Ask Lord Davies

by jbolhoven on 02-Dec-09 11:41

UK creativity is highly marketable, award-winning and sought after by global business. The South West region has been identified as a creative hub with prime export opportunities.

Lord Davies, Minister for Trade, Investment and Small Business, visited Bristol on Thursday 21 January to hear your views on what Government can do to help creative companies compete in the international marketplace.

Ahead of his visit, we asked you to email us your questions for Lord Davies and we put these to him at a live Q&A event held on the day.

A summary of his answers is available below. Please note that this was not the format that was followed on the day and some general discussion and deviation took place, not all of which is annotated here.

Q. Creative Britain (DCMS 2008) identified the UK as the world’s creative hub and successive government strategies have identified the creative industries (or more broadly the knowledge economy) as a key growth sector in combating the effects of recession – how are the UK Government and UKTI in particular assisting businesses to deliver that vision?

• The Department for Business, Innovation and Skills has announced a new strategy for combating the recession: ‘Going for Growth’. The Creative Industries, with their historically higher than average rate of growth, will be important to any such developments.

• Government is rolling out a range of measures aimed at fostering a culture of enterprise, increasing knowledge and skills, minimising the negative impact of regulation and ensuring that the small businesses that make up the vast majority of the Creative Industries can access finance and advice they need to grow.

Q. Other emerging markets, such as Singapore, China and Thailand, are investing heavily in support for the Creative Industries in order to raise the competitiveness of their sectors. The UK has an advantage at present, how will UK Government support businesses in order to maintain that lead position?

Do you think that there is the case for a radical reform and financial uplift of cultural funding in our society in order that real change and benefit to a local cultural community can be created?

• DCMS’s Creative Britain strategy (2008) contained commitments to support the Creative Industries; talent, innovation, business growth and intellectual property – key drivers of success in the creative industries, are all supported by the strategy.

• UKTI forms an important part of this strategy, and is committed to maintaining the UK’s position as a global creative leader: in the past two years we have helped well over 1000 creative companies gain access to trade missions and international trade shows and we are reaching out to new businesses all the time.

• Help in market also includes the Overseas Market Introduction Service to help businesses determine their own international strategies.

Q. Which are the key global growth points for the Creative sector in the opinion of UKTI? How does UKTI then prioritise its efforts into focusing on those specific markets, for example would we be able to scope a design focused mission to a particular country?

• We seek advice from our industry advisory groups and overseas networks to keep in touch with the markets that offer most economic opportunity for the various sub-sectors of the creative industries.

• Markets such as China, Japan, the USA and India are currently important for the creative sector. Other markets that are coming up include South America, Eastern Europe and other high growth markets in Asia.

• UKTI SW will be happy to discuss organising a design focused SW market visit. This will, of course, depend on the availability of funding and interest shown by companies.

Q. Most ambitious companies would love to have an employee available to go and spend some time in China or South Korea for example, to do some groundwork, make contacts and so on, possibly with a view to setting up an office in these areas.  This is simply not possible for small businesses. What incentives are available for small businesses to export? And what local information and logistical help can they expect from UKTI overseas offices?

• Yes, as long as they have the necessary resources, commitment and an exportable product or service, even micro companies can be supported to develop their export potential. In the South West, in addition to core UKTI services, we also have access to European funding that can be used to make small companies more export ready.

• Via UKTI teams based in British Embassies and Consulates overseas we can, using the Overseas Market Introduction Service, help UK companies to identify the best markets for their products or services and then to identify potential customers or partners in those countries. It is worth emphasising that we have strong teams in the Education/training sector in India, Thailand, Malaysia, Singapore, Hong Kong and China.

• Many UKTI offices have tele-conferencing facilities that can be used to connect UK clients to our overseas colleagues.  However, it should be noted that, in markets such as China and South Korea, actual face-to-face contact is often an essential component in winning business.

Q. At what stage of a company’s development does the government plan to invest? i.e. through the Technology Strategy Board (TSB) or other mechanisms. In particular, does the government have any plans to financially match small independent companies that have good innovative ideas and IP? Although this is not, on the face of it, an export question, it actually does have a major impact on Britain’s ability to develop world beating products for export.

• The Grant for Research and Development is a business support initiative which provides funding to help individuals and small and medium-sized businesses research and develop technologically innovative products and processes. The grants are discretionary and the South West of England Regional Development Agency currently provides grants from £20,000 to £500,000. It draws on the advice of independent technical specialists and internal expertise to appraise applications and decide which projects can receive funding.

• If you are a small or medium-sized business seeking funding for a Research and Development Project, you should contact your local Business Link in the first instance.

Bristol is a centre of Natural History and factual programming with a very strong track record of co-production and export (c.f. Icon Films) and UKTI has played a significant part in assisting TV businesses in the region. Our next growth area is digital media. How will UKTI assist in generating the same successes in a market which has a less well established export trade framework?

• UKTI are proud of the help we have given TV businesses in the South West, for example our work with local firm Icon Films, assisting them with their visit to the RealScreen Summit in Washington DC.

• The UK's creative industries have always been at the cutting edge of creative and technological innovation and UKTI are striving to ensure that we offer the same quality of assistance to digital companies as we do to TV.  A recent example of assistance was the mission of local digital companies we took out to the Asia TV Forum in December.

In the creative industries IP and copyright are key assets, how is the Government helping businesses to protect those assets? Is it possible for UK Gov/UKTI to assist internationally where piracy is a particular problem when considering export into certain markets?

• The Government announced the Digital Economy bill in November 2009, which sets out Government plans to ensure the UK is at the leading edge of the global digital economy. It will create a robust legal and regulatory framework to combat illegal file sharing and other forms of online copyright infringement and give Ofcom a specific new responsibility to significantly reduce this practice, including two specific obligations on Internet Service Providers: the notification of unlawful activity and, for alleged serial-infringers, collation of data to allow rights holders to obtain court orders to force the release of personal details, enabling legal action to be taken against them. Education will also play a big part – changing attitudes.

Many countries, including those in the EU, clearly offer long term, financial and other incentives for export led manufacturing businesses that are aimed at reducing fixed overheads and encouraging international trade. However, the UK Government appears to regard such incentives for wealth and job-creating businesses as either unaffordable or illegal and so refuses support on the excuse that this enforces greater business efficiency.

Yet efficiency savings for many UK businesses are now no longer possible. Profit margins are so small that many SMES can't (or won't) expand. Employment and other external costs are now so disproportionate to the reward for running a small business that employment suffers & investments in R&D, product development, sales and marketing are reduced. Currency fluctuations also make long term, competitive, export price fixing difficult.)

Given these negative influences on small business investment will the Government consider granting special status to businesses that can demonstrate plans to expand through exports and use this status to reduce certain costs such as Business Rates?

• It is not possible to single out different types of business for rate relief; a new business rate relief would reduce contributions to the National Pool and thus reduces funds available for local government generally.  Central government would have to increase the Revenue Support Grant at the expense of other taxpayers, or services would have to be cut, or council tax would have to rise.

• There is already rate relief within the business rates system for businesses occupying a sole low value property. The Government introduced the Small Business Rate Relief scheme in 2005 to help small businesses reduce their Business Rate bill.
 
• Eligible businesses with rateable values of below £5,000 will get 50% rate relief. This relief will decrease on a sliding scale of 1% for every £100 of rateable value over £5,000, up to £9,999. The relief is available to ratepayers with either one property with a rateable value under £15,000 (or £21,500 in London) or if they have more than one property, but the combined rateable value is less than £15,000 (or £21,500 in London). Eligible ratepayers with properties above £10,000 but below £15,000 (or £21,500 in London) will have their bills calculated using the Small Business Multiplier.

• These thresholds will change on the 1 April 2010 in line with the 2010 Revaluation

Comments from the floor - Katherine Corich, Sysdoc. Lord Davies made several points about the need to get more women into business. Katherine said that she had also heard him make a previous speech on this subject of getting more women into business and that, as a contributor to the Women's Enterprise Task Force earlier in the year, she was keen to hear that he took this seriously. Lord Davies repeated that the Government must do all it can to create an environment where more women run their own companies and take their place at board level in the top companies.

 

Tagged:International Trade