Partner Article

UK vs. the World: A socio-economic review of business abroad

In the first of a series of reports with BuiltVisible here is the first in conjunction with Towergate Insurance.

Trading internationally involves a number of risks. Competition, changes in government policy, labour laws, and worker relations can all have a significant effect on profits, and many companies choose to do business overseas in order to avoid some of the risks commonly associated with their home country. However, before you move your business abroad have you considered all the risks of your chosen destination?

A recent quiz from Towergate Insurance sheds light on some common misconceptions about doing business in the United Kingdom, and raises questions about the types of consideration business owners should make before trading internationally—from human rights issues, bribery, terrorism, criminal activity, or any number of other sources. In many cases, the results Towergate Insurance received indicate that many respondents felt that doing business in the UK carried more risk than is actually the case.

For example, while business owners might think that doing business overseas means less competition, in reality businesses in Hong Kong are more likely to have increased competition from other countries than Sheffield, which has been voted third in the top ten best cities to locate a business in the UK. Businesses are also more likely to suffer from industrial action (such as strike, occupation, or slowdown) in Ho Chi Minh City than Nottingham.

However, not every question turns out solely in the UK’s favor. Although Liverpool is more likely to suffer from infrastructural issues than businesses in Sydney, Liverpool has the fastest rising productivity rate of any major city outside of London, although business activity in the Northwest achieved a three-month high and job creation in Liverpool has been some of the fastest seen since 1997.

In another example, companies doing business in Bristol are more likely to see serious industrial action than Munich, even though Bristol is fast becoming a centre for business in the UK. Over a 1/3 of UK owned FTSE 100 companies are located in Bristol, making it the second most productive city in England.

Some areas of the world simply carry different risks that others. For example, companies in Manchester are less likely to suffer from organized crime in the business sector that Helsinki. However, after analyzing some of the results of the quiz, it seems 84% of people assume that in fact, it is the reverse. In fact, a recent survey has found that Manchester has been voted Europe’s top city for business competitiveness and 4th in the world.

The results of the quiz indicate that many respondents may not be aware of the many advantages of doing business in the United Kingdom, and the considerations which should be made when trading abroad.

The government continues to drive export activity as it seeks to balance the nation’s current account, however the UK still remains a buoyant place to do business, particularly as a world leader in financial services. The cultural diversity and growth of the UK’s population offers increasing demand for goods and services, and the United Kingdom is still considered a major trade and financial gateway to the rest of Europe. The United Kingdom is in the top ten places in the world to do business [source], and #1 in terms of obtaining credit.

In a smaller world the opportunity to improve export capability is greater than ever. As always the advice remains, before considering where to trade make sure you do your homework and don’t rule out doing business at home.

This was posted in Bdaily's Members' News section by Daniel Knowles .