international trade 21


Mid-market technology companies missing a trick


Despite demonstrable opportunities in the BRIC economies, new research from Grant Thornton UK LLP shows that three-quarters (75%) of medium-sized UK technology companies have no plans to invest in new markets in the next 12 months


The research reflects trends over the past five years for mergers and acquisitions in the technology market, which show that domestic investment continues to be the number one priority for ICT businesses. 141 UK-to-UK deals were completed in 2011, a higher volume than with any other country.


In terms of outbound investment from the UK technology sector, mature markets such as the USA, Australia and Germany have consistently remained at the top of the league.


Norman Armstrong, partner at Grant Thornton Southampton, is calling on investors in the UK‘s technology mid-market to think beyond traditional investment regions and seize opportunities.


He says: “Over the past five years the volatility of the global market has inevitably had an impact on the volume of cross-border deals.


“Traditional, mature markets such as those in the G7 remain attractive to UK firms because of a familiar business environment, language commonalities and greater access to highly-skilled employees. In contrast, outbound investment into fast-growing, tech-friendly economies such as India, China, Brazil and Israel is still relatively low, dropping off entirely in 2010 although rising to 4% in 2011.“


To help highlight the opportunities available, Grant Thornton has produced an ‘expansion index‘ guide, which compares existing UK investment markets such as the UK, the USA, Germany,


France and the Netherlands with emerging economies. The data demonstrates that the markets with the biggest opportunities are also the markets that present the biggest challenge for investors.


Armstrong continues: “The sheer volume of information that a business has to get to grips with before making an investment into an unfamiliar market can be daunting. There are three key stages that are vital foundations for a market entry strategy: full assessment of the opportunity available, thorough preparation so that a business is ready for execution, and management of the actual execution itself.“


In the report, Grant Thornton has also called on technology investment


‘Britain could become the most competitive economy in the world‘


Dorset directors are calling for more help from government to cut red tape and regulations if local business is to take advantage of the potential growth in the world economy.


“The local area benefits from a wealth of knowledge-based businesses and enterprises that are very much focused on export opportunities,“ said Warren Munson, chairman of the Institute of Directors (IoD) in Dorset.


“Consequently, we should be positioned well to grow as economic conditions improve, but we need the assistance from government in reducing the amount of red tape that is involved in running a business.“


His comments echo those of the IoD‘s chief economist Graeme Leach, who told the organisation‘s annual convention


that Britain could become the most competitive economy in the world – provided government stepped back and business stepped forward: “The size of the state in the UK is too big, we simply will not be able to sustain a state this big in the 21st century.


“The advanced economy with the smallest state share is South Korea, at just over 30% of GDP, but in parts of the UK, the state share is double that and closer to North Korea than it is to South Korea.“


Economic research suggests the world economy could triple by 2050 and the IoD has been setting out its plans to make sure British business is ready to take advantage.


“We need to unleash competition,“ continued Leach.


THE BUSINESS MAGAZINE – SOLENT & SOUTH CENTRAL – JULY/AUGUST 2012


‘International hub‘ in Bournemouth


South coast recruitment firm Advanced Resource Managers (ARM) has expanded its Bournemouth office in anticipation of the team‘s tripling in size in the near future. The company expects to be creating many new jobs in the city as demand grows for specialist iGaming and eCommerce recruitment services and the company works to expand its international operations.


Chief economist Graeme Leach


“We need to be hypersensitive in all markets, constantly seeking to maximise competitive forces. Think global, not local. I mean a genuinely-global outlook, which sees the EU as one market among many, not the political and economic focus of the UK.“


Director of international IT Lynda Ennis said: “These fantastic new offices are well equipped and in a great location. Bournemouth is an exciting place to work. It‘s substantial number of language schools make it an ideal location from which to establish our new international hub.“


www.businessmag.co.uk


experts from around the world to provide detailed insight about key technology markets, both traditional and emerging.


Armstrong concludes: “One of the reasons that UK technology businesses are reluctant to enter China is a fear of copying or reverse-engineering of their products. Whilst this is still a risk, as China‘s patent system evolves there are increasing opportunities for businesses to protect their intellectual property (IP) and access the significant Chinese skills base. These opportunities are being noticed. Recent research by the China- Britain Business Council showed that 59% of UK businesses with a presence in China want to increase their R&D activity there.“


More information or a copy of the report are available on request.


Contact: Norman Armstrong 023-8038-1114 norman.armstrong@uk.gt.com


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32