GLA Consultancy repot - The London Export Plan.docx

MSINGM99 Global Research Project, Consultancy Project Report, Evelina Georgieva and Liliya Pencheva

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C O N S U L T A N C Y P R O J E C T R E P O R T

The London Export Plan GREATER LONDON AUTHORITY

JULY 2015

EVELINA GEORGIEVA LILIYA PENCHEVA


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Executive Summary

This report summarizes the main approach and steps taken during the consultancy process on

the London Export Plan. The latter is a strategic initiative, undertaken by the Mayor of

London and the Greater London Authority, seeking to enhance London’s small and medium

enterprises’ capacity and potential to expand globally.

The report summarizes the main task and objectives, including the ultimate goal of reaching

out to London SMEs and learning about their exporting experiences. Further, GLA’s

organizational characteristics and our roles and position within the project team are described.

Finally, four essential recommendations regarding the London Export Plan are presented,

followed by a clarification of the international aspect of the project: inherently global.


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Table of Contents

1. BACKGROUND............................................................................................................ 4

1.1 UK Exports and London’s Key Role .................................................................. 4

1.2 Description of the Consultancy Task and Objectives ....................................... 4

1.3 The Greater London Authority ......................................................................... 6

1.4 GLA Economic & Business Policy Unit and Our Roles ...................................... 6

1.5 Team Positioning within the GLA Structure ..................................................... 7

2. CONSULTANCY PROCESS ...................................................................................... 8

2.1 Preliminary Research Stage ............................................................................. 8

2.2 Qualitative Market Assessment ...................................................................... 9

2.3 Evaluation of the Mayor’s Trade Missions ....................................................... 10

2.4 Research on Other UK “Core Cities” Export Support ...................................... 10

2.5 Presentations ................................................................................................. 10

3. RECOMMENDATIONS ............................................................................................. 11

4. INTERNATIONAL DIMENSION ............................................................................. 12

BIBLIOGRAPHY .............................................................................................................. 13

APPENDIX ....................................................................................................................... 14


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1. BACKGROUND

1.1 UK Exports and London’s Key Role

After the 2008 Global financial crisis economic recovery has been a top UK government

priority. Expansion into international markets has been identified as a key element of the

reclamation process and the ambitious goal to double national exports by 2020 has been set

(UKTI, 2014).

Recent research on UK national exports (Theseira, 2014) has identified that London accounts

for about half of the total UK services exports. As global trends indicate that services are the

major export growth driver, London is expected to keep its key role in UK’s export progress.

1.2 Description of the Consultancy Task and Objectives

Various public and private organizations have been striving to assist UK businesses in their

global expansion ambitions, yet the latest export data (GLA Economics, 2014) fails to meet

the expectations. Considering London’s key export role in the UK, the Mayor of London has

decided on a city-based approach on export support to better utilize the capital’s potential.

The London Export Plan, a strategic initiative relying on public-private sector collaboration,

has been designed for this purpose. The plan is jointly developed by The Greater London

Authority (GLA), London & Partners (L&P), London First and UK Trade & Investment

(UKTI), with the assistance of The Brookings Institution and J.P. Morgan.

Our consulting role fit within the GLA core project team working on the Export Plan.

Main Task and Key Objective:

Additional objectives:

• Assisting with the evaluation of the Mayor’s Trade Missions abroad by identifying

weaknesses and opportunities providing clear additionality to existing support.

• Identifying successful export assistance practices in other UK “Core Cities”, that

could be effectively translated into London’s support provisions.

Our main consulting task pertained to the qualitative market assessment element of the project. The key objective was to provide GLA with first-hand opinions of London-based

SMEs regarding their export experience and existing export support services.


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1.3 The Greater London Authority

The GLA, run by the Mayor and the London Assembly, is a top tier administrative body,

responsible for planning and development, policymaking, budgeting, transport (GLA, 2015).

Being a public sector organization, the forces affecting the GLA are materially different from

these in the private sector. In the specific context of the London Export Plan, influencers were

seen in the face of other institutions involved (Figure 1) through their support and ideas, but

also through a layer of added political complexity.

Figure 1 Main Forces Affecting GLA Decisions

1.4 GLA Economic & Business Policy Unit and Our Roles

The London Export Plan combines the efforts of several key departments, including:

• GLA Economic & Business Policy Unit (qualitative market assessment)

• GLA Economics (quantitative market data)

• UKTI Policy (Trade Missions assessment)

• L&P Market Analysis (SME connections)


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The GLA Economic & Business Policy Unit is responsible for developing and implementing

strategic economic policies and projects. The London Export Plan, part of the wider

Economic Development Strategy (Mayor of London, 2010), is an excellent example.

Both of us were assigned the role of “Market Researcher” during the consultancy process.

However, we adopted separate informal roles – Liliya Pencheva was involved in the market

assessment instrument development and the research of other UK “Core Cities“, while

Evelina Georgieva participated in the evaluation of the Mayor’s Trade Missions. Further, both

members were involved in the preliminary research and the qualitative market data gathering.

1.5 Team Positioning within the GLA Structure

While our position was within the Economic and Business Policy Unit, interdepartmental

collaboration and cooperation with external partners were embedded into our day-to-day

responsibilities (Figure 2).

Figure 2 Team Positioning


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2. CONSULTANCY PROCESS

The consultancy process we followed was highly structured and adhered to the key required

deliverables. We were delegated the decisions on the organization and aligned our timeline

with the Principal Project Officer Katherine Davies; one of the main products of our project –

the presentation for Ms Davies’ appearance at the Global Cities Initiative Conference

(GCI Salt Lake City, 20-22 July 2015), had to be completed by the time of her participation.

The next section provides an overview of the consultancy process’ 5-stage organization and

key responsibilities in the frame of the London Export Plan.

Figure 3 A Five-stage Consultancy Process

2.1 Preliminary Research Stage

To gain a better understanding of the export support landscape, we began by researching

existing assistance provisions. We identified the main support approaches, their

effectiveness, and areas where the London Export Plan could make a valuable contribution.


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The existing research grounded the main issues that current and prospective London-based

exporters face and directed our market assessment questionnaire. Appendix A provides an

overview of the main UK/London-based institutions and the nature of the support provisions.

2.2 Qualitative Market Assessment

The core element of our consultancy task involved examination of the attitudes and opinions

of London-based SMEs that already export, those that have considered exporting but haven’t

started the internationalization process, and those who perceive export as an unviable

expansion option. This placed a particularly strong focus on London’s high growth, service-

oriented sectors: technology, life sciences and the financial industry (Theseira, 2014).

Three primary data gathering methods were adopted (Figure 4).

Figure 4 Qualitative Market Assessment Approach

Note: Information on VoxPopMe at: https://www.voxpopme.com/home/ (VoxPopMe, 2015)

The choice of language and data collection tactics were carefully considered to ensure that the

project translated well from the public to the private sector.

Given the time and resource limitations, the questionnaire was designed to identify the

emerging themes and concerns in 4 key areas with regards to exporting (Table 1).


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Table 1 Key Qualitative Market Assessment Aspects

1. Non-Exporters: What are the obstacles?

2. Exporters: Experience, foreign market operations and expansion plans

3. Identifying common exporting barriers and challenges

4. Identifying improvement areas and additional services needed

Other methods, such as focus groups were also considered for their ability to facilitate debate.

However, this approach proved unsuitable due to high cancellation rates. Hence, we chose to

attend events that SME owners had already signed up for and gather the necessary market

information on a 1-1 basis.

The main interview/online survey instrument can be found in Appendix B. For information on

key events attended, see Appendix C. A selection of interview highlights is in Appendix D.

2.3 Evaluation of the Mayor’s Trade Missions

Our contribution to the assessment of the Mayor’s Trade Missions was based on first-hand

opinions of business owners that attended the market visits to Australia and New Zealand.

This involved an overview of achievements, follow-up actions and challenges faced in the

process, as well as necessary improvements of the Missions (e.g. length, organization). Any

other approach would have yielded fragmented results. For key findings refer to Appendix E.

2.4 Research on Other UK “Core Cities“ Export Support

The investigation of successful approaches in other UK “Core Cities” was conducted with the

professional help of the PA Consulting Group. Some of the most interesting findings that

could be translated in the London context came from Manchester, Liverpool and Birmingham,

including a free one-hour “International Trade Readiness Assessment” programme, tailored

HR support services and focusing on location-specific support (for instance in India).

2.5 Presentations

A key product of our consultancy task was the presentation for Ms Davies’ participation in

the GCI Conference. There she showcased the essence of the London Export Plan and the

market assessment results. In addition, findings and recommendations from all five process

stages were presented to the GLA Senior Management as the culmination of our consultancy

project. All slides can be found at the end of the Appendix.


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3. RECOMMENDATIONS

Four main areas, where the London Export Plan could introduce meaningful improvements to

existing export support were identified and suggested to the GLA.

• A Change in Support Focus

According to the results of our market research and a recent UKTI (2014) survey, companies

benefiting from UKTI support and the Mayor’s Trade Missions are mainly big, mature

businesses. This indicates a significant weakness of the existing support provisions in

reaching SMEs and micro enterprises, and pinpoints a large area of untapped export potential.

• Regional and Cluster Support Approach

Based on UK “Core Cities” experience and feedback from SMEs, significant export potential

could be unlocked by tailoring support services to the capital’s regional and industry

characteristics. This would allow better capitalization on the fast growing sectors, while

developing more industry clusters (tech, life sciences, finance) would help share experience.

• “One Stop Shop“ Support Approach

One of the main challenges that current and prospective exporters face, is dealing with the

wide network of available support, which many described as “confusing“ or “fragmented“. By

adopting a more integrated approach, the GLA and other organizations could create a “clear

roadmap“ (Theseira, 2014) to help businesses along the way of international expansion.

• Raising Awareness and Extending the Service Support Range

Our assessment of the existing support provisions indicated that more effort is needed in

raising the awareness of these, especially among smaller businesses, as many of them still

perceive export support as tailored to the “big guys“. In addition, many have cited specific

additional services needed (e.g. provision of office space, first point of contact, etc.)


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4. INTERNATIONAL DIMENSION

The London Export Plan is characterized by its inherently global nature. The city-based

approach, encouraging SMEs to internationalize, is centered around the initiative of building

fruitful international connections and presenting the capital on the Global economic scene.

Being one of the newest members of the Global Cities Initiative network, GLA provided us

with rich access to international contacts to collaborate with. In turn, we had the flexibility of

locating cross-border export assistance knowledge and suggesting new support tactics.

Further global exposure of the London Export Plan could be achieved through following the

example of other big cities, such as Chicago, and collaborating with these in more initiatives

like Chicago’s Entrepreneurial hub 1871 and World Business Chicago.


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BIBLIOGRAPHY

1871. 2015. 1871 and L39 Announce Friendship Agreement [online]. Available at: http://www.1871.com/pressrelease42314/ [Accessed 20 July 2015]

British Chambers of Commerce. 2015. Trading internationally [online]. Available at: http://www.britishchambers.org.uk/business/international-trade/ [Accessed 26 July 2015].

GLA Economics. 2014. London Business Survey 2014: Exports. London: Greater London Authority

Greater London Authority. 2015. About GLA Economics [online]. Available at: https://www.london.gov.uk/priorities/business-economy/publications/about-gla-economics [Accessed 23 July 2015].

Greater London Authority. 2015. Greater London Authority [online]. Available at: https://www.london.gov.uk/mayor-assembly/gla [Accessed 23 July 2015].

London and Partners. 2015. London & Partners - The Official Promotional Company for London [online]. Available at: http://www.londonandpartners.com [Accessed 26 July 2015].

London Technology Week. 2015. Going Global: Accessing the US Market | London Technology Week [online]. Available at: http://londontechnologyweek.co.uk/2015/05/going-global-accessing-us-market/ [Accessed 22 July 2015].

Mayor of London. 2010. The Mayor’s Economic Development Strategy for London. London: Greater London Authority

MedCity. 2014. A Partnership - MedCity [online]. Available at: http://www.medcitylondon.com/a-partnership/ [Accessed 26 July 2015].

Tech City UK. 2015. Tech City UK Programmes [online]. Available at: http://www.techcityuk.com/programmes/ [Accessed 26 Jul. 2015].

The Brookings Institution. 2015. Global Cities Initiative: A Joint Project of Brookings and JPMorgan Chase [online]. Available at: http://www.brookings.edu/about/projects/global-cities [Accessed 23 July 2015].

Theseira, M. 2014. Trading Places: Maximising London’s Exports Potential. London: Centre for London

UK Government. 2015. 2010 to 2015 government policy: Local Enterprise Partnerships (LEPs) and enterprise zones [online]. Available at: https://www.gov.uk/government/publications/2010-to-2015-government-policy-local-enterprise-partnerships-leps-and-enterprise-zones/2010-to-2015-government-policy-local-enterprise-partnerships-leps-and-enterprise-zones [Accessed 26 July 2015].

UK Trade & Investment. 2014. 2020 Export Drive - GOV.UK [online]. Available at: https://www.gov.uk/government/publications/2020-export-drive/2020-export-drive [Accessed 14 July 2015].

UK Trade & Investment. 2014. Internationalisation Strategies, Barriers & Awareness Survey 2014. Kent: OMB Research

VoxPopMe. 2015. Home - VoxPopMe [online]. Available at: https://www.voxpopme.com/home/ [Accessed 23 July 2015].

World Business Chicago. 2015. Who We Are [online]. Available at: http://www.worldbusinesschicago.com/who-we-are/ [Accessed 20 July 2015]


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APPENDIX


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APPENDIX A

EXISTING EXPORT SUPPORT FOR LONDON-BASED BUSINESSES

PUBLIC SERVICES

1. National Level

UKTI supports inward investment and works with UK companies to encourage exports. At present there are 11 programmes available to assist exporters and intensive programmes providing 6 or more days of support and advice. UKTI helped 36,900 UK companies during 2013.

There are 2 programmes specifically designed to assist London companies – India Marketing scholarship programme and the Cass Business School Executive Programme. At present UKTI and Mayor of London are developing a new initiative - the China Marketing Scholarship programme (Theseira, 2014)

2. London-based Programmes

Local Enterprise Partnerships (LEP) provide general regional business support for exporting and inward investment, in particular (UK Government, 2015).

Mayor of London develops the overall export strategy and is committed to working with UKTI on an Export Promotion Programme. The Mayor also runs various Trade Missions to help businesses better understand the environment they are planning to operate in (Theseira, 2014).

London & Partners (L&P) are responsible for inward investment and encouraging overseas students and business, as well as leisure tourism (London and Partners, 2015).

PRIVATE SERVICES

UKTI , the Foreign and Commonwealth Office and the British Chambers of Commerce launched an Overseas Business Networks initiative in 2012 to strengthen the UK’s own global business-to-business network. The initiative is targeting 41 hard to access, high growth markets in Asia, Middle East, Europe, Africa and Latin America (British Chambers of Commerce, 2015)

BUSINESS SUPPORT CLUSTER APPROACH

TechCity’s goal is to raise the profile of London’s digital sector, attract inward investment and steer policy initiatives to remove barriers to global growth (Tech City UK, 2015)

MedCity provides a focus on London’s strong life sciences sector, and a contact point for international investors through a collaboration between the Mayor of London, Imperial College Academic Health Science Centre, King’s Health Partners and UCL Partners. The main rationale is that putting London as a center for the industry will help London-based companies in the sector to market their services overseas and gain a competitive advantage abroad (MedCity, 2015)

LONDON BOROUGH SUPPORT (example – Hackney Council)

Some London boroughs actively promote exports and seek to support all businesses, while others promote only industry clusters in their boundaries. However, the main focus is on offering space for business development rather than assisting export initiatives (Theseira, 2014).


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APPENDIX B

INTERVIEW / ONLINE SURVEY QUESTIONNAIRE

1. Tell us about your Business:

What is your industry? What is your main product/service? How many individuals do you employ in London?

2. Does your business currently export goods/services to foreign markets?

3. If not, do you plan to export your product/service to any foreign markets in the near future? If not, why?

4. Which markets do you export to/are you considering? How and why did you choose them?

5. What are the main export challenges you are currently facing/consider as important?

Common challenges to refer to:

• Obtaining financing • Obtaining business insurance • Lack of reliable local contacts • Finding local distributors • Shipping/Transportation • Issues with customs authorities • Theft of property (intellectual/physical) • Issues with local authorities • Communication or language difficulties • Lack of qualified staff

6. What are the key areas where you feel improvement can be made in export support services?

• Obtaining financing and trade insurance • Local market access support e.g. trade missions or shows • Access to quality contacts: partners, customer, local trade bodies • Sales and marketing support • Market intelligence support e.g. seminars and briefings • Legal & local taxation support • Help in finding financing • Staffing and recruitment advice • Logistics support, e.g. assistance with finding office space, accommodation or travel arrangements, visa issues • Other (please specify)


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APPENDIX C

LIST OF NETWORKING EVENTS

Table 2 Key Events Attended during the Qualitative Market Assessment Stage

1) “Digital Shoreditch: Open house at Shoreditch Works“ , Shoreditch Works

2) “Going Global: Accessing the US Market“, London Technology Week 2015, in collaboration with Taylor Wessing and Goodwin Procter

3) “Doing Business from London and Beyond”, London Technology Week 2015, in collaboration with Moore Stephens

4) “Regeneration/Rejuvenation: Invest in London and Export from London“, Embassy of Japan in the UK, in collaboration with GLA and London & Partners

5) “Post Market Visit Briefing – Market Visit to New Zealand and Australia“, supported by Mayor of London, in collaboration with UKTI and the European Union

The next pages include more information on some of these events and the initiatives they

support. Most of the face-to-face interviews were conducted at the networking sessions after

these. Moreover, where there were panel discussions, a lot of valuable information on export

challenges, opportunities and support was gathered both from experts (e.g. at the Moore

Stephens event a lot of the export tax implications were clarifies) and current exporters that

participated in the Q&A sessions.

Moreover, at the “Post Market Visit Briefing – Market Visit to New Zealand and Australia“

event we managed to gather more information on the most recent Trade Missions – to Hong

Kong & Macau and Mexico that was used to inform our evaluation of the Missions. More

information of these can be found on the next pages of this Appendix.


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APPENDIX D

INTERVIEW HIGHLIGHTS

Location/ Event

Name of Respondent/

Company

Size of Business Industry

Exporting Locations Key Challenges Valuable Comments Memorable Quotes

“Digital Shoreditch”

Daniel Ivatt 1 Freelance

consultant/IT London and LA

Networking opportunities; Visa issues;

Finding reliable partners abroad

Aware of UKTI but knows little about the support they offer. Finds existing support

disjointed and confusing.

"I couldn't do what I do anywhere else in the UK. The rest of the country is 10 years behind in my line of

work"


Annalisa Banello 1

Business photographer/

Creative industries

Expressed interest in South America

and Southeast Asia

Needs a bigger team and representatives abroad in

order to expand her business. More visibility for available exporting services needed.

Not aware of existing support despite being a member of

London Chambers of Commerce. Interested in legal

support, networking opportunities.


Weave Software 16 IT/Software

Global customer base: USA,

Singapore, South Korea

Relied primarily on own network when growing the business. Visas and finding

the right local representatives are among the challenges.

Introduction to local trade bodies and potential partners would be a very useful step.

Temporary office space while on Trade Missions is needed. Assistance with tax and VAT

regulations, encouraging collaborations and networking (in SV firms test each other's

products as this speeds up potential launch).


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Japanese Embassy

Event

Roy McGowan/ Momentum

16 Transport planning

Operates in USA, Saudi Arabia, Qatar, Spain. Looking to

expand in Japan.

Evaluating if the partner is reliable. Many of their

prospective foreign partners were getting in touch to talk about projects, so that they

could steal ideas. In addition some of their prospective

partners in the Middle East required 10% deposit of the

value of competition – something that Momentum didn't approve of and never

got engaged with such propositions. Two main

challenges were identified: theft of intellectual property

and non-payment issues, whereas communication, language difficulties and

cultural issues were cited as minor obstacles.

Roy is very happy with the services provided by UKTI and he stated that nothing could be improved at the

moment. He's been working with UKTI since 2007 and finds that UKTI are very helpful when it comes to establishing contacts and

arranging meetings.

“I would work with people that someone I

know already has experience with. Once an American architect

introduced me to a foreign partner. I

wouldn't establish the connection if someone hadn't assured me that the partner is reliable.”

Japanese Embassy

Event

Charlie Parker/ Movement

35 in London + 10 in Norway

People movement and

crowd dynamics consultancy

Norway - foreign office, operates in: Qatar, Saudi

Arabia, Azerbaijan, Spain,

Hong Kong. Looking to

expand in Japan.

Lack of reliable local contacts;

Non-payment issues; Finding distributors;

Communication/language difficulties;

Cultural issues.

Mentioned that networking events (UKTI) are very well

organized and helpful. Access to quality contacts

could be improved and market intelligence support is

needed.

“It's really hard to find people to talk to - when you are starting overseas

operations from zero reliable partners are hard

to identify.”

Tech Week “Going Global:

Accessing the US Market“

Tom Adeyoola/ Metail

25 permanent employees in London, 25 in Cambridge, 2 in Singapore (expected to expand by

about 30% by the end of this

year) + 70 contractors in

India

Software/ ”Create outfits and see how

they will look and feel on you” (Metail, 2015)

Based in the UK but with a global vision from day

one. The business operates in Brazil, India, Singapore,

South Korea, Malaysia, Indonesia,

Vietnam, Italy.

There are no significant challenges that the business

has experienced. Minor shipping/transportation and visa issues were reported

that slowed down the development.

The founder attributes his success to a very strong

personal connections network and preparation prior to the

expansion.


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APPENDIX E

MAYOR’S TRADE MISSIONS EVALUATION – KEY FINDINGS

1) Meetings with local partners should be organized on a 1-1 basis, otherwise not everyone gets the chance to share their views and convey important information on their business.

2) Trade missions were very helpful at providing contacts in the explored locations; a few

of the participants stated that the best part was "connection/relationship establishment". 3) Establishing one contact helps building a whole network, following up is

important and local organizations should be involved in the process. 4) Everyone agreed that partnering with locals is "the way in" – for example one of the

business owners realized that the procurement process in New Zealand was much faster than in his own country, so if the company were to compete successfully, they would definitely need a local procurement partner.

5) Visa issues – a residential visa might take a very long time to get issued, so establishing

a branch overseas is problematic in some cases; immigration consulting is needed. 6) Distance isn't an impediment if you have the technological support; moreover, countries

that have the same language, similar legislation, banking systems, etc. should be an obvious choice (e.g. Australia, New Zealand).

7) Opportunities for overseas business expansion advertised on the UKTI website actually

got some of the businesses interested, so more publicity needed there. 8) Some of the participants mentioned "educating the market" – future exporters should

bear in mind that the usefulness of their product/service might not be familiar to foreign markets, so this is a phase that should be undergone in the process of going abroad (connection building and educational programmes were mentioned as particular examples of support).

9) A question was posed: "Are there enough Trade Missions for manufacturers, or mostly

for service providers? What can be done there to expand the support provisions? 10) The brand of UKTI and the Mayor of London definitely helped gathering more people

on the networking events – one event was even attended by the Minister of Infrastructure. Locals see opportunities in London, so they are willing to help businesses establish in their own country first in order to build connections with London-based businesses afterwards.

Documents

GLA Consultancy repot - The London Export Plan.docx