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Winning business: changing markets

Internationalism has taken something of a hammering over the past 18 months, but constructive global citizenship should always be at its core. An internationalist foreign policy for developed nations would use their economic and technological wealth to promote a better and more prosperous world for everyone.

Whatever social caveats might have been mooted in global political discourse in recent times should not detract from the overarching benefits that a more connected world can offer to businesses. Here at Western Business Union Solutions, we operate with the ethos of opportunity. We are the facilitators; we want to build bridges, not walls.

Money, whatever spin you put on it, is ultimately what makes the world go round. Ensuring the fluidity of cash flow, therefore, should be a priority for any government or business. Cash flow was cited as the number-one concern and threat to growth facing UK companies in 2017. Currency volatility, meanwhile, is another worry, ahead of credit availability, regulation and even competitors. Late payment and debt recovery are also anxieties, and the time spent on payment processes across the UK’s micro, SME and lower corporate institutions ranges between 12 and 50 hours a week. Streamlining money matters, then, is surely crucial to boosting productivity.

Against the backdrop of Brexit, WUBS recognises the pressing need for the UK to maintain its role as a world leader, lest it be forgotten as a major player on the global economic scene. Almost half of all UK businesses expect growth in their international activity over the next six to 12 months, and so, outside of hope for a favourable set of terms post-Article 50, WUBS is committed to offering support with the necessary resources from both the private and the public sector. This will include intellectual/human capital, and financial, technological and information resources that SMEs especially will need to navigate these turbulent times.

Alongside a more nuanced approach to internationalism generally, the need for a deeper understanding of technology’s impact on businesses’ bottom line is paramount. There has never been a more important time to embrace and adopt technology and ensure UK firms are not standing on the sidelines as their revenues are reduced. Technological obsolescence, that is to say competition brought about by digitisation or innovation, poses a significant risk to lower corporate organisations in particular, with 25.5 per cent of their revenue threatened by competitors advancing ahead of them.

WUBS asks whether businesses are being taught to use technology effectively enough. Websites are admittedly commonplace nowadays, but how many of those cater for e-commerce? There is perhaps a potential role for government here in introducing set standards. In Germany, for example, it is compulsory for businesses to join their local chamber of commerce.

The full scale of the economic side effects of Brexit is yet to be confirmed, and it is for that reason that the UK must be prepared for either a hard or soft eventuality, a distinction plausibly defined by the country’s access or lack of access to the single market. In either case, the issue of exporting is suddenly thrown into sharper focus.

As the British pound moves in favour of exporters, a larger percentage of overall UK business is being derived from exports, with over a quarter (27.6 per cent) of current business revenue coming from these, a hike of 18.5 per cent on two years previously. Strong forward dated guidance will add to this share: 53.3 per cent of UK businesses expect to increase their proportion of export earnings relative to their overall revenue by roughly 8.3 per cent.

Unsurprisingly, exports make up a larger slice of the pie for the bigger UK corporations, with companies turning over between £20m and £100m per year indicating that a substantial 37.5 per cent of their revenue is owed to trading overseas. Though this figure has stayed relatively static for most larger corporations over the past year, 53.3 per cent anticipate the export proportion of their business to increase over the next year. As exports rise in importance and account for bigger proportions of UK businesses’ revenue, the roles of government policy and financial providers must reflect that, with frameworks for ongoing support and education.

Over 80 per cent of UK businesses have highlighted their renewed focus on international vendors and supply chains in the light of the country’s decision to leave the European Union, with a further 12.5 per cent saying that there would be considerable focus placed on their vendors going forward, emphasising the shift towards foreign partnerships and alliances over having a direct presence abroad. Given that the crux of UK business is service-led these days, rather than rooted in raw materials, striking the right partnerships, economically and technologically, is tantamount to a self-sustaining UK.

While the Brexit vote has understandably dominated the rhetoric surrounding the UK’s economic future, it would be disingenuous to suggest that this can only be discussed within the context of the EU. Indeed, the opportunistic largesse of the global economy was one of the key arguments of the Leave campaign. Apart from the historically developed countries outside the EU, China, India and Brazil represent three other potential trading corridors; and fostering fluid and positive relationships with these countries will no doubt be central to a post-Brexit economy.

In order to build those positive relationships, WUBS, at the forefront of any such possibility, urges the government and industry alike to nurture and develop their SMEs. It is they that form the spine of the economy, as they number the most. If empowered properly, they will achieve the growth that the UK requires.

Lord Price, Trade Policy Minister

“Trade is at the heart of government as we look to champion a liberal trade agenda that boosts our prosperity and helps UK businesses take advantage of new markets around the world. “Government is not acting in isolation, and we are speaking regularly to businesses large and small to ensure we give them the support they need to seize new opportunities – support like the new Exporting is GREAT hub, which gives businesses access to advice, financial and regulatory support and live contract opportunities.”

Quote taken from a New Statesman feature in print 17th Feb 2017

business.westernunion.co.uk

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Twitter: @WUBusiness

White paper: business.westernunion.co.uk/ docs/changing-markets.pdf

Western Union Business Solutions is an official partner of Exporting is GREAT.

Kerry Agiasotis is president of Western Union Business Solutions.

Photo: Getty
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The rise of the green mayor – Sadiq Khan and the politics of clean energy

At an event at Tate Modern, Sadiq Khan pledged to clean up London's act.

On Thursday night, deep in the bowls of Tate Modern’s turbine hall, London Mayor Sadiq Khan renewed his promise to make the capital a world leader in clean energy and air. Yet his focus was as much on people as power plants – in particular, the need for local authorities to lead where central governments will not.

Khan was there to introduce the screening of a new documentary, From the Ashes, about the demise of the American coal industry. As he noted, Britain continues to battle against the legacy of fossil fuels: “In London today we burn very little coal but we are facing new air pollution challenges brought about for different reasons." 

At a time when the world's leaders are struggling to keep international agreements on climate change afloat, what can mayors do? Khan has pledged to buy only hybrid and zero-emissions buses from next year, and is working towards London becoming a zero carbon city.

Khan has, of course, also gained heroic status for being a bête noire of climate-change-denier-in-chief Donald Trump. On the US president's withdrawal from the Paris Agreement, Khan quipped: “If only he had withdrawn from Twitter.” He had more favourable things to say about the former mayor of New York and climate change activist Michael Bloomberg, who Khan said hailed from “the second greatest city in the world.”

Yet behind his humour was a serious point. Local authorities are having to pick up where both countries' central governments are leaving a void – in improving our air and supporting renewable technology and jobs. Most concerning of all, perhaps, is the way that interest groups representing business are slashing away at the regulations which protect public health, and claiming it as a virtue.

In the UK, documents leaked to Greenpeace’s energy desk show that a government-backed initiative considered proposals for reducing EU rules on fire-safety on the very day of the Grenfell Tower fire. The director of this Red Tape Initiative, Nick Tyrone, told the Guardian that these proposals were rejected. Yet government attempts to water down other EU regulations, such as the energy efficiency directive, still stand.

In America, this blame-game is even more highly charged. Republicans have sworn to replace what they describe as Obama’s “war on coal” with a war on regulation. “I am taking historic steps to lift the restrictions on American energy, to reverse government intrusion, and to cancel job-killing regulations,” Trump announced in March. While he has vowed “to promote clean air and clear water,” he has almost simultaneously signed an order to unravel the Clean Water Rule.

This rhetoric is hurting the very people it claims to protect: miners. From the Ashes shows the many ways that the industry harms wider public health, from water contamination, to air pollution. It also makes a strong case that the American coal industry is in terminal decline, regardless of possibile interventions from government or carbon capture.

Charities like Bloomberg can only do so much to pick up the pieces. The foundation, which helped fund the film, now not only helps support job training programs in coal communities after the Trump administration pulled their funding, but in recent weeks it also promised $15m to UN efforts to tackle climate change – again to help cover Trump's withdrawal from Paris Agreement. “I'm a bit worried about how many cards we're going to have to keep adding to the end of the film”, joked Antha Williams, a Bloomberg representative at the screening, with gallows humour.

Hope also lies with local governments and mayors. The publication of the mayor’s own environment strategy is coming “soon”. Speaking in panel discussion after the film, his deputy mayor for environment and energy, Shirley Rodrigues, described the move to a cleaner future as "an inevitable transition".

Confronting the troubled legacies of our fossil fuel past will not be easy. "We have our own experiences here of our coal mining communities being devastated by the closure of their mines," said Khan. But clean air begins with clean politics; maintaining old ways at the price of health is not one any government must pay. 

'From The Ashes' will premiere on National Geograhpic in the United Kingdom at 9pm on Tuesday, June 27th.

India Bourke is an environment writer and editorial assistant at the New Statesman.

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