Known as global start-ups, these are generally defined as new ventures that sell their goods or services in international markets through taking advantage of new technologies and changes in consumer behaviour.
Amazon, the online retailer, is probably the best example of such a business, having been determined, from its first day of trading, to be a major global player.
Not surprisingly, global start-ups are particularly attractive to governments as they grow quickly to create employment and turnover from high value added international activities.
They do so by leveraging their global knowledge of business in their chosen niche market to expand internationally over a short period of time, adapting their business model as they develop.
Some policymakers make the classic mistake that such global businesses are only related to emerging sectors such as IT, biosciences and digital economy.
This is despite increasing evidence that businesses created within other sectors, especially those that are service-based, are also quickly becoming global without being dependent on technology-based advantages.
Instead, they focus on other factors to internationalise quickly, such as improving productivity, introducing new methods of production and focusing on service delivery.
So how can you develop such global start-ups?
Certainly, there is a case for governments to provide more tailor-made policies and programmes to encourage indigenous businesses to fast track their international development from day one.
However, there is also a drive by some policymakers to adapt the traditional foreign direct investment model to develop the phenomenon of global starts.
One such example is the Global Entrepreneur Programme (GEP). This is an initiative established seven years ago by UK Trade and Investment (UKTI), the Westminster Government’s international trade division.
Rather than focusing on large inward investment projects, its aim is to identify the world’s brightest entrepreneurial talent and then get them to use the UK as a strategic headquarters and location for international expansion.
Operating as a high-level dating agency, the GEP’s aim is to go beyond normal business support and act as a catalyst to bring together these entrepreneurs with potential investors, entrepreneurial management and strategic partners in the UK to transform their initial ideas into global success.
To date, GEP has worked with over 85 entrepreneurs, and brought in over £150 million in venture capital investment to help grow the next generation of global firms.
So how has UKTI achieved this success?
Essentially, they have gone outside the civil service straitjacket and developed what many would think is an impossible combination, namely a group of individuals working within a government department who can spot early stage opportunities, introduce entrepreneurs to the right investors and get things done, no matter what the issues.
Of course, these so-called “dealmakers” are not your ordinary civil servants. Instead, they are a group of experienced serial entrepreneurs with extensive technology and global business know-how who have been recruited because of their empathy with other entrepreneurs looking to set up an international venture.
Through their specialist networks in key technology markets and previous experience of raising capital, they are ideally placed to help those businesses looking to set up their base in the UK as a home for their global headquarters.
Their “hands on” approach means that they essentially act as more than just your average public sector client manager. Instead they work closely alongside entrepreneurs to assist them to fully globalise their business opportunities not only when they launch, but also as the business grows.
As the UKTI broadly boasts, such individuals are the “magic and maverick ingredient in the GEP mix”.
The question is why we don’t have such individuals working within Wales and focusing on programmes that combine the potent mix of entrepreneurship and internationalisation?
There is no doubt that the Welsh economy needs to up its game internationally, especially as we currently only have 2.7 per cent of the total number of exporters in the UK and one of the worst export performances of any region.
However, given the bureaucratic nature of the civil service within Wales, especially within the Department of Economy and Transport where form filling rather than supporting businesses seems to be the norm, it would take an enormous leap of faith by the Minister to change the culture of an organisation that encourages an environment which stifles any innovation or personal initiative.
If WAG was really serious about developing a new approach to economic development, then it should establish a group of “magic” and “maverick” business advisers with experience of entrepreneurial management within the heart of economic development, as the UKTI has done. This would enable private sector experience and expertise to be combined with the ability of Government, when it so wishes, to cut through red tape and open doors to the right people.
Who knows what economic success such individuals could bring to the Welsh economy? Perhaps we would then be creating the next Amazon with its headquarters here in Wales rather than merely being the location of one of its many global distribution centres.
