20
roundtable: international trade
You may get more success in India, but it will be very slow.”
LOCALISM, Part 3: Solving skills shortages
The lack of suitably skilled UK workers was hampering growth, the Roundtable agreed.
Jolyon Pope
“Producing 50,000 zoology graduates a year doesn’t seem to make sense because we haven’t got enough zoos,” Whittle said with irony. “The universities are getting wise to that now, but in future I think we could see universities reflecting their locality. The cost of education, living away from home and graduating with £50,000 debts is so disproportionate that people will localise and reduce their costs. If you get local people going to their local university, it seems sensible to me that education should localise its offering of skills to be appropriate for the locality they are in.”
Murray pointed out that the Southampton Solent University was already looking carefully at the needs of the local market and devising their courses accordingly.
David Squibb
Whittle: “Another problem is that governments talk about engaging with business, but in reality they have talk to someone at a company like BP who has no idea what is going on locally.” He admitted, there were now hopeful signs of government consultation with “local people who understand the marketplace and what we as business people want and need.”
Grazebrook spotlighted the lack of UK labour mobility. “In the States and Far East, people are much more willing to move and follow the work. In the UK we have got a north-south divide and it’s virtually impossible to get steel foundry people to come down here from the north. Part of this is of course due to cost of housing, but this argument is contradicted by the fact that it remains very much easier to employ from Poland or the Czech Republic.”
Sean Wright ... continued from previous page
sector, but certainly among SMEs there is a lot of latent export potential.” He recalled one new client who showed him a stack of overseas orders that he had not progressed ‘because he thought it would be too difficult’. “If we could reach the European exporting average of 1:4 businesses by 2020 then that would generate another £20 billion.
“There is potential among SMEs; it’s about encouraging them to be clear on their goals and providing the appropriate support. Most mid-market businesses may well be exporting already, but perhaps they need to push the envelope and explore opportunities in some newer markets. And with that aim, we’ve also been working with the CBI on their “M-Clubs” initiative to help medium-sized businesses increase their outreach to new export markets.
www.businessmag.co.uk
Morrison agreed that getting capable engineers to relocate from northern UK was extremely difficult due to housing, transport and general living costs being so much greater.
Clarke mentioned that one reason for offshoring to low-cost call centres was the ability to staff them largely with graduates. “We just don’t have that level of resource and capacity here.”
LOCALISM, Part 4: Is work returning? Do we darn socks?
Squibb: “In terms of UK localism and creation of jobs in the UK, we are now seeing requests for funding and investment in capital goods – new machines, tooling etc – based on export contracts. This is the first time I have seen this sort of activity in a couple of years, and it’s all for goods that will eventually go abroad.
“These are all changes that are happening but we must not kid ourselves. Emerging markets like Brazil and China are really hard nuts to crack.
Several Roundtable members reported problems with foreign import duties, regulations, and governmental bureaucracy.
Grazebrook: “I think certain governments are wily in stimulating and supporting their own businesses in areas that they want to, through the use of import tariffs and special dispensations.”
Squibb: “A lot has changed in UK Manufacturing over the last 15-20 years, so we shouldn’t think we are going to reverse that in 2-3 years. It will take a similar timescale to get back to where we were, and that’s if we can get equipped with the right sort of skills. To move our export average up to the 1:4 EU rating will also take considerable time, and again we have to get the skillbase right. As a bank, we’re keen to support the manufacturing sector and launched a £1b funding commitment this autumn”
Pope suggested cross-trading could be a more immediate answer. “You can buy stuff from one place and sell it in another, and the actual value- added comes to Britain. You buy the goods where they are made cheaply, and you sell them where you can for profit.”
Morrison said bringing some types of offshore manufacturing back was unlikely. “We have to focus on the achievable. We have become a very consumer-led throwaway society and we won’t go back 30-40 years to where we were a manufacturing country. People are used to going to supermarkets. We don’t darn socks nowadays. We will always import from wherever the labour is cheapest.”
Grazebrook: “But, we should always retain the capability and desire to focus on for high-value manufacturing.”
Steve Clarke reminded the Roundtable that UK plc earnings are largely dependent upon ‘invisibles’ like finance and insurance, which in turn depend on providing valued service. “What the past three to four years has taught us is that if we get that value proposition wrong it has major implications for the UK economy. We are now getting back to quality and value, with proper margins etc, which makes these sectors more sustainable.”
Changes in some offshore operations was reflecting this fresh recognition of service value, and bringing work and employment back to the UK. This shift might even be a catalyst for growth, Clarke added.
Confidence, risks and the need for trusted advisers
Whittle claimed that the missing element for more exporting was confidence. “Everyone has battened down the hatches and prefers taking low-lying fruit. Exporting to Europe presents one set of new issues, but going to the Far East or Brazil would not be perceived as low-lying fruit for an SME. The time and risk in exporting further afield is seen as too great.”
There are perceived and actual legal risks too, added lawyer Wright. “The investment in time
THE BUSINESS MAGAZINE – SOLENT & SOUTH CENTRAL – NOVEMBER 2012
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 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44