It seems the recession hasn’t dented the spirits of small- and medium-sized enterprises. Despite being smaller in size, a high number of SMEs took part in a series of programmes intended to boost British exports to, and investment in, Asian countries.
Jointly chaired by Lord Mandelson and Lord Powell, the IoD partnered with UKTI’s Asia Task Force in a number of events held across the country this month. Out of circa 1000 businesses, 68 per cent of those attending were SMEs; a positive sign for Britain’s struggling economy.
But why Asia? It certainly seems like a good opportunity for any business at the moment. While many nations’ GDPs around the world have been shrinking over the past year, certain countries in Asia are going from strength to strength. In an earlier Pre-Budget Report, the government went as far as to say that by 2015, Asia will be responsible for as much as 25 per cent of world trade.
Some interesting facts to consider:
- •Since 1985, over 400m Indians have moved out of relative poverty
- •India has just reported a 7.9% growth rate, which has shattered forecasts
- •India has 16m new mobile phone subscribers every month
- •50% of India’s population is under 25 years of age and 35% are under 15 years of age
- •China is currently building 45 airports, all of which are larger than Heathrow
- •China has 338m internet-ready users, larger than the total population of the USA and over 5 times the total population of the UK. However this is only 36% of China’s population
- •It is estimated that by 2015 China will have over 200 cities with populations of over a million. In comparison Europe has 35 cities that reach this population
Both China and India present compelling investment opportunities. The IoD’s Miles Templeman was encouraged by a recent visit to India, where he saw many opportunities in India’s infrastructure projects. But he was disappointed to see that British companies were clearly lagging behind their French, German and American rivals. Why is this? Are UK businesses getting the right support for trading or operating in these regions?
In a recent meeting with the Joint Economic and Trade Committee (JETCO), a number of questions were raised regarding the barriers to trade between the UK and India. In the five years since it was established, JETCO has looked at ways to increase cooperation between these two countries, but there is still a long way to go. What are the obstacles that British companies are experiencing and how can we overcome them?
If UK businesses are able to harness the potential that these countries provide, trading internationally can increase a firm’s productivity by 34 per cent in the first year. Unsurprisingly, businesses that export are 12 per cent more likely to survive than those that don’t.
I am soon to have further meetings with the Asia Task Force and JETCO to look at support for UK businesses within these regions. If you feel there is more that could be done to help British trading in Asia, or you have experienced obstacles to growth and found ways to overcome them, I’d love to hear from you and feedback your experiences at these meetings. SMEs need open markets in order to grow and we need a clear understanding of what’s needed to be more competitive and profitable.