UKTI AND WELSH FIRMS

Over the weekend, I had a twitter dialogue with Rhuannedd Richards, currently chief executive of Plaid Cymru.

She was responding to a comment by the First Minister that having access to the UK Government's international division, UKTI, was one advantage that Wales had as being part of the UK. Rhuannedd noted that she was "Surprised that Carwyn Jones used how Wales "benefits" from UKTI to justify continuation of UK. Wales has never been important to UKTI".

I am wondering where she received this information as it is certainly different to what I was told by UKTI in a meeting a few weeks ago. Indeed,  I was informed that UKTI had supported 376 Welsh firms to internationalise their activities even though this should be a devolved matter. Indeed,  more crucially, I wonder how this compares to whatever services are now offered by the Welsh Government, especially given that it was Ieuan Wyn Jones, when economic development minister, who abolished IBW (International Business Wales) which previously had responsibility for all internationalisation activities?

So what can UKTI offer to Welsh businesses?

The UKTI’s Overseas Market Introduction Service is a flexible business tool that lets British companies commission the services of trade teams located in overseas missions across the world. The Market Visit Support programme also provides assistance to new-to-export or new-to-market SMEs visiting overseas markets as part of their trade development process. However, in this respect, UKTI also provides some direct funding to the Welsh Government to support their own mission programmes.

UKTI also works in partnership with other organisations to deliver internationalisation initiatives. For example, the Export Marketing Research Scheme is an initiative run by the British Chambers of Commerce as a contractor to UKTI. It provides advice and co-funding (at up to £5k per project) for eligible companies to carry out their own market research overseas. The Chambers can also provide support for an Export Communications Review, which examines a company’s strategic communications approach to trading overseas.

But the First Minister should not just quote the example of UKTI when it is politically expedient if the Department for Business in Wales, as I have been reliably informed, is doing little to ensure a closer relationship with this body.

And if the economy is important to the Welsh Government, then more could, and should be done to help businesses take full advantage of exporting opportunities. In fact, Welsh firms still only account for 2.6 per cent of all UK exporters despite a growth in the value of exports since 1999, which suggests considerable potential within the Welsh business community for further overseas expansion if only the right support and advice was available.

However, that can only be achieved if there is better co-ordination and co-operation between the Welsh Government’s international branch and the UKTI in 2012. Not only could this begin a long overdue entente cordiale between the two administrations but, more importantly, should benefit the Welsh economy at a time when businesses need every help they can get.

WALES AND CHINA - SHOULD WE BE FOCUSING OUR EFFORTS ON THE SMALLER INNOVATIVE CITIES?

The First Minister of Wales recently visited China to sign an agreement with Chongqing, a major city in the west of the country.

This commits Wales to furthering economic development links and continuing to work together with this municipality in the fields of science, technology, culture, health, education, agriculture, forestry management, environment, governance and tourism.

Whilst a visit by the First Minister to China to develop further links is to be welcomed, this is hardly groundbreaking progress.

In fact, this latest relationship merely builds on an earlier memorandum of understanding (MOU) between the Chongqing Municipal Government and the Welsh Assembly Government, signed by Rhodri Morgan in 2006 in which they agreed to collaborate and co-operate in a number of areas.

As regular readers of this blog will know, I am an avid supporter of Wales going out to the World  to not only trade with different nations, but to form important relationships that can help change the way we work and live.

However, I find it disappointing that in twelve years of devolution, the Welsh Government has made little progress beyond reaffirming an existing arrangement with a single Chinese City.

One would have thought that as a small trading nation, we would be choosing our partnerships carefully, especially as much of the focus of the recent trade missions was in building links between universities and businesses in both countries.

In fact, it is worth noting that according to the influential business periodical, Forbes China, Chongqing was not rated as one of the twenty five most innovative cities on the Chinese mainland this year.

Ranking	City	Administrative Levels	Province	Innovation Index
1	Shenzhen	City with separate budgets	Guangdong	1
2	Suzhou	Prefecture-level	Jiangsu	0.998
3	Shanghai	Municipality	-	0.992
4	Beijing	Municipality	-	0.978
5	Wujiang	County-level	Jiangsu	0.950
6	Wuxi	Prefecture-level	Jiangsu	0.949
7	Hangzhou	Provincial capital	Zhejiang	0.945
8	Kunshan	County-level	Jiangsu	0.922
9	Changshu	County-level	Jiangsu	0.920
10	Zhangjiagang	County-level	Jiangsu	0.919
11	Dalian	City with separate budgets	Liaoning	0.892
12	Dongguan	Prefecture-level	Guangdong	0.889
13	Nantong	Prefecture-level	Jiangsu	0.879
14	Ningbo	City with separate budgets	Zhejiang	0.876
14	Shaoxing	Prefecture-level	Zhejiang	0.876
16	Yixing	County-level	Jiangsu	0.864
17	Zhongshan	Prefecture-level	Guangdong	0.861
18	Wuhu	Prefecture-level	Anhui	0.847
19	Guangzhou	Provincial capital	Guangdong	0.838
19	Hefei	Provincial capital	Anhui	0.838
21	Taicang	County-level	Jiangsu	0.814
22	Tianjin	Municipality	-	0.803
22	Foshan	Prefecture-level	Guangdong	0.803
24	Yangzhou	Prefecture-level	Jiangsu	0.784
25	Changzhou	Prefecture-level	Jiangsu	0.781

Not surprisingly, the number one city on the list was Shenzen in South East China (across from Hong Kong) where the total output value of high-technology products reached 1 trillion yuan (£100 billion) in 2010.

Therefore, if Wales is to build international links that benefit our universities and the technological capacity of our business community, then surely policymakers should consider innovation hotspots like Shenzen.

But given the size of Wales, perhaps it should not be large cities like Shenzen or Chongqing that should be the focus of the Welsh Government, especially as they would also be developing partnerships with other economies looking for trade links with the most populous areas of China.

For example, businesses from Sheffield have also recently taken part in a trade mission to Chongqing as they seek out international trade opportunities. And in the same week that Carwyn Jones was signing his new MOU, the Belgian port of Antwerp was entering into agreements with the city for training purposes and to create trade partnerships.

So where should Wales focus its effort on building stronger links with China?

It is worth noting that more than half of cities on the list of the most innovative in China are far smaller than Chongqing.

Indeed, of the top ten, four have a population of less than two million and are located less than two hours’ drive from the business giant that is Shanghai.

Given their small size, perhaps these are the cities that Wales has more in common with and, more importantly, would be more willing to have a closer relationship than the one we currently enjoy with Chongqing.

The Welsh Government remains determined to focus all of its efforts on one Chinese city, but surely we should start to build links with some of the smaller innovative cities in China?

At the very least, it would enable  universities and businesses to identify new opportunities and establish a more direct and less competitive route into one of the World’s fastest growing economies.