Yorkshire’s economy risks being left behind unless more small and medium-sized businesses start exporting to emerging markets, the Trade Minister has warned.
Lord Green, the former chairman of HSBC, told the Yorkshire Post that SMEs must break into places like China, India, Brazil, the Middle East – and Libya.
He was in Yorkshire yesterday to meet business leaders to discuss the benefits of trading internationally to drive growth and stimulate inward investment.
Lord Green said: “The key common challenge is about strengthening Britain’s trade performance because that’s the only source that there is going to be of sustainable growth and job creation in the next few years as we rebalance ourselves following the economic and financial crisis.”
Yorkshire companies are underperforming the national average in international trade, with less than one in 10 active in export markets.
The minister said: “I want to encourage businesses to look at [trade] opportunities because that’s where the drive for innovation comes from, that’s where the drive for growth comes from and there are really good, interesting opportunities in the world at large.
“Let’s face it, the international environment is not as favourable as it might be, but this is the imperative that we have to follow.” Lord Green recently returned from a tour of the Middle East, taking in Saudi Arabia, the United Arab Emirates and Qatar and on Monday he visited Libya.
He said there are “absolutely” opportunities for Yorkshire SMEs in the war-torn country.
He added: “This is a country coming out of a revolution. This is the new free Libya. People I met were extremely warm to Britain.
“They are conscious that this is a historic moment for Libya; conscious also that the job isn’t yet finished; there’s still fighting going on. But they are determined to make a success of the new Libya in the 21st century.
“The opportunities are very significant as things settle down there. You have got a country which is intrinsically wealthy with very high levels of oil and gas reserves.
“This is an enormously wealthy country in principle, with a relatively small population of 8 million. Therefore, [it has] the ability over time to deliver itself a standard of living that the Middle East now enjoys.
“I think there’s a huge tourist opportunity in times to come. It has a lovely coastline and lovely climate and remarkable historical heritage centres.”
Novices to international trade can get support from UK Trade & Investment, the Government organisation. They can also get help from professional advisers, such as bankers, lawyers and accountants, said the minister.
He stressed that service sector companies should increase overseas trade. The current international trade profile is 55 per cent manufacturing versus 45 per cent services.
Lord Green stood down as chairman of HSBC in December after a 28-year career with the bank, including a period as group chief executive.
He was appointed as Minister of State for Trade and Investment in January.
He said: “I have spent the first nine months going around the regions meeting businesses of all shapes and sizes, all sectors, and actually in every region I have found world-class businesses.
“The evidence is compelling that if you take the step of exports you become more innovative, efficient and profitable. All of the signs are that this is good for business.”
Yesterday, he attended meetings in Leeds, visited exporters in Goole and Selby and spoke at the annual dinner of the NAMTEC Manufacturing Forum in Sheffield.
Neil McLean, chairman of the Leeds City Region Local Enterprise Partnership, summed up the challenge.
He said: “We have more than 100,000 businesses in the city region, many of which have the potential to grow by exporting internationally.
“However, collectively the city region is not realising its export potential as only 8 per cent of our businesses currently trade overseas.”
‘The only alternative’
The Government press office said the minister wouldn’t be drawn into a discussion about the eurozone crisis.
But in the event, Lord Green was happy to give his view on the most pressing issue of the day.
He said: “The situation remains very difficult. Everyone recognises the importance of resolving this crisis. There are some major challenges. I don’t think anybody can be relaxed about it.”
With Europe in the mire, America in weak growth mode and domestic demand unlikely to grow for the foreseeable future, the only alternative is investment and trade, Lord Green said.