emmett was speaking at the CityUK event, Exporting for Growth, in London on 11 February 2013.
Listening to the debate in the UK, it would be easy to think that the world economy is not growing. But 2012 was a year of global growth. The emerging markets expanded by 4.9 per cent, led by China at 7.8 per cent. This growth will continue in 2013. We expect China to grow by 8.6 per cent this year, and that it will contribute more to global growth than ever before in 2014.
The UK can claim its share of this growth by building connections with the markets now driving the global economy. It can achieve this only through exports.
A five percentage-point rise in the proportion of small and medium enterprises in the UK that are exporting would add GBP30 billion to GDP and create 100,000 jobs. The government has set a target of doubling exports to GBP1 trillion by 2020.
Last year's Olympic Games proved that the British brand is still in robust health. The UK's manufacturing base, although often talked down, is still strong and the country is home to a number of world-leading companies. David Cameron, the Prime Minster, pointed out that the UK exports tea to China, vodka to Poland and cheese to France. There's even a company in Wales selling canoes to the Inuit.
As a financial centre, the City of London, with its international standing, is a major asset for the UK and can play a pivotal role
However, UK export business should be stronger. So what are the barriers preventing firms going international? In a recent survey by UK Trade and Investment (UKTI), 43 per cent of firms said that legal and regulatory issues were the most common barriers to export, while 33 per cent cited lack of contacts. There are plenty of initiatives to help businesses overcome these barriers, but coordination is key.
Businesses should experience a well-coordinated front. The UK needs to bring together the government, the Chambers of Commerce, UKTI, the City of London and others to form a 'whole economy approach'. This means considering how to better leverage existing investment, advantages and expertise; how to reorientate the economy towards China, Brazil and India; how to change attitudes, celebrate success and create a sense of competitive confidence in UK; and how to better project the nation's strengths to the world and show that the UK is open for business.
But, of course, every Western country is having this conversation. So it is crucial for the UK to stand out by leveraging its advantages. As a financial centre, the City of London, with its international standing, is a major asset for the UK and can play a pivotal role in this 'whole economy approach', helping businesses build relationships in their target markets.
HSBC has been financing trade between East and West for almost 150 years. Today we have a huge footprint in China, throughout the emerging world, and in the UK. We too are thinking about how we can ensure that our network is put to the best effect to support UK exports. We have 230 International Commercial Managers providing dedicated expertise to UK businesses that are looking to expand in new markets. Through our Global Connections and Thought Exchange programmes we provide regular insight into emerging market trade trends to help businesses with their planning, and we regularly take groups of businesspeople into these markets to meet potential partners, make contacts and gain their own insights into different commercial cultures.
Business is about relationships and as a nation the UK needs to work harder at building them in growth markets. Greater coordination is needed to reach out to these new markets at all levels – politician to politician, city to city, business to business – and I believe the City has a crucial role to play.
Download the full speech from the CityUK seminar.