Editor: Please discuss the current economic and business environment in the UK.
Lopez: Despite the current global economic turmoil and unique economic challenges currently faced by Europe, the UK business environment remains positive, forward-looking and open for business. The UK government is committed to creating the supportive business environment that will encourage a private-sector-led economic recovery. Today, the UK is the world’s sixth-largest economy and one of the world’s top ten manufacturers (six of the world’s top ten vehicle makers are based in the UK). It is also the world’s second-largest services exporter (after the U.S.) and the world’s sixth- largest trading nation. It also remains the most attractive place in Europe for a European headquarters: more overseas companies have their European headquarters in the UK than in France and Germany put together.
There’s a lot for the UK to look forward to in 2012. Not only will we celebrate Her Majesty The Queen’s Diamond Jubilee, but the global spotlight falls on the UK as we gear up to make the most of the business opportunities that the 2012 Olympic and Paralympic Games, to be held in London, will create for both immediate and long-term growth. With the Olympic Park completed on time and on budget, we’re now on track to host one of the most spectacular games ever. But we also want to make sure 2012 carries a powerful and lasting legacy. This was core to our original bid, and it’s been integral to all our plans. Nowhere are the strongest economic, social and sporting legacies more evident than in East London – but all parts of the country will experience them over time. That’s why, in many ways, London 2012 can be called the Legacy Games.
Editor: What are the benefits of the UK as a business location? We understand the World Bank rated the UK fourth in the world for its "Ease of Doing Business Ranking."
Lopez: The UK is the easiest place to set up and run a business in Europe. According to the World Bank, it takes just 13 days to set up a business in the UK, compared to the OECD average of 15 days. It ranks the UK first in Europe and, as you’ve noted, fourth in the world for ease of doing business. Additionally, our Plan for Growth will cut corporate tax rates (to one of the lowest in the G20) and regulation, making the UK the best place in Europe to start and grow a business, encourage investment and exports and create a more educated and flexible workforce.
We want to help businesses of all sizes and attract investors and entrepreneurs by providing a competitive environment. The Plan for Growth (cutting corporate tax rates, investing in infrastructure, developing skills, cutting regulation and reducing the planning burden) is about providing that competitive platform.
The banking report proposals would allow the UK to remain a leading global financial centre and would continue to enable international banks to compete on a level playing field, without exposing taxpayers to massive bailouts of failing banks.
Editor: Please discuss the key growth sectors for companies doing business in the UK.
Lopez: East London’s tech cluster (dubbed “Tech City”) is home to one of the largest concentrations of small, fast-growing digital technology companies in Europe, and development of this established tech hub is a priority for the government. In July 2008, it was home to some 15 high-tech companies: today it hosts over 500. UK Trade & Investment (UKTI) established the Tech City Investment Organisation (TCIO) to help take this work forward; it is led by highly experienced technology entrepreneur Eric van der Kleij, who is supported by dedicated UKTI staff in the U.S.
Green industries are at the forefront for the UK government development initiatives. The UK is a leading global player in wind energy and has a clear lead in the development of offshore wind. The U.S. Department of Energy has forecast that wind energy will play an increasingly important role, providing 20 percent of America’s electricity by 2030 (more than double the current percentage). Key markets in the U.S. for UK companies that operate in this field are currently Texas, the Midwest and the East Coast.
There’s also an emphasis on raising public rail and transit to the highest possible standards: the investment in high-speed rail and urban systems in the U.S., flowing from stimulus support and the growth in passenger services, will create significant opportunities for UK capability as the industry seeks to become more efficient and strives for better value for the money. Opportunities are reflected in low-carbon solutions, financial and professional services, engineering design, cost consulting and operators.
Editor: Is the UK government targeting certain industries with its support?
Lopez: UKTI is focused on high-growth and innovative small and medium-sized enterprises (SMEs). We want to encourage significantly more UK SMEs to export and seize opportunities in high-growth and emerging markets.
We are supporting UK companies to win high-value opportunities through a programme of intensive support for larger companies seeking to win big contacts and identifying major supply chain projects for SMEs across a range of sectors.
The UK is among the top three destinations globally for inward investment. We are seeking to attract institutional investors to large-scale infrastructure and regeneration projects in the UK.
In the New York region, the target sectors of most importance for the UK are financial and business services, information and communications technology, creative and media, pharmaceuticals, life sciences, and energy and the environment.
Editor: What specific services does UKTI offer to help foreign businesses find and establish suitable locations in the UK?
Lopez: We provide bespoke services for foreign direct investors, including in-depth market analysis, predicative targeting and tailored business propositions. Twenty-one new enterprise zones have been introduced across the UK, offering fiscal incentives, including business rate relief, to companies setting up in those areas.
We want to encourage the brightest and the best to locate to the UK. In March 2011, we introduced new visa rules designed to fast track settlement for high-value investors and entrepreneurs.
Editor: What external resources do you rely upon? Do you consult with outside industry and legal experts in developing your services to companies?
Lopez: We work closely with a range of partners, including economic development agencies, chambers of commerce and service providers – such as lawyers, accountants, recruitment consultants, commercial property agents – on both sides of the Atlantic. We share common objectives with the British-American business chapters and work in partnership with them in both the UK and the U.S.
Editor: What is UKTI doing to promote open trade and global competition?
Lopez: The work that UKTI does in the U.S., alongside the UK Foreign Office and other government departments and British embassies across the world, is crucial to the UK government’s goal of regenerating strong, sustainable and balanced growth in the UK and overseas. The government’s current strategy is based on three themes: strengthening the multilateral trading system; enabling developing countries to benefit from trade and investment; and maximising and realising the opportunities for UK businesses to trade and invest, and to attract investment to the UK.
The UK Government is taking a whole-of-government approach to realise these, in the UK, the U.S. and in each of our partner countries. Some we can do in our own backyard, like increasing British competitiveness through lowering our corporate tax rate or investing in infrastructure. Outside of the UK, we will work to expand the EU single market, make the case for concluding the Doha trade round and defending the multilateral trading system, help the WTO in defending us from protectionism, support the European Commission in negotiating ambitious free trade agreements with Canada, India and Singapore, and work with business to identify and remove regulatory barriers to trade and investment.
Editor: Discuss the broad picture of UK-U.S. diplomatic and trade relations and how our readers can connect with UKTI.
Lopez: The UK and the U.S. are strong partners with common interests and shared values across a broad range of issues: global security, fighting terrorism and defending human rights. And it’s a strong economic relationship, too. This special relationship includes issues like financial sector reform, where UK and U.S. policymakers frequently coordinate and take stock of conditions – the G20 and G8, for example, are very important in this regard.
But we are also each others’ single largest investor – one million people on each side of the Atlantic go to work each day for either a British company in the U.S. or a U.S. company in the UK. UK investment stock in the U.S. is $432.5 billion, and that’s 19 percent of total foreign investment in U.S., or nearly 140 times China’s investment stock here. The UK imports more from the U.S. than it does from Brazil, Russia, India and China combined, and the U.S. is Britain’s largest export destination. Consequently, this is why the UKTI network in the U.S. is the largest footprint UKTI has outside the UK. UKTI has teams located in eight British Consulates across the US, in addition to the team at the British Embassy in Washington, DC, enabling entrepreneurs across America to easily learn more about what UKTI - and the UK - can do for their enterprise.