By Andy jalil – Foreign Correspondent — In order to expand their businesses, Britain’s small and medium enterprises (SMEs) are looking increasingly at the Commonwealth countries which provide further opportunity for trade to progress. One is usually faced with large numbers when discussing trade and the numbers don’t come much bigger than for the Commonwealth.
A diverse grouping of 52 states, covering Africa, Asia, parts of South America, Europe, Caribbean Islands and the Pacific, the Commonwealth is home to some 2.3 billion people and has a GDP projected to reach $14 trillion by the end of the decade.
The Commonwealth contains some of the fastest growing countries in the world, and trade between member states is expected to rise strongly in the coming years, from over $680 billion at present to surpass $1 trillion by 2020. And yet the Commonwealth opportunity for Britain’s smaller exporters is far more human than these numbers imply.
Chief Executive of the Commonwealth Enterprise and Investment Council (CWEIC), Oliver Everett, says: “The Commonwealth needn’t mean anything. And yet it means a lot to people because of the historic relationship. That goodwill encourages people to think of each other as trusted partners.”
He also says the Commonwealth factor makes it 19 per cent cheaper to operate across the area. Adding: “That’s because of the English language, often common legal systems, and mostly common financial systems.”
Not all member states are risk-free, with the likes of Australia a safer place to do business than some of the West African countries, for example. But familial links between people living in these countries also serves to facilitate trade. Everett said: “There’s good evidence that British entrepreneurs are going back to what they regard as their mother countries in order to do business. Very often because of the historical trading relationships, there are long standing trade routes that can be made use of.”
There is also a plethora of organisations dedicated to helping businesses of all sizes trade with other Commonwealth nations. On top of country-specific groups like the UK India Business Council, Everett’s CWEIC has a remit “from the 52 heads of government to get trade and investment going around the Commonwealth.”
One of the programmes CWEIC runs is CommonwealthFirst. “It’s designed to take 100 of the best UK SMEs and get to them exporting throughout the Commonwealth,” says Everett. A three-year programme, it involves tailored trade missions to high-growth markets like Malaysia and Nigeria, training and mentoring, and access to networks and introductions.
The CWEIC also runs the Commonwealth Trade Initiative. A platform that links up businesses across the 52 nations, the purpose is to support firms to find and develop export opportunities. It also gives access to services to help businesses develop their export capabilities. Its asset and business finance solution partner IDF, for example, provides financing so that firms can purchase the assets or fund the business development needed to successfully to cover essential business spending associated with selling overseas.
In general, successfully exporting to Commonwealth countries involves much the same as successfully exporting to any nation, says Everett. “You’ve got to find a good partner on the ground, the right person to manage the relationship. It does involve some time and effort, and there is sometimes a reluctance among businesses to put the work in. But there are good examples of where it has been worthwhile.”
Companies that are likely to do particularly well include those that can leverage Britain’s reputation for selling high-quality products. But any UK firm that can add value to what local companies are doing, particularly in terms of capital and skills, will find a ready audience. “There is a need for UK expertise, and you don’t have to be a large company to provide that. The real reward for SMEs will be investing in long-term relationships, and bringing your skills and capital,” says Everett. “It’s not just a question of selling your goods, but building a lasting partnership.”
One bit of welcome news for SMEs — which came in the Chancellor’s recent Autumn Statement — was that corporation tax will be cut to 17 per cent. It will go some way towards restoring economic faith for small businesses and encourage the entrepreneurial community. Quite simply — any plans to reduce costs and outgoings will be of benefit to SMEs hoping to grow and expand during the current economic climate.