Performance on this essential service is assessed by PSA 6 (Trade & Investment) – please see part 3 of this report.
UK Trade & Investment (UKTI) is the government organisation that helps UK-based companies succeed in an increasingly competitive global economy. UKTI also helps overseas companies bring high quality investment to the UK. UKTI offers advice and expertise, contacts, services and support through a network of international specialists across nine English regions, and in British embassies and other diplomatic posts around the world.
“I congratulate UK Trade & Investment for developing this marketing initiative which sets out a clear direction and plan of action to improve marketing of the UK Life Sciences sectors. Business has already been rigorously consulted and I look forward to working together to implement this strategy to ensure we promote our expertise as widely and effectively as possible.”
Chris Francis, founder and Chief Executive of Cardionetics Ltd, a science-based healthcare company using artificial intelligence techniques to analyse cardiac conditions in real time.
Globalisation is a fact of life. It is altering the way in which the UK does business with the rest of the world. It brings us massive benefits.
New communication technologies and falling transport costs are reducing barriers to trade. The emergence of high growth economies, such as China and India, are providing both challenges and opportunities.
Our prosperity depends increasingly on the performance of UK companies in world markets, and on our success in attracting inward investment. The Government is committed to supporting this through the provision of world class services to exporters and investors. It does this through UK Trade & Investment, a joint department of the FCO and BERR. This is a great example of joined-up government, with staff drawn from both parent departments.
UKTI is committed to helping UK companies, including overseas companies choosing the UK as their global hub, develop their international business, and to providing support for overseas companies who want to invest in the UK.
UKTI’s strategy is to:
- transform the way the UK economy is marketed internationally
- improve the effectiveness of Government and business working in partnership and
- focus on the sectors and markets where it can add most value.
The unique market knowledge and network of business and government contacts that our UKTI global network has is critical to the support we can provide to UK companies doing business overseas, and to potential investors in the UK.
Since accepting the Prime Minister’s invitation to become Minister for Trade and Investment, I have visited 15 overseas markets, including China, India and the USA, and have seen at first hand the excellent job that the UKTI network provides to support trade and investment.
More details of UKTI’s progress against its targets and objectives can be found in its own Departmental Annual Report and Accounts, which will be published on the UKTI website in July 2008.
Digby, Lord Jones of Birmingham
Minister of State for Trade and Investment
UKTI has the lead role within Government for delivering trade development and inward investment services for business. It is a joint FCO and BERR department and it shares its PSA (Public Service Agreement) target with its parent departments, delivering it on their behalf through staff employed by either the FCO or BERR. Most of those working on delivering UKTI services overseas are FCO staff working in our network of diplomatic posts around the world. Staff working in the UK are drawn mainly from BERR.
UKTI works closely with the Regional Development Agencies (RDAs) in the English regions and with the trade promotion and inward investment organisations of the devolved administrations (DAs). It holds an annual high-level summit with them, along with various working-level meetings throughout the year. UKTI also has strong links with other organisations involved in promoting the UK’s success in trade and investment, both in central and local government departments and agencies, and with numerous private sector organisations.
UKTI’s mission and strategy
UKTI is primarily a service delivery organisation. Its mission is to deliver maximum value for the UK economy by facilitating business success in the global economy. It does this by helping UK companies to grow internationally, and by helping overseas companies to bring high quality investment to the UK economy.
UKTI’s five-year strategy, Prosperity in a Changing World [pdf, 2.02mb, new window], published in July 2006, signalled a shift in the Government’s drive to market the strengths of the UK economy internationally. It confirmed UKTI’s lead role for the UK on trade and investment, working in partnership across Government and with business to deliver maximum value, and it focused UKTI’s resources on the customers and markets with the greatest potential, where UKTI’s services can add most value.
UKTI’s 2007 Comprehensive Spending Review (CSR) settlement confirmed the targets outlined in the strategy. For each year of the settlement (from April 2008) UKTI will:
- attract high-value foreign direct investment to the UK (with UKTI involved in at least 525 inward investment project successes)
- improve the performance of UK businesses by helping them to grow internationally (UKTI will help at least 20,000 businesses – 12,000 of them innovative companies – to exploit overseas business opportunities with at least 50% of these businesses reporting an improvement in their business performance as a result of UKTI support)
- increase the quantity of research and development (R&D) activity in the UK through business internationalisation (by helping at least 1,000 businesses to increase their R&D activity in the UK) and
- improve the UK’s reputation as the international business partner of choice.
Other UKTI targets for the CSR period are to:
- improve the UK’s reputation as the international business partner of choice
- increase its professionalism through achieving at least 80% quality and satisfaction ratings from customers using its services and
- increase its revenue from charging for its services.
Support for defence exports
In July 2007, the Prime Minister announced that responsibility for defence trade promotion would move from the Defence Export Services Organisation (DESO), a group of the MoD, to UKTI. An implementation plan was published in December 2007 and sets out how UKTI will take over DESO’s service delivery functions. UKTI will take over responsibility for defence trade promotion from 1 April 2008.Delivering UKTI’s strategy
Marketing
During 2007 in-depth marketing strategies for four priority sectors were developed through extensive consultation with business sector partners and private sector partners. The sectors are:
- creative industries (launched July 2007)
- life sciences (launched November 2007)
- information and communication technology (launched December 2007) and
- energy technologies (launched December 2007).
These strategies join the financial services strategy launched in October 2006, which covers the City of London and the UK’s financial and legal services sectors.
Built on UKTI’s key message, launched in March 2007, that the UK is a ‘springboard for global growth’, these business-led strategies aim to:
- place the UK as the leading partner of choice in developing new business opportunities and global commercial success in each of these areas and
- provide the UK with a unified, compelling message to sell and promote the UK’s business and science-based capabilities, clearly and consistently.
Partnership
UKTI has some 300 international trade advisers across the nine English regions, most with private sector backgrounds, plus other specialists seconded to UKTI through interchange programmes.UKTI also now has a newly enlarged network of 50 private sector specialists, who provide knowledge, expertise and contacts to help UKTI deliver the following four programmes:
- The High Growth Market Programme – This is a new activity that draws on UKTI’s strategy, and focuses on selected mid-sized UK-based companies, to help them do business in target high growth international markets. Over the 11 months to February 2008, UKTI has helped116 companies to do business in 17 high growth markets, such as Brazil, China, India and Russia.
- The Sector Champions Programme – These are 15 specialists who provide sectoral and technical input for trade and inward investment activities.
- The Research and Development (R&D) Programme – This is another new activity, with 17 Research and Development (R&D) specialists helping UKTI to target selected overseas R&D-intensive companies, and encouraging them to do more work in the UK. At the end of February 2008, UKTI had reported 71 R&D inward investment successes. UKTI also selects and works with innovative UK-based companies, where trade development will help to boost R&D output, for example by helping a company to understand what adaptations are needed to make a product suitable for a new market.
- The Global Entrepreneurs Programme – This existing UKTI programme, focused on inward investors, now forms part of the R&D Programme. It targets key knowledge-based sectors, using a team of nine ‘deal-makers’ (individuals who are successful entrepreneurs in their business sector). These teams are able to identify and mentor clients, and help them to set up in the UK. At the end of February 2008 this programme had helped 33 businesses in sectors such as healthcare, internet security and alternative energy.
Focusing on where UKTI makes the most difference
Since UKTI published its five-year strategy, it has moved £5.6 million of its overseas resource into high growth markets that are strategically important to the UK’s future economic well-being. Seventeen high growth markets have been identified, and they represent significant opportunities for UK business. UKTI’s financial commitment includes support for the UK India Business Council and the China-Britain Business Council, both of which aim to increase trade between these countries and the UK.
UKTI has also identified specific companies to target for potential high value, good quality inward investment. Together with the sector marketing strategies and the increased use of private sector specialists described above, these are further examples of UKTI’s increased focus on activities where it can add most value.
UKTI trade and investment services
As well as the services already outlined, UKTI provides a range of other services to businesses, some of which are listed below:- Passport to Export – This provides access to a range of services to help build capabilities in companies new to exporting, to help them prepare to do business internationally for the first time, and to take advantage of available opportunities in their first overseas market. Over the 11 months to February 2008, 1,753 companies had signed up to the programme.
- The Overseas Market Introduction Service (OMIS) – This service, for which a charge is made, provides companies with tailored information on markets that are of potential interest to them.
- Almost 5,000 orders were received for OMIS reports over the 11 months to February 2008.
- The Tradeshow Access Programme – This service supports companies taking part in overseas exhibitions. It is available to small and medium-sized enterprises (SMEs) new to exporting and to more established exporters attending events in high growth markets. UKTI works with those trade organisations that organise attendance of UK companies at these events. By February 2008 some 3,500 companies had received support from UKTI.
- A range of sector-specific inward and outward missions – These inward missions bring groups of buyers and key decision-makers from target markets abroad to visit the UK and show them UK expertise in action. Outward missions showcase UK expertise in target markets overseas. UKTI also arranges outward and inward VIP visits.
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The UKTI Enquiry Service – This is the first point of contact for customers and for dealing with enquiries relating to UKTI’s services. Over 2007/08 this service will have dealt with more than 30,000 telephone calls and emails.
Latest research on the importance of international business
UKTI maintains a research programme to assess the effect of its services on the businesses it supports, and more generally the effects of its services on companies that are involved in international trade. Research published in 2007 showed that some 60% of UK productivity growth during 1996 to 2004 was generated by exporting firms. It also revealed that firms beginning to export boost their productivity by up to a third in the first year. These firms are generally more productive than non-exporters. See the report 'Firm Level Empirical Study of the Contribution of Exporting to UK Productivity Growth (Richard Harris and Q.Cher Li)', commissioned by UKTI.Prime Minister’s visit to India and China
Business was the central theme for both visits, and UKTI was responsible for organising these aspects of the programme, as well as co-ordinating and developing the trade and investment objectives for the Prime Minister in each market.
In the UK, extensive media coverage of the visit to China focused on the announcement of a new $60 billion trade target, and agreement with the Chinese Government to showcase UK commercial expertise in environmental industries.
The India leg of the visit provided opportunities for the UK business delegation to meet key Indian decision-makers, including the Prime Minister of India. It was also announced that £10 billion worth of contracts were in the pipeline.
Lessons learned
In February 2008, following a joint review of inward investment promotion activity overseas, UKTI and the RDAs announced an agreement to put in place new arrangements by April 2009.This review, in which the DAs also took part, found that existing arrangements were generally effective and that efforts by the RDAs and DAs added significant value to UKTI’s own efforts to attract investment to the UK. However, it concluded that there was scope to strengthen these arrangements and, as a result, UKTI and the RDAs agreed the following:
- A new model for overseas representation.
- UKTI will lead the co-ordination of a fully integrated overseas network,
- co-ordinated strategies, business planning, branding and promotional activity. This will involve working alongside the DAs, in line with their own responsibilities for promoting inward investment.
- Performance measures and common evaluation, to provide a clear picture of joint impact.
- Explore the options for achieving better value for money (for example through co-location of teams, and joint procurement).
Cost benefit analysis
UKTI places strong emphasis on independent scrutiny of its activities. This includes commissioning studies within particular areas of work that UKTI does, and assessing the value for money that this represents for the taxpayer.
In 2006 a firm of independent consultants, SQW, looked at the work of UKTI’s international trade advisers in the English regions. Their findings estimate that these services produce a benefit to cost ratio of 25:1. These results compare favourably with the findings of another study published by UKTI in 2006, which showed that an investment of £65 million in four trade development services generated more than £1.1 billion for users of these services – a benefit to cost ratio of almost 17:1. See DTI Evaluation Report Series No. 9, 2004-05 'Study of the Relative Economics Benefits of UK Trade & Investment Support for Trade & Investment', Chapter 5, Appendix A.