Martin Oxley, Director of UKTI Warsaw blogs from the Emerging Europe Event on 8th November 2012 at the CBI - UK’s Voice of Business
A packed event right now in Central town at the CBI in the Centrepoint Building opposite We will Rock You – and rock you we will indeed. A packed Emerging Europe Conference with a sell out, capacity audience. A great call to arms by Nick Baird, UKTI CEO and Robin Barnett, HMA Warsaw and Director FCO CEN Network. I thought you would be interested in some highlights from a really Great show!
Growth is the top priority for Government and business alike.
Emerging Europe is a real growth opportunity which offers UK companies emerging market potential close to home. The region as we look at it takes in 10 countries, all represented here today, a population of over 110 million people and a GDP of over 1 trillion Euro. Today, I would like to explain why we see tremendous potential in the region, highlight specific sector opportunities where the UK can contribute and outline how together we can exploit those opportunities more effectively.
Let’s begin with a quick look at the region’s economic picture.
We are talking about over 110m people who a mere 20 years ago joined the global market economy, who for the previous 40 years had been isolated with little potential to develop, grow or modernise. Consumer growth, modernisation and investment are the order of the day. The face of the entire region is changing; we see an emerging middle-class with a huge appetite for the latest consumer products and an infrastructure network which is metamorphosing. It is also a region which, like the UK, is increasingly looking to export its way to growth and is very strategically located.
Are we making the most of the opportunity? We could be doing much better!
At first glance: Yes. The UK is doing well. Exports of goods and services have more than doubled in the last 10 years. UK export growth in Emerging Europe is up there with China, India and Russia – a growth of £2 billion in 2011 taking our exports to £16 billion. But imports to the UK from the region amount to £25 billion. Moreover, the Netherlands last year managed to export £26.3 billion to the region despite having a much smaller economy.
Services – a Great Opportunity
We see a particularly strong performance in services exports with 23% growth, taking us up to £4.6 billion. There are great British brands doing well, too many to mention in fact.
Some Great British experience
Tesco, a trailblazer in modern retail; IPF, a pioneer in financial services; Rolls Royce, transforming the region’s energy picture; and GSK, adding value to healthcare with its portfolio of innovative medicines. There are more – there could be a lot more!
We want to see far more of the UK’s mid size companies and high potential SME’s.
We see far fewer of the UK’s mid-size companies; not enough companies which add value through innovation; and, despite real success stories, our SMEs are thin on the ground compared with our European peers. There is scope to transform how UK companies are seen in this part of the world. Taking a look at the region’s total import picture we barely hit the radar representing a meagre 3% of Emerging Europe’s total import picture.
Where should we look for opportunity?
Energy & power generation – the countries across the region present a massive energy opportunity– energy consumption is rising but much of the infrastructure urgently needs replacing. There is a long way to go before the region fully meets EU energy directives. Energy security and diversification are key – nuclear, shale and renewables are all potential solutions. The UK is a global leader in energy & power.
Infrastructure – areas like transport, utilities and social infrastructure offer considerable opportunity going forward. We’ve got some great experience – let’s share it and develop opportunity. There’s lot’s to do and much to win!
Security and Defence – Modernising security and defence capabilities is high on the agenda of many governments in Emerging Europe. On civil and business security significant opportunities are presenting for UK innovation based systems.
Retail, food and drink – There is a seemingly insatiable thirst and hunger for great British products. We face a paradox as Tesco for the last 15 years has played a superb role in pioneering modern retail in Emerging Europe, today has over 1000 stores in the region and an excellent distribution network - yet we see an absence of British food and drink. The UK has more types of cheese than France – it is time for Emerging Europe to taste that.
Health and life sciences – in line with economic growth there has been an exponential growth in the healthcare markets in the region. UK global players are present. GSK and AstraZeneca are in leading positions cross the region. As individual countries develop there will be significant opportunities in diagnostics, IT and health and education. There is much scope for sharing experience in healthcare.
Finance & Services – an area where the UK is strong and an area where countries in the region will need to become more creative as demands increase and liquidity does not match the pace of development. We are active. Our banks are present corporately in the region; IPF is a leading company in consumer finance and British insurers are increasingly engaged – Aviva and RSA are great examples. There is room for more sophistication and depth. We lead the world in financial services. PPP and PFI are needed in Emerging Europe
What are the recipes for success?
Emerging Europe economies are young and have a strong, sustainable forward growth potential. The top ranking companies of today have all approached the region in a market focused way. They have learnt to work with the local business ecosphere, not expecting it to adapt to them. In some cases direct export has triggered success; in others local supply chain has been the key to growth; for some regional manufacturing has opened up new markets. Pricing and local market flexibility are key decision factors here. In many cases, finding the right local partner is key.
For more information about the opportunities available to UK companies in the emerging europe markets please visit www.ukti.gov.uk/emergingeurope.
1 comment
Comment by Anthony Mark posted on
Nice article!
I notice not much on information technology. Although admittedly it's integrated in all the industries and sectors mentioned. But I think it should stand out on it's own, what with the growth of local SEO's, design & hosting companies and the like.
Although I am refferring to the smaller end of the scale.
Also no mention of the recession? I find it worrying when business & financial experts dont mention this.
A Mark
Internet Marketing Company