By Timothy Anderson, timothyanderson2005@gmail.com
A common complaint amongst companies in China has been that although the UK government supports investment into China and Chinese investment into the UK, it does not do enough to help established UK companies in China.
With the release of the latest 5-year strategy of UK Trade & Investment (UKTI) in July, it would seem the sort of changes designed to help alleviate these complaints might be in the air. With this in mind, the brain trust at The Beat decided that a quick and dirty examination of the new UKTI strategy, and how it is likely to play out in China, was in order.
At the heart of the plans are a number of strategic, organisational and cultural changes at UKTI set to have potentially significant ramifications on UKTI’s stakeholders in China. Unsurprisingly, emerging markets - lead by China - figure prominently in the new strategy.
The ambitious goal of the UK government is to make the UK the country of first choice for those abroad looking for a business partner. The new UKTI strategy is the design for turning this vision into reality.
The cornerstone of the new UKTI strategy is a shift of resources away from headquarters and into front-line services, alongside an infusion of private sector expertise (including the addition of a Managing Director and Executive Director of Marketing with significant private sector experience), increased freedom for UKTI’s overseas staff to adjust their approach to relevant local market condition as they see fit, and a focus on employing professional marketing skills to better get the message of the UK’s significant strengths out to the world.
In practise, this means that emerging markets, lead by China, will receive a greater proportion of resources, made possible by internal moves such as the shedding of some 100 posts at UKTI headquarters by early 2007.
The upshot of the strategy for companies operating in China is a UKTI better positioned to offer ground-level assistance to established small and medium enterprises in China. Companies should expect to see a significant strengthening of regional ties within UKTI in different cities across China and stronger networks with other UK organisations.
The new UKTI strategy will involve a restructuring of the organisation around client groups, the introduction of client account managers for key clients supported by a proper CRM system and the previously mentioned reallocation of resources targeted towards the front line – those in direct contact with business customers in the UK and overseas. Again, all changes expected to benefit China’s SMEs.
The changes also signal a new drive to attract inward investment into the UK, highlighted by a joint public/private sector strategy designed to promote the City of London and the UKs financial services sector. In the case of China, a clear priority is attracting large Chinese companies to list on the London stock exchange.
Focus will be put on innovative companies, companies with a high R&D intensity, high value potential investors, major exporters, exporters to emerging markets and offering help to SMEs exporting for the first time. Financial services, oil and gas, information and communications technologies, and biotechnology are singled out as priority sectors. Trade and investment activities will be increasingly integrated in these areas.
The case of China, where major contract and commercial decisions are referred to the Chinese government for approval, is illustrative of the need for critical UK government support and informed action to enhance the competitiveness of companies wanting to trade in emerging markets. The new UKTI strategy is an acknowledgement of this reality, and the increasingly important role of UKTI acting as a facilitator for coordinating such UK government action.
Though critics are bound to note that these increased resources for emerging markets, such as China, will not come from new money (rather they are being fully funded by resources reallocated from other parts of the UKTI overseas network), what can at least be said is that their appears to be some meat behind the rhetoric –the potentially significant changes at the ground level.
That said, the envisioned shift in organisational culture towards a UKTI that is a streamlined, target-driven, entrepreneurial and client-focussed organisation capable of competently meeting client demands, professionally marketing the UK’s strengths, and effectively co-ordinating the work of central and regional government with that of the private sector, is hardly a trivial undertaking.
Whether this shift can indeed be accomplished without any increase in overall UKTI resources and if the new strategy can live up to those lofty ambitions and expectations, and just how much those working at the ground level in China will feel the changes, remain open questions that will be answered over the coming months and years.
This article will appear in the October 2006 issue of ‘The Beat’, the monthly magazine of The British Chamber of Commerce in Shanghai.
