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Overseas opportunities for energetic entrepreneurs
APRIL 2019 ÂŁ4.50
Bangalore on the rise
In this issue
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ISSN 2631-665X
665002
04
The Silicon Valley of India is launching unicorns every year. What does the future hold?
Dyson rival SharkNinja invests in the UK
Are these the most awkward Brexit moments?
Leveraging Brand Britain is blockchain for booming across international trade the wold
Join the thousands of UK businesses like Mo Bro’s that are successfully selling overseas. Visit great.gov.uk
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Mo Bro’s Leicester, UK
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contents REGULARS 7
From the editor
8
World tour
10 The lowdown
columns 11
Greg Sutch
13 Jeremy Thomson-Cook 28
4
Mark Price
14
50
60
Working women in these locations enjoyed the most maternity leave
The most awkward and cringeworthy moments of Brexit – so far
How different UK SMEs are leveraging Brand Britain when exporting
Post-pregnancy pressure
A divorce to remember
Brand Britain is booming
16
56
64
While Brexit might cause chaos for many companies, sex parties saw a spike
Benefits and drawbacks from the different ways the EU facilitates trade
Beyond bitcoin, blockchain can help firms scale abroad
The good and the bad
What’s the big deal?
Blockchain in business
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SharkNinja
Dyson’s US rival is pushing into the UK, one home appliance innovation at a time
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Business boom in Bangalore
The Karnataka capital has become a great hotbed for tech startups thanks to its unmatched talent
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The Mayor’s International Business Programme helps ambitious high-growth (scale-up) companies from London’s technology, life sciences, creative and urban sectors to expand their businesses internationally.
Tailored to fit a company’s specific international growth ambitions, this exclusive programme provides:
MENTORING SCHEME
WORKSHOPS & EVENTS
TRADE MISSIONS
CORPORATE ENGAGEMENT
Expert help and advice from those who have experienced it first-hand
Navigate the nuances of doing business in overseas markets
High-profile, targeted opportunities to help evaluate a market first-hand
Putting you in touch with large corporations who are keen to innovate and work with agile SMEs
For more information on the programme, please visit
gotogrow.london
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FROM THE EDITOR
CONTRIBUTORS Emma Sayle
Offering her personal insights about how Brexit has impacted her business, Killing Kittens, she says it’s actually turned on a lot of people as the sex party company is thriving
Jeremy Thomson-Cook
As the economic climate gets increasingly unbearable, the chief economist at FX solutions provider WorldFirst offers some pearls of wisdom for leaders to protect themselves against the heat
PRESTIGE WORLDWIDE
B
ritain was once a serious force to be reckoned with. You could have said it had worldwide
prestige and that would’ve been more factual than boastful. But, arguably, the three-year Brexit bewilderment has showcased the UK as a country that doesn’t know its backside from its elbow. To that end, we’ve rounded up the most excruciating Brexit moments to have taken place across the country
Rhian Kempadoo-Millar
Founded out of Yorkshire, hat maker Kempadoo-Millar wants to make the flat cap “funky” and her mission has caught the eyes of A-Listers as well as shoppers overseas
Angus Shaw
With insights from Aston University economics professor Agelos Delis, Shaw explores the options Britain has where free trade deals are concerned
in recent memory as well as the impact that talk of the departure alone has had on a handful of UKbased companies. It’s not all bad though. Some countries still treasure goods from the nation – if not its politicians – with the power of Brand Britain palpable. Whether it’s furniture, food, booze or hats, there’s an overseas customer base for manufacturers that wave the Union Jack with pride. India is one such market that values UK goods. It’s also a country
that houses one of the world’s rising startup hubs to keep your eye on – Bangalore. The city is so desirable that some have even shifted from Mumbai, a wealthier and larger location, to the developing destination. And in terms of looking to new territories, SharkNinja, the US home appliances firm, is thoroughly committed to the UK. With a £150m investment to spend, the American company has big plans for Britain regardless of it entering the home of Dyson, as detailed by Matt Broadway, SharkNinja’s European president. Zen Terrelonge - Editor zen.terrelonge@cemedia.co.uk
ELITE GLOBAL TEAM EDITORIAL Zen Terrelonge – Editor Eric Johansson - Acting Web Editor Varsha Saraogi - Feature Writer Angus Shaw – Acting Commerical Writer Louisa Cook – Editorial Intern editorial@cemedia.co.uk
DESIGN/PRODUCTION Darren Marriott - Head Designer Vrinda Sejpal – Designer Lizzie Thurgood - Designer production@cemedia.co.uk Dan Lecount – Web Development Manager dan@cemedia.co.uk
SALES/MARKETING Stuart Hardy – Sales Account Manager stuart.hardy@cemedia.co.uk Zane Zvirbule- Marketing Administrator zane@cemedia.co.uk Ellie Savva - Marketing Assistant ellie.savva@cemedia.co.uk
ACCOUNTS Sally Stoker – Finance Manager sally.stoker@cemedia.co.uk
DIRECTOR Scott English – Managing Director scott.english@cemedia.co.uk
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Chelmsford, CM1 1NZ Copyright 2019. All rights reserved No part of Elite Global may be reproduced, stored in a retrieval system or transmitted in any form or by any means, without the prior written consent of the editor. Elite Global magazine will make every effort to return picture material, but this is at the owner’s risk. Due to the nature of the printing process, images can be subject to a variation of up to 15%, therefore Channel Edge Media, cannot be held responsible for such variation.
UK £18, Europe £38, Rest of World £60 Elite Global Magazine is published four times a year by Channel Edge Media, 1st Floor, Regency House, 16 Victoria Road,
APRIL 2019 ELITEGLOBAL
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World tour BY ERIC JOHANSSON
Pret A Manger owners donate €10m after discovering Nazi past Reimann family appalled after discovering ancestor was an early supporter of Adolf Hitler The Reimanns are one of Germany’s richest families and own brands like Krispy Kreme Doughnuts and Pret a Manger among others. However, it was revealed in late March that the family’s fortunes were built on the shoulders of the Russian civilians and French POWs that ancestors used as forced labourers during World War Two. Moreover, Albert Reimann Sr and Albert Reimann Jr were early supporters of the Nazi party, Associated Press reported. These facts were unearthed after the family commissioned a historian at University of Munich to find out more about their past. The preliminary findings shocked them. The Reimanns will now donate €10m to an unnamed charity as a gesture and will release the historian’s report in full to the public once it’s finished.
the big McDonald’s data deal The fast food franchise just super-sized its technology investments by buying the big data business, Dynamic Yield for a reported $300m From teaming up with UberEats to introducing an app, McDonald’s has actively been adopting new technology to modernise its restaurants and services. But the latest push may be the biggest one yet. The fast food franchise has bought Dynamic Yield, the big data startup. While McDonald’s has kept the details about the deal under wraps, TechCrunch has reportedly spoken with sources familiar with the acquisition who put the price tag at over $300m, making it the franchise’s most expensive business purchase in the last 20 years. The technology will initially be used to create a better drive-thru experience. Essentially, Dynamic Yield’s AI will plough through slews of data – including things like time of day, weather, current restaurant traffic and trending menu items – and suggest additional products that the customer is likely to add to their basket. Big Macs combined with big data certainly means big business. 8
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Down the hatch Food and drinks exports from the UK slowed down in 2018 People love pairing meals with beverages. However, the UK seems to be having some problem sharing its nibbles and shots with the rest of the world. The Food and Drink Federation recently noted that food and drink exports increased by 2.5% to £22.6bn in 2018 compared to 2017. This may’ve been cause for exuberant celebrations if it wasn’t for the fact this meant growth had stalled from 9.7% when comparing exports over 2017 to 2016. This phenomena was seen in both exports to EU markets, which increased by 4.3% in 2018 compared to up 10.3% in 2017, and non-EU markets, which actually saw a decrease by 0.3% in 2018 compared to 2017. While it’s worrying that the growth has slowed, at least it did grow despite the market uncertainties. It may not be much but it’s something.
UK signs trade agreement with Caribbean countries Whenever Brexit happens, Britain’s trade with the Caribbean will remain roughly undiminished Everybody worries about what leaving the EU will mean for British trade. But now, at least you can seek some comfort in the knowledge that the trade with Caribbean countries has been secured. In late March, trade policy minister George Hollingbery signed a continuity agreement with ministers and representatives from Barbados, Belize, The Commonwealth of Dominica, Grenada, The Republic of Guyana, Jamaica, Saint Christopher and Nevis, Saint Lucia, Saint Vincent and the Grenadines.The agreement will ensure British businesses and Caribbean ones can continue to trade like they do now. It’s hardly surprising these nations were eager to sign the treaty as Britain bought 100% of Saint Lucia’s and 69% of Belize’s banana exports in 2017. In addition, 81% of Guyanan and 64% of Jamaican sugarcane exports went to the UK. In 2017, trade between the UK and the Caribbean was worth £2.5bn. Let’s hope that means every little thing is gonna be alright. APRIL 2019 ELITEGLOBAL
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the LOWDOWN The stats that matter to the UK’s global businesses and some that don’t
2.2 million UK employees haven’t been paid in time because of their employer’s cashflow problems
$2.7bn worth of wood was exported by Latvia in 2018, making it the country’s biggest export
$72.5bn
of machinery, including computers, was exported from Britain in 2018, making it the country’s biggest export
110,800
$484bn
UK businesses exported abroad in March 2019
worth of goods was how much the UK shipped around the globe in 2018
74%
£12m
was the price of a New York penthouse the government bought for a British civil servant to use for post-Brexit trade deals
2
of high-growth companies in Britain already are or plan to start operating overseas
glasses of wine per day was how much French health officials encouraged its countrymen to cut down to. The French could hardly believe it
$64m
is the worth of a French businessman’s château. He’s now forced to demolish it because he didn’t have permission to build it in the first place 10
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Sources: Business Insider, gov.uk, The Guardian, QuickBooks, Santander Corporate & Commercial, World’s Top Exports
28/03/2019 22:04
Greg Sutch CEO, INTRALINK
Glitz, glam and Japan With a modern business mindset, Japan is quickly becoming the new superstar of Asia after its bigger neighbour China hogged the limelight for a decade
H
as anyone else noticed Japan seems to be featuring everywhere these days – in newspapers, magazines countless TV programmes? Even TV presenter Monty Don did a trip to report on Japanese gardens. But it’s only recently come into prominence. For the past decade or more, the island nation has been overshadowed by what’s been going on with its neighbour across the East China Sea. China’s rapid growth has been the focus of every western boardroom, not to mention government. In fact, the last time the Land of the Rising Sun was really the in-place, so to speak, was in the days of iconic Japanese products like the Sony Walkman – back in 1979. Japan’s renaissance is down to a combination of factors. Part of it is the country’s both ancient and modern culture, which the Japanese meld almost seamlessly. Think of a shiny new bullet train whizzing past a pagoda with Mount Fuji in the background or kimono-clad geisha girls playing games on the latest Nintendo. Such imagery has caught the imagination of many in the west who are now visiting Japan in their
droves – not to mention millions of Chinese, Taiwanese and other Asian tourists flocking there to shop. In fact, foreign visitors have risen from six million a decade ago to well over 30 million last year. That’s staggering tourism growth by any country’s standards. But it’s not just about travel, culture and the consumer: Japanese business has been getting in on the revival with a new spirit of openness to foreign influence. They even have a phrase for it – “open innovation.” While not originally a Japanese expression, the nation’s laid claim to it by wholeheartedly embracing the concept. Open innovation has been borne out of a need for Japanese corporates to accelerate the process of invention by collaborating with external pioneers – tech startups mostly. In part, it’s a response to rising competition from China and beyond and has required significant change in the Japanese corporate mindset – from thinking everything must be invented internally and seeing startups as unwelcome disruptors to instead regarding collaboration as a great thing and the startup as a complementary enabler. Japan is no longer just looking locally and now sees the UK, along with other parts of Europe and the US, as the most fertile places to find cutting-edge new partners. No wonder more British companies are looking hard at Japan and seeing new and exciting business opportunities.
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How can you achieve export success? The bigger the market the more you can sell. That’s the simple logic underlying a desire to export, and the evidence is that companies are keener than ever to do so. But how do you go about taking your business in an exciting and lucrative direction, without putting your livelihood at risk?
E
ven at a time of economic uncertainty, companies remain keen to explore the oportunities provided by export markets. But of course with every reward there is a potential risk, so while exporting is a proven way to grow, many companies are understandably wary. Trading across oceans need not be unduly risky, credit insurance is a way to make exporting less risky and more profitable. So how can credit insurance support your business? The key to successful exporting is accurate and up to date information about firms, countries and sectors around the world. The single most reliable source of such information is a globally successful credit insurace provider, such as Coface. Our customers have immediate access to unrivalled market intelligence resources, including credit reports on 80 million companies worldwide - plus sector or country reports, political risk assessments and economic evaluations. Credit insurance also opens the possibility of negotiating more favourable terms with suppliers and customers, as an insurer will regularly evaluate
each of your customers to make sure you are trading at the right credit levels. This not only protects you from trading on risky terms but enables you to concentrate sales efforts on more financially robust customers. Credit insurance is the simplest, most reliable and cost-effective way to replace cashflow lost through customer insolvency or non-payment. Some exporters rely on letters of credit but these can be costly and cumbersome to administer. They are also limited in scope as a separate letter is required per customer. As with most aspects of business, preparation and intelligence are the keys to success, and if a company takes the right advice, runs the right checks and takes the necessary precautions, the export journey can be a profitable and enjoyable one.
To find out how Coface can support your business call 0800 085 6848 or visit cofaceitfirst.com
Coface is authorised in France by the Autorité de Contrôle Prudentiel et de Résolution. In the UK Coface is subject to limited regulation by the Financial Conduct Authority and in Ireland Coface is regulated by the Central Bank of Ireland.
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JEREMY THOMSON-COOK CHIEF ECONOMIST, WORLDFIRST
TOUGH TIMES FOR INTERNATIONAL BUSINESSES The world is seldom an easy place for an international business at the best of times and, needless to say, these aren’t the best of times
M
ost companies that source goods from abroad have foreign offices or are part of interconnected supply chains that span multiple countries. And they’ll never have seen anything like this market in which we find ourselves presently. The rising tide of comment and policy that directly targets these businesses is an alarming bi-product of the current political climate. Brexit has become as much a political battle as a fight over trading regulations, red tape and competitiveness. At the same time, the defining characteristic of the Trump administration’s foreign policy – and to an extent politics – has been through the lens of trade and the USChina relationship. Unfortunately, it’s the average SME that gets caught in the middle when politicians trade barbs and raise tariffs. Both tariffs and non-tariff barriers involve heightened costs for international businesses and it therefore stands that it’s never been more important for SMEs to know just how secure their margins are. International businesses of every size and age will have some form of currency risk to manage and, while there are more volatile currencies
out there, the relationship between the pound, the dollar and the euro will remain the most important ones for businesses on this side of the world. And, regardless of the back and forth politically, any gains made as a result of volatility in the pound aren’t yours until you’ve hedged yourself.
SMEs: Take your own advice
With the last days of Brexit, Worldfirst’s most recent global trade barometer highlighted one of the stranger juxtapositions in the operations of UK SMEs ahead of the end of the Article 50 period. 48% of UK SMEs – that’s around 2.7 million businesses – believed the
value of sterling will decrease, with a third predicting a fall of over 10%, after the UK leaves the EU and yet nearly two-thirds are doing nothing to protect themselves against that risk. It’s almost like the majority of British SMEs have heard the storm warnings and seen the dark clouds gathering but still need to see the first drops of rain to believe it’s coming their way. What Westminster, Brussels, Beijing or Washington DC will end up deciding upon in the coming few months is uncertain but we do know that international businesses that don’t have a firm grip of their currency costs are more at risk than those which do.
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Maternity leave
Post-pregnancy
pressure
BY VARSHA SARAOGI
Discrimination continues to hinder the careers of expectant and new mothers in businesses. Fortunately, the UK is progressing as it’s fourth on the global list of countries providing maximum maternity leave omen facing discrimination in the workplace is an epidemic that’s plagued businesses for decades. While female employees continue to fight for equal pay and against sexism, their battle doesn’t end there – in fact, it escalates once they have children. Given post-pregnancy is a time when women gain more responsibility at home, business bosses must ensure they’re given enough leave or run the risk of losing talent to employers that will support their needs. Indeed, getting back to work for new mums can be daunting. While some countries are realising the importance of giving sufficient maternity leave, the amount women are entitled to varies significantly around the world. A report by Instant Offices, the office space finder, revealed the global ranking of countries which provide the most maternity leave. The UK was the fourth on the list and Sweden rocketed to the top of the chart. Fittingly so, as women in Sweden receive 480 days of maternity leave and get 80% of the pay for 390 days. Elsewhere, Norway has regulations to ensure both parents get a work-life balance after they have a child. They’re
W
14
entitled to either a fully paid 46 weeks leave or 59 weeks with 80% of their salary paid. In terms of perks in other countries, Croatia not only provides new mothers with a year of paid maternity leave but also free pre and post-natal medical care. To add on, employees can’t be dismissed during pregnancy and maternity leave. In Britain, female employees receive up to 52 weeks of maternity leave but only with 90% of their original pay for the first six weeks. Although there are countries making an extra effort to ease the lives of new mothers, other markets could do with revising their strategy, according to UN data. Indeed, the United Arab Emirates was highlighted as the guiltiest culprit, providing an astonishing six weeks of maternity leave. Having to balance caregiving and a career is like an upward mountain trek. This is why it’s essential companies support pregnant women by having policies conducive to their physical and mental health after they give birth. Most would agree discriminatory practices like low maternity leave for new mothers is unfair and, by encouraging a better work-life balance like flexible working and remote working options, more countries and businesses can only stand to please their staff.
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Maternity leave
The top five countries with the most maternity leave 480 days
SWEDEN
400 days 365 days
NORWAY CROATIA
365 days
UK
365 days
SERBIA
The top five countries with the LEAST maternity leave
UNITED ARAB EMIRATES UNITED STATES SWITZERLAND GERMANY BELGIUM
6 WEEKS 12 WEEKS 12 WEEKS 14 WEEKS 15 WEEKS
*Sources from Instant Offices and UN data APRIL 2019 ELITEGLOBAL
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Brexit effects
The good and
the bad BY ERIC JOHANSSON
From fears of being unable to recruit EU nationals to a boom in sex party attendees, we evaluated the way Brexit impacted UK SMEs before the official departure
Technically speaking
Kasia Borowska, managing director and co-founder of London-based tech startup Brainpool.ai, is feeling the pressure from Brexit The UK has a strong record in AI. It’s widely recognised as the European hub for AI excellence and third in the world behind the US and China. However, neverending uncertainty from Brexit is making it significantly harder for UK-based AI startups to get VC funding and attracting or retaining overseas talent in the UK is much more difficult. UK tech startups – especially in AI – are typically attractive investments for VCs globally because of the depth of skills and breadth of talent in this market. Since June 2016, UK tech companies have received more than £5bn in VC funding, more than France, Germany and Sweden combined, according to research from London & Partners. The UK dominates the European investment charts for funding into the hottest sectors of AI, cybersecurity and fintech. However, VC funding in startups is down because of Brexit. In a survey of overseas tech leaders by industry group Global Tech Advocates, 68% of respondents cited Brexit as the number one obstacle for UK tech companies. A quarter wouldn’t currently invest in a British tech company because of Brexit, while 55% wouldn’t expand their business into the UK. Brainpool.ai’s experience backs this up. We’re seeing VCs delay funding decisions or demand that startups have offices in Europe. We, like others, are contemplating having to move to Amsterdam to become a safer bet for VC funding and to recruit global talent. A significant percentage of London’s tech workforce originates from outside the UK, with around one in five coming from the European Union. Brexit impacts not just investment but the entire tech talent pool in the country, so much so that the UK could potentially lose its position as a world leader in AI. The clock is very firmly set to countdown but we’re still no nearer to getting the clarity we need. 16
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Brexit effects
Sexit Brexit
Emma Sayle, founder and CEO of Killing Kittens, the female-centric sex party company, has seen a rise in attendance of the escapist events her scaleup organises Let’s talk about Sexit Brexit or why we believe we see a rise in attendees at our events during political unease. The world stopped for a moment in 2016 when it was announced we’re headed into a divorce with the European Union. Brexit was born and it hasn’t stopped crying since. However, amongst the current unease for business across the UK, we aren’t feeling nervous. A business like ours, one that offers escapism from the realities of the everyday norm, thrives when there is political unrest. We launched our business 14 years ago, ahead of the financial crash of 2008, so we have experience riding the negative wave. It’s a proven fact that human beings, if dwelling on troubling things happening in the world that are beyond their control, will experience a decline in mood and an overwhelming feeling of misery. Killing Kittens offers an events haven, a place to escape, unwind and be free from the turmoil we’re feeling as a nation divided. In the last six months Killing Kittens has seen a 13% increase month-on-month compared to its usual 6% rise in memberships as per previous years. The packed schedule of events is selling out weeks in advance and the waiting list is double what it was a year ago. We have the insight as a business to be able to compare this to October 2008 – numbers attending Killing Kittens events doubled in a month then and what we’re experiencing now mirrors exactly that. We work regularly with behavioural psychologists and they tell us that it’s standard human nature to, during uncertain times, seek out opportunity to escape and be hedonistic, to unwind and seek out ways to lower stress levels. We offer the outlet for just this. As the stress decreases the sex increases and the Kittens thrive. For us it’s a Sexit Brexit.
Where are all the people at?
Ricky Thomas, founder and CEO of AVORA, the business analytics startup, believes Brexit is making it difficult to source talent Brexit will impact UK SMEs in many ways but the biggest worry I have at the moment is about recruiting talented staff once we’ve left the EU. Our company is made up of more than 15 nationalities and we always strive to recruit the best people wherever they’re based. Being able to tap into both the UK and European Union talent pools is absolutely crucial. Now there’s a lot of uncertainty as to how we’ll continue to attract the best talent as AVORA grows. But we’re taking steps to prepare. In February we registered the ability to sponsor international hires for visas but we have received little to no guidance from the government as to how this is actually going to work. The government must do more to support and guide small businesses on how we should prepare and manage every Brexit eventuality. There needs to be greater certainty as to what is actually going to happen so we can best prepare for it.
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Brexit effects
The fear of rising costs
William Bown, managing director of SuperFOIL Insulation, the insulation trader, fears Brexit will damage his company As the managing director of a family-owned company that manufactures high-performance insulation, employs 19 people and imports materials and exports goods, I’m really worried that a no-deal Brexit will be very bad for us and for the wider construction supplier industry. Our European exports amount to 20% of our overall sales each year and it’s a growing market with rising demand for our products driven by increased housebuilding and the rise of modular builds. This has meant that, despite the looming threat of Brexit, we’ve just enjoyed a record year and I’ve been able to build on this success with investments in new people and a new premises but I’m worried that things will be much, much harder for us after Brexit. Recently, the Treasury looked at the most likely outcomes of the different types of Brexit and concluded that a no-deal situation would cut Britain’s GDP between 7.7% and 9.3% over 15 years. This was backed up by a report from the Bank of England which said that in the worst case scenario, a no-deal could cut our GDP by 8% next year and sink us into an even worse recession than the one following the 2008 financial crash. While these were the figures that made the newspaper front pages, the Treasury report also provided calculations for the likely costs for manufacturers from anticipated tariffs, trade costs and other fees arising from customs procedures. For us, this would amount to between £45,000 and £85,000 or more each year or up to £1.3m over 15 years. This is an eye-watering sum but I’m worried that the costs will be even greater because the calculations don’t take the devaluation of the pound into account. Immediately after the referendum, the value of the pound dropped 10% and this meant we lost purchasing power overseas, making our imported materials 10% more expensive. If we’re to suffer another recession as a result of Brexit, this cost could be extremely punishing for us. Yes, if we struck free trade deals then reduced tariffs would reduce the cost of goods but this wouldn’t be enough to overcome the increased costs of exporting to Europe. I’m lucky in that Brexit hasn’t significantly held us back so far but if we are to endure a no-deal, we will be much worse off and it would inevitably impact our prices and our ability to create jobs in future.
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Brexit effects
Brexit hits the development finance market Holly Andrews, CEO of KIS Finance, the brokerage firm, claims the waves of Brexit has washed over the financial industry As an independent brokerage, we’ve seen first-hand how the long running uncertainty of Brexit has impacted confidence in the finance sector. Prior to the referendum we saw steady growth, particularly in the development market, with good levels of new investment. However, there’s now a steady reduction in those looking to invest in new projects. An increasing percentage of our business is now focused on emergency refinancing as people are affected by tightening markets. Rather than helping them grow we’re supporting clients to weather the current storm. Those who already have bridging finance may find they need to re-bridge as they’ve been unable to sell a property that they were relying on as their exit strategy. This is particularly the case with higher value properties, especially in London, where the market has slowed alongside the current uncertainty. People are weary of committing themselves to long-term investment when so much is up in the air. Similarly, people’s appetites to invest in large projects has slowed. We’re frequently helping customers to raise finance against property assets to support their business and help them keep going until the economy settles. Lenders are responding by reducing the loan to value that they will lend on, further depressing the market. This tightening of the market is worryingly very reminiscent of the last credit crunch. Some funding lines have also been adversely affected, especially those from the US, who see Europe as a safer option than the UK at present. However, we’ve also seen some take advantage of the current climate as entrepreneurs often thrive in times of market uncertainty. They can adapt more quickly to changes in conditions and are on the lookout for new opportunities.
A job-hunter’s paradise
Lee Biggins, CEO and founder of the recruitment platforms Resume Library and CV-Library, has noticed directly how the labour market is changing With so much uncertainty surrounding Brexit, we’re seeing a mixed reaction across the UK job market. In fact, our data tells us that employers are remaining resilient and are continuing to advertise their vacancies, with the amount of jobs on offer increasing by 4% in February 2019. In turn, this has a positive impact on our business, as employers are still putting financial investment into their hiring efforts. While this increase is great for job-hunters, we know many candidates are being careful about moving jobs in the current climate. This is clear from the 3.4% decline in candidate applications that we saw in February, which almost equally matches the rise in new job vacancies. Obviously, Brits want to stay safe in the knowledge that their employer will protect them, no matter the result of the Brexit deal. In terms of what this means for our business, we’re having to be careful that our customers are still getting the vital applications they need to fill their jobs. Despite this, candidate registrations are on the rise, increasing by 5.6% yearon-year, which is extremely positive. This suggests that while candidates are cautious about making their next career move, they’re certainly considering their options, which is helping to grow our CV database – one of our key selling points to customers. The increase in registrations could also be related to the incredible hike in average salaries across the UK, which rose by 30.2% on average. Employers have realised that to convince cautious candidates to apply for their roles, they’ll need to stand out – and the best way to do this is to offer a competitive salary. Indeed, higher salaries will ensure that employers not only attract candidates but retain them further down the line, thus preventing them from repeating the costly hiring process. While our data reveals a slightly mixed bag, it seems that business is continuing as usual for now.
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Brexit effects
Brexit by the numbers
£100bn per year is how much Brexit will cost the UK economy until 2030
2.27 million
EU nationals worked in the UK in the last quarter of 2018, 61,000 fewer than the same period in 2017
€1.303
was how much £1 corresponded to on June 23 2016
€1.172
was how much £1 corresponded to on March 27 2019
Sources: The National Institute of Economic and Social Research, Office for National Statistics and Poundsterlinglive.com.
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EU-CONNECT has the necessary networks and know-how to set up distribution of foreign products and activities in the Western European Market. EU-CONNECT works for different companies in the private sector to introduce them on the market and/or expand their market activities, without having an office based in those countries. Your can run your business as usual after BREXIT! Your company will be visible in Europe. No travel expenses or expensive foreign executive managers.
Direct contact, fast results. We can respond and be with your customer within 8-12 hours anywhere. Your professional management team with an European way of doing business.
You run your business as usual from the UK!
CONTACT US
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+32 498 125 049 info@eu-connect.co.uk www.eu-connect.co.uk
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SHARKNINJA
SHARK ATTACK BY ZEN TERRELONGE
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SHARKNINJA
The UK has been on shaky ground since the vote to leave the EU. But US household appliances giant SharkNinja hasn’t let that stop it from swimming across the pond hen you think of vacuums in the UK, the likelihood is that Dyson will spring to mind – even if you don’t own one. After all, it’s a British brand and founder James Dyson is rather vocal on matters of UK plc. So vocal, in fact, he was keen to champion Brexit ahead of the vote on June 23 2016 and ever since. Three months after the decision to leave was announced, The Guardian reported the billionaire tech entrepreneur wasn’t phased. “I don’t want to be arrogant about this, but I don’t understand why people are uncertain,” he said. Fastforward to January 2019 though and it was revealed the Dyson headquarters was being relocated from its UK hub in Wiltshire to Singapore. Chief executive Jim Rowan claimed: “It’s to make us future-proof for where we see the biggest opportunities.” Of course, this did little to convince spectators Brexit wasn’t the real trigger. But when it comes to the biggest opportunities in the eyes of Dyson rival SharkNinja, the American manufacturer of Shark vacuums and Ninja kitchen electronics, it’s sunk its teeth firmly into the UK. This much was demonstrated last year with a £150m investment promised over three years to grow the London R&D base in Victoria, where a new floor was opened in November 2018. “This growth will contribute to our unique 24-hour engineering cycle whereby engineers in the company’s three international hubs in London, Boston and Suzhou work collaboratively and continuously around the clock in different time zones to allow new products to be developed from concept to completion within weeks,” says Matt Broadway, SharkNinja’s European president.
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The expansion showcases that innovation doesn’t just come out of the mighty US and China but the UK too. Broadway reasons that, in terms of product development, British engineers are on the ground and know what Brits want as a result. But the £150m pot will go beyond innovation to help support overall UK growth too, with TV advertisements and social media strategies among the plans to spread the word of SharkNinja. “We’re continuing to invest in marketing in the UK and our field-based team,” Broadway details. “In 2019, our brand ambassador programme of in-store product demonstrators will grow from 80 to 150 in stores across the country.” But just why exactly is the UK so appealing to SharkNinja? Well, the numbers speak for themselves. “In 2018, 50% of SharkNinja’s global growth was provided by the UK subsidiary,” reveals Broadway. The North American omnipotence of the business means its existing scale can only come from new verticals like heated cooking, which Ninja has entered with its Foodi line, and new markets. “The UK is very well placed to act as a foothold for wider expansion into Europe in the future,” he adds. With 1,200 staff globally across ten offices in eight countries, the UK is currently home to 200 staff, with a 50/50 split between sales and marketing workers in Wakefield and engineers in London. Broadway notes that the vision was “to make better products for our customers” when SharkNinja launched in the US in 2003. And that objective was similar when setting its sights on Britain. “The main vision for setting up the business in the UK was to have a permanent base here so we could build a significant sustainable share of both the floorcare and the small kitchen appliance markets,” Broadway details. A thirdparty distributor relationship was previously in place but the
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business realised the chance to do well with both Shark and Ninja brands was in its reach with its own dedicated UK premises. “Looking back, setting up was undoubtedly the correct decision, given the brand awareness, loyal following and market share we have grown since establishing ourselves,” Broadway says. As the nature of the business is so laser-focused on the end user, consumer research is essential for insights and Broadway defines this as “the heartbeat of our business,” which means finding out their pain points and collaborating closely with the consumers themselves. “All our products are put in front of real people in real homes so they can be tested and reviewed in real life environments,” he explains. “This allows us to understand the needs of the customer at every user interaction point, which includes every button, knob and screen.” This approach, of course, suddenly makes it much clearer why the R&D investment is such a key part of the business plan. “We design products we know are going to be well received by the end consumer,” states Broadway, adding that products are tested at each step of production for the best possible 26
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In 2018, 50% of SharkNinja’s global growth was provided by the UK subsidiary outcomes. “This allows us to predict incredibly accurately how competitive our products will be and only launch products we know will be given five-star user reviews,” he says. To that end, there’s a clear-cut goal in place to make the UK and European division of SharkNinja thrive. “For every year over the next three years we aim to have 25% of our revenue come from products which we’ve launched within that calendar year,” says Broadway. In other words, the company has no intention of standing still and resting on its laurels with goods of the past. “This means that we’re not relying on legacy products but fostering an environment which encourages innovative thinking and builds innovation as an important aspect of our brand DNA,” he continues.
“You might expect that in consumer electronics but not in household appliances. That tells you how we operate and think.” And when it comes to sharing its thoughts, SharkNinja doesn’t try to sweep the fact Dyson is a Shark rival under the carpet. Quite the opposite actually. And having already diluted the British brand’s presence in America, the goal is to do the same here. “Dyson had been equally strong in the US and Shark had been able to successfully compete with Dyson there,” says Broadway. And it was that previous battle that paved for way for a UK invasion. “This previous experience gave us the confidence to go head-to-head with Dyson in the UK market as well.” Aided by the commitment to engineer
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new products and obtain consumer insights, the business believed it “would be loved by British consumers.” “Since entering the UK, SharkNinja has grown market share and become the number one brand in corded uprights – a £250m market in the UK,” claims Broadway. “We also continue to be the clear challenger brand for cordless stick products with a 25% market share achieved over the last year.” But with SharkNinja eager to drop anchor in the UK and Dyson looking to Singapore, will that make things easier for the former? Broadway is seemingly indifferent to the shift. “We’ve successfully competed with Dyson all over the world and, wherever they are based, we’re confident of achieving commercial success in every market so it doesn’t make a huge difference to us,” he declares. Diving deeper into his assessment of the move, Broadway noted Dyson’s eyes have traditionally been fixed on North America and Europe but looking to the east makes Singapore a logical step. His second point had a bit more fire behind it. “Dyson used to focus on floorcare as their primary product
category but we’ve outperformed and outsold them in many areas and they have since expanded into other areas of innovation where they have product superiority, such as electric vehicles,” says Broadway. “For Shark, this means that we can continue to lead in the markets Dyson is leaving, and the product categories in which they’re not innovating.” Although Dyson claims not to be worried about Brexit, the Singapore shift has raised eyebrows and question marks. Broadway says SharkNinja has taken the required steps to ensure it continues to navigate the treacherous waters of Brexit as smoothly as possible no matter what waves the UK exodus make. “We’re working with our retailers, logistics providers and supply chain, taking the necessary precautions to ensure we can keep providing our technology and innovations to customers in the event of a hard or soft Brexit,” he says. “We’re fully prepared for any difficulty the anticipated political changes may impose.” Looking ahead, SharkNinja has a three-year plan in place. But where exactly will that lead it over the course of the period? “Over the next three years, we expect to become the dominant player in the UK floorcare market and to have grown in new areas of technology by creating new markets in kitchen appliances which currently don’t exist,” concludes Broadway. “We’ll grow not just as a key subsidiary of SharkNinja growing sales in the UK but because we will be the head office for Europe.”
Dyson had been equally strong in the US and Shark had been able to successfully compete with Dyson there
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Mark Price, founder of Engaging Works and former minister for Trade and Investment
INCREASING THE UK’S
HAPPINESS
Happiness and productivity are directly proportional to each other. So how can we escalate the UK’s global ranking?
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appiness and wellbeing at work have recently become central to many businesses in the UK. With an increase in chief happiness officers, businesses seem to be waking up to having a duty to care for employees’ physical and mental wellbeing. This is of course a huge step forward in employee rights but we must also view this as a huge advancement for the country’s productivity. There is an unequivocal link between happiness at work and increased productivity. Modern academic research shows that sales, profits and dividends are higher in companies with the most engaged workforces and engaged workforces tend to be happier. Indeed, during my time in the John Lewis Partnership I saw how important an engaged and happy workforce is to the 28
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bottom line. I’ve recently created a digital platform designed to make people a little happier at work. Engaging Works is a place where people can assess their workplace happiness with a free survey and employees can survey their own workforce and have access to tools to get them more engaged, happier and hopefully more productive. The UK has had a prolonged productivity crisis. The nation is missing out on £130bn in output every year, which firms could unlock if they do more to address poor productivity. Indeed, UK worker productivity is falling and continues to lag behind rates achieved before the financial crisis in 2008. Charlie Bean, of the OBR, as well as the OECD think tank has suggested that the productivity crisis is a far greater problem than Brexit for the UK.
Mark Price
Arguably, looking at Brexit it’s even more necessary to put productivity at the focus of government. In a postBrexit free market, open trading world, improving our productivity through having a more engaged and happier workforce will become even more vital if we’re to become globally competitive. So who can the UK follow when it comes to happiness and productivity? Seeing as happiness and productivity are so inextricably linked we can analyse the Engaging Works’ Global Happiness Index for clues. Engaging Works has surveyed over 10,000 employees globally with the workplace happiness survey and here we can see the UK’s workplace happiness rating comes in tenth. Austria, The Netherlands, United States and
Germany are all above the UK in rating workplace happiness. The UK’s average happiness score of 6.43 lags behind Austria’s 7.67. What is perhaps most striking is that eight of the countries which sit ahead of the UK also sit above the UK for productivity. But what can UK businesses and entrepreneurs take away from these countries to improve employee productivity? Look at Germany which came fourth in the happiness survey. UK workers are 27% less productive than German counterparts. So what is making German workers happier and more productive? We must look at skills and how this impacts happiness and productivity. Education and training in Germany has an emphasis on vocational training
and a wide range of apprenticeships are available, particularly in the engineering sector. With such a focus on developing young people in the workplace this can only have a positive impact on their workplace happiness. German working hours are much shorter but also tremendously stricter. On average British workers work an extra 303 hours a year compared to workers in Germany. Based on an eight-hour working day, that’s around 38 days extra. The German government takes the importance of home life seriously and has considered banning bosses from contacting employees outside of working hours. Parental leave is also one of the most generous in the world. If we look to the Dutch they also have an interesting take on leave. They typically have ‘‘Vakantiegeld” or vacation money – a bonus delivered once a year in the summer, not in the winter when this is typically given over the festive period in the UK. Could this bonus ensure more workers take time away on holiday rather than spending their bonus on Christmas presents? The Dutch also typically have a four-day working week which undoubtedly boosts a worker’s happiness and productivity. Lastly we must look at how infrastructure affects happiness and productivity. Compared to other countries in Europe where productivity is generally higher, Britain’s underinvestment in transport infrastructure is painfully apparent. Employees will be happier if they have an easy commute and unfortunately it’s all too obvious how regularly infrastructure lets down the UK. So as the country maps out its life without the EU, chief happiness officers could look to Europe for some advice on how to make employees happier and more productive. And maybe the UK will finally start to address its productivity problems.
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The big
bangalore theory
BY VARSHA SARAOGI
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While the increasing number of unicorns are signalling that the Indian ecosystem is maturing, tech hub Bangalore still has quite a trek before it makes a name for itself as a global startup paradise hen you walk down the streets of the Koramangala neighbourhood in Bangalore, there are three things there’s an abundance of – bars, engineers and entrepreneurs. With a new startup mushrooming almost on a daily basis from hostel rooms and universities, Bangalore is proving to be one of Asia’s fastest growing startup ecosystems. In the last few years, Bangalore – or Bengaluru as it’s currently called after being translated to the native Kannada language – was among the top 14 leading global advanced manufacturing and robotics ecosystems, according to Startup Genome’s 2018 ranking, overtaking other metropolitan cities like Mumbai and New Delhi. “Bangalore as a place for entrepreneurs I think is really exciting and is getting more exciting,” says Ben Legg, managing director of Ola UK, the Bangalore-based ride-sharing platform. Legg speaks from experience as Ola, initially born out of Mumbai, shifted its headquarters to Bangalore after recognising the city’s benefits. “While Mumbai is a bigger and richer city, [the founders] needed a lot of engineers and there’s way more in Bangalore,” Legg declares. “And if you want to build an awesome product quickly, you need to be in a place where an engineering shortage isn’t going to hold you back.” After moving base to Bangalore, not only did Ola scale further and enter international markets including the UK and Australia but also received funding worth $3.8bn through 21 rounds from Indian and foreign investors. “Just like Google, Facebook or Apple’s head office remain where the action is – which is in America, Silicon Valley – I expect the same with Bangalore,” he opines. “With Ola [being in Bangalore], they’re in the heart of things. And that’s the right place to be.” While Bangalore is deemed the startup hub of India today, the city wasn’t initially seen as a fertile land for business. Being a former British colony, India was mainly an agricultural and manufacturing hub due to its cheap labour and low-cost land. And it was after the country attained independence in 1947 that Bangalore evolved into a hub for public sector industries – particularly in aerospace,
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telecommunications, heavy equipment, space and defence – and saw massive investments from the government. This caused manufacturing giants like The Hindustan Aeronautics, The National Aerospace Laboratories, Bharat Heavy Electronics, Indian Telephone Industries and Bharat Earth Movers to have headquarters based in the Karnataka capital. “Because of this concentration of technical and scientific manpower, Bangalore witnessed the IT revolution in the early 2000,” explains Abhishek Pasari, partner at AVP Industries, the fashion company. “And that caused more companies to come into Bangalore and venture into robotics, manufacturing marketplaces and tools for the manufacturing sector because they were being influenced by the ongoing ecosystem.” The benefits of Bangalore’s infrastructure and abundance of resources led many multinational corporations to follow suit and place their headquarters in the city. Apart from global titans like Amazon and Uber, the list includes infotech businesses like Cognizant, Texas Instruments, Wipro, Microsoft, SAP LABS, Accenture and Infosys. “[The] shift of Infosys’ headquarters from Pune to Bengaluru encouraged the setting up of more IT companies and created thousands of jobs,” Pasari says. Additionally, unicorns – namely Swiggy which raised $1.5bn over nine rounds and Flipkart which has $7.5bn funding in total – indicate how lucrative Bengaluru’s ecosystem is. “India’s startup landscape has become the epitome of innovation and Bangalore is one of the future faces of India,” he continues. Undoubtedly, entrepreneurs from across the Indian subcontinent are increasingly making Bangalore the go-to place for scaling up. From edtech to fintech, the Garden City is progressing at a quick pace. However, the transition from being a manufacturing base to a tech hub took considerable time and effort. “The regulations a decade ago used to be very strict but now we’re seeing a lot of government regulations around supporting startups,” says Esha Tiwary, general manager of Entrepreneur First, the global startup talent investor. APRIL 2019 ELITEGLOBAL
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Indeed, the entrepreneurial spirit is being bolstered by various government initiatives aimed at supporting the city’s startup scene. With the aim to escalate the number of new companies coupled with a commitment to foster entrepreneurship, the Indian government launched Startup India in 2016, a programme to aid startups in areas like branding, funding, intellectual property protection and talent attraction along with providing tax benefits. To date, this project has led to over 234,000 registrations of which 182 have received funding. Additionally, prime minister Narendra Modi launched the Make in India movement in 2014 to encourage businesses to be self-reliant and boost manufacturing in the country. “There’s an overall positive environment created by the government,” Tiwary adds. And where Bangalore is concerned, the state in which it sits is eager to help. The Karnataka government launched the Karnataka Startup Policy in 2015 with a vision to stimulate the growth of 20,000 tech startups by 2020 and included several funds that together have a corpus of $47.3m. Apart from offering support, the government realised the importance of eliminating illegal practices in businesses. And so in 2016 it demonetised all ₹500 and ₹1,000 banknotes and issued new ₹500 and ₹2,000 notes with the aim to curtail the shadow economy and reduce the use of illicit and counterfeit cash which was being used to fund unlawful activity and terrorism. This action sparked sudden growth in online payment portals and fintech companies. “Indians are really nimble and creative and whenever something like this happens, it becomes an opportunity more than a trek,” Tiwary declares. “So in the past few years we saw a whole train of different kinds of fintech startups trying to capitalise on the 32
India’s startup landscape has become the epitome of innovation and Bangalore is one of the future faces of India Abhishek Pasari, AVP Industries
online payment industry in different ways.” Indeed, companies like Paytm, MobiKwik, Lendingkart Technologies and Policybazaar started increasingly scaling in the Bangalore ecosystem. Consequently, VC investment in fintech startups soared. Just in 2018, fintech startups raised $2.34bn across 145 deals according to Indian startup resource Your Story. With 438 fintech startups in the city already, the number is only set to surge. “Bangalore is a melting pot for tech entrepreneurs and the rise in fintech will change the way people use money – more so in the next decade,” Pasari says. “The tech sector in general has a vibrant startup brigade that’s not afraid of taking risks and trying ideas that have a huge impact. This makes Bangalore the perfect hotbed for VCs.” Clearly VCs are getting increasingly attracted to inject money in Bangalore given the slew of unicorns already present. “Flipkart and Ola are phenomenal success stories not just for themselves but for the whole Bangalore ecosystem,” Legg says. He argues the success of these unicorns raises confidence and means the employment and training of thousands of people who often end up working at startups sooner or later. Along with providing mentorship, former workers or heads of bigger players pump their money into newer startups. “The
co-founder of Flipkart is now investing into more Indian companies,” Legg adds. “Obviously it’s better to have a former founder as an investor than someone who hasn’t run anything.” As a result, Bangalore also attracted foreign investors. For instance, Japanese multinational holding conglomerate SoftBank has already invested $8bn in the past three years and is ambitious to invest $100bn through its Vision Fund into Indian tech startups with a focus on Bangalore. Adding to that, Indian startups attracted more than $33.4bn of funding through foreign direct investment. Moreover, the city saw the most funding in the AI and machine learning sectors. Tech startups bagged an incredible funding worth $328m in 2018 compared to $26m in 2017. And, given that Bengaluru was named as one of the world’s best rising tech hubs for startups, according to SmallBusinessPrices, investors have every reason for doing so. And fittingly, Bangalore earned the sobriquet of being the Silicon Valley of India after a considerable number of startups in the tech sector were born there. “Bangalore is getting a bit like Silicon Valley in an Indian context which means there are more engineers, more talent, more startups and more investment coming in,” Legg says. One of the main reasons for the tech rise has been the digital transformation in the country. “Mobility is another big
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lever, India has completely leapfrogged from the stage of no phones to mobile phones with 4G and soon 5G so suddenly there’s a very robust infrastructure for a lot of data companies to flourish,” Tiwary says. “There’s so many such things happening across the tech ecosystem that we’re seeing a flurry of activity in e-commerce.” Along with technology, Bangalore has an abundance of ideas. A major advantage of being an entrepreneur in the Karnataka capital is that the ecosystem is still maturing. This means new ideas can be trialled and tested and there is plenty of room for innovation. “It has so many either unsolved problems or ways that things could be run better,” Legg says. And given India ranks 58th in the Global Competitiveness report – up five places from 2017 – it seems the country is set to move up in the coming years. The rankings were based on factors like human capital, agility, resilience, openness and innovation. “There are people who are trying to improve the way electricity is distributed, the way cooling happens, just all sorts of things that will help Indians with their daily lives because it has a lot of chaos,” Legg adds. “And because there’s a lot of people saying ‘I can solve that chaos,’ there are unique problem-solving ideas being born.” While the infrastructure is improving, it’s imperative to have the best employees when starting up. But despite more than eight million people living in the city and it being home to some of the most coveted universities in India, finding great engineers is challenging. “It’s a war for talent in Bangalore – it’s intense,” Legg argues. “You either work for a startup, which is great learning and very exciting – and yes, you don’t have as much money but either way you’ll have a fun ride – or people start their own companies because they’ve got a vision of something they want to build. And startups are where the coolest people work. So big companies are finding it much harder to attract talent.” In fact, even professionals who have a wealth of experience prefer to work with startups. “Most of my friends in India worked for companies like Coca-Cola or Google at some stage in the past and probably half of them now work in their own company or companies that are only five to ten years old,” Legg reveals. This explains how 94% of Bengaluru founders have a background in tech, which is the highest rate in the world, according to the Startup Genome 2018 report. While there is a dearth of good quality talent, staff aren’t heavy on the budget once recruited. Bengaluru’s annual salary for an engineer is about $8,600 a year, which is nearly 13 times lower than Silicon Valley’s average and one-eighth of the global average. This makes it easier for entrepreneurs when hiring employees in terms of capital. 34
If you’re a startup, the first place you think of is Bangalore and if you’re a VC you can’t survive if you don’t have an office in Bangalore Esha Tiwary, Entrepreneur First
“If the primary need is money and engineers, it seems to me as an outsider, Bangalore is the best place to do that,” Legg says. All these factors have made Bangalore the ideal place for every Indian mogul. “It’s a bit of a chicken and egg situation since a lot of startups are from here, all the talent moved here and then all of the talent is here so most startups come here – it’s the traditional way you form an ecosystem,” Tiwary explains. “It’s reached that velocity so if you’re a startup the first place you think of is Bangalore and if you’re a VC you can’t survive if you don’t have an office in Bangalore. So it’s really become your go-to place if you have anything to do with entrepreneurship.” Apart from ideas, talent, investments and emerging unicorns, Bangalore is rife with accelerators and incubators to aid entrepreneurs in their startup’s infancy stages. Initiatives like Microsoft Accelerator, 10,000 startups by Nasscomm, TLabs, Walmart Labs and partnerships with corporates like Yes Bank, Tata Group and Mahindra & Mahindra have ensured that Bengaluru’s ecosystem remains conducive to business development. Additionally,
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startups don’t have to worry about unnecessary costs due to a plethora of co-working spaces available. Along with global co-working space provider WeWork, the lanes of Bangalore are buzzing with spaces like BHIVE and Jaagarnaut to name a few. “There are more than five already under construction on just one street,” says Tiwary. However, Bangalore entrepreneurs face many challenges when going global despite this impressive startup ecosystem. “One big difference is the level of sophistication or consumer expectations in the market,” Legg says. For instance, while Ola had the winning recipe in India, it had to make many changes when entering the UK. One of these changes revolved around the wording used in its terms and conditions. “There was a phrase in it that said ‘If a woman is getting into a car she should use her prudence,’ which if you spent enough time in India, you’d know that’s not particularly upsetting to anyone,” Legg says. “But in the UK when that was discovered, it was like, ‘Whoa, that’s a bit sexist. Women should use their prudence in case they get raped? Why can’t men control themselves?’ So there’s lots of words and phrases that need to change otherwise you can come across as not fitting in or understanding the local culture.” While Bangalore and India have come a long way since the inception as an IT hub, the question is if the country will be able to become a startup paradise equal to Asian competitors like Singapore and China? “Not in the next five or ten years,” Legg opines, adding that while Singapore has all the advantages for a business to boom, its high costs are an obstacle. As for China, the excessive government control makes it harder for a global company to operate. “But India is much more trusted by the rest of the world,” he continues. “There is a massive home market, plus there’s a good English language standard which is an advantage over China.” The challenge is the scarcity of enough investors, engineers and unicorns which Legg thinks “is still tiny compared to places like Beijing or Singapore.” “But if Bangalore can have a great track record of more companies getting billion-dollar evaluations, investors and startup founders making money and reinvesting in other startups, if you have that for another five or ten years, it’s not impossible,” he says. However, even with its fair share of challenges, Bangalore is definitely starting to grab the attention of the rest of the world. “If you could get the infrastructure of Singapore with the talent of Beijing with a great track record of places like Silicon Valley in terms of churning out winners, that would be an awesome combination which could well make Bangalore the tech hub of Asia,” Legg concludes. APRIL 2019 ELITEGLOBAL
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The national business event that focuses on scaling up
23-24 OCTOBER 2019
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02 Industry view 03 Work up an app-etite 04 Remote control 07 Making the switch 10 Myth-busting the cloud
Evolution of communication In association with:
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Industry view A
s technology continues to evolve, we’ve entered an era where work is no longer confined to a specific desk, phone or computer screen. Driven by trends like digital transformation (DX), customer experience (CX) and the rise of remote working, communication has evolved. Today’s companies are interacting through a range of different platforms, using tools to measure performance and implementing strategies to keep the diverse global workforce connected. Thanks to the cloud and unified communications and collaboration (UC&C), businesses don’t have to worry about switching between different apps and tools to accomplish their goals and are able to empower their employees with simplicity, context and mobility. Communication and collaboration are natural partners in the digitally transforming and globally-distributed workforce. As work becomes less of a physical place and more of a collection of values and software solutions, collaboration has emerged as a critical factor for businesses and professionals worldwide. Now that half the UK workforce is set to work remotely by 2020, and many other countries are
following suit, companies are searching for ways to serve experts that refuse to be tethered by wires and physical locations. The result has been an influx of fantastic cloud communication tools, designed for almost every touchpoint in the business. More than ever, companies facing a changing business are beginning to understand how UC&C can help them better serve clients and employees alike. In fact, recent research indicates that the unified communications market will reach $62bn by 2020 – almost three times the size compared to five years before. Perhaps the biggest trend driving the adoption of UC&C is DX and the rise of the digital workforce. At its core, the digital workforce thrives on the idea that people should be able to access the tools they need to perform wherever they are and on whatever device they use. Combine that with the everemerging move to cloud communications and agile methodologies and you’ve got an environment primed for UC&C. As the workplace innovates faster, breaches global boundaries and discovers new opportunities, UC&C is the path to better connections and productivity. Sunny Dhami, director of product marketing EMEA, RingCentral
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Work up an app -etite Long gone are the days when staff must be glued to desktops to get things done. Instead, with app-based services at their fingertips, workers can be on the move and just as efficient. The result? Some seriously booming businesses, as we discovered with these first-hand accounts Colin Yates, chief support officer at WorkMobile, the data capture business Digital data capture solutions allow colleagues to work on documents at the same time, see each other’s updates and make amends in real-time – even if they’re on opposite sides of the world. Colleagues can even message each other to check in on how they’re doing, on both a personal and professional level. And, to reassure those at the top, managers have complete visibility of the status of all work in progress and can monitor for any changes or approaching deadlines. Applications such as these can also significantly benefit the field worker, who still has an office
element to their job. Simon Harrow, founder of Crabshell Inn, the quayside pub An easy-to-use app provides both my managers and shift workers with the assurance that nothing will slip through the cracks or be miscommunicated. By having everything in one place, employees at all levels and in different departments can communicate effectively to ensure we’re providing the best service. In turn, I can rest assured that as an employer I’m adopting the solutions that go the extra mile to improve my staff’s work-life balance. Waseem Haq, director of digital and innovation at Travel Counsellors, the travel company The use of app-based services has enabled our franchisees to get closer to their travelling customers, providing even more personalised experiences. [Our] myTC app supports the entire customer journey, from initial enquiry to landing back home and beyond. It provides leisure and corporate customers with instant access to travel information and alerts via push notifications, itineraries and documentation, as well as providing constant contact with the customer’s own Travel Counsellor at the tap of a button. Mike Teasdale, planning director and co-founder of Harvest Digital, the digital marketing agency As a digital agency, we’ve always been interested in – some would say obsessed with – deploying new apps and technology within the business. Of course, there were a few teething problems but it’s now working well and people are taking the new functionality very much for granted. I think there would be a lot of grumbles if we moved back to our old systems.
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Remote
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With half of Brits on course to work remotely next year, SME honchos can’t afford to fall behind the curve and miss out on the benefits of telecommuting. However, keeping up takes strategy
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ust as the computer replaced the typewriter, remote working is the workplace’s next evolutionary step. After all, with younger generations giving their stamp of approval, it’s clearly not just a phase. “Millennials started to overtake Baby Boomers as the dominant workforce generation in 2018 and Gen Z-ers aren’t far behind them,” explains Colin Yates, chief support officer at WorkMobile, the data capture solution. “These generations have certain expectations of what a working environment should look like and pretty soon it won’t be an office.” Indeed, according to job board Timewise, 92% of young employees work flexibly or wish to. And by next year, 50% of Britain’s workforce will arrive at their job remotely, according to the Office for National Statistics. It warrants something of a check-up for what going to work actually means and, more importantly, what employers should be offering. “No matter the industry, business leaders need to be equipping their workforces with the tools to work remotely now to avoid getting left behind in the very near future,” Yates advises. That goes twofold for SMEs. After all, due to current sky-high employment levels it takes an extra shove for job hunters to commit to small businesses, so luring wide pools of applicants is a must. And by embracing mobile employees working from devices of their own choice, top talent face few boundaries. “For smaller companies specifically, one of the greatest benefits of remote working is the ability of a tight-knit team to access the very best talent from trusted networks, not just from within a commutable distance,” says Brendon Craigie, co-founder and managing partner of Tyto PR, the public relations agency. Moreover, 87% of full-timers either already work flexibly or hope to, according to Timewise, meaning most job seekers far and wide won’t hesitate pinging over their CVs. “Adopting a location-agnostic staffing
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87% of full-timers either already work flexibly or hope to model means the ability to access that talent from across Europe and overseas to give a truly global perspective but using local expertise,” Craigie details. It certainly means only the best get hired, not the closest. Once your business is filled with fresh recruits, potentially from across the globe, the health benefits telecommuting brings will also keep them put. “In an era where an increasing amount of scrutiny is put on the way businesses deal with mental health and wellbeing issues, remote working provides employees more freedom, flexibility and transparency, consequently reducing their stress levels whilst increasing their work-life balance,” notes Christian Brøndum, CEO of Planday, the employee scheduling provider. As a case in point, an experiment by the University of Minnesota revealed staff at a Fortune 500 business enjoyed greater satisfaction and less stress after practising flexible working, which included clocking in from home, compared to those that didn’t. It goes without saying the chipper telecommuters also proved to be more productive. “As cloud technology becomes more sophisticated, businesses and employees alike are reaping the rewards, with increased productivity and communication at all levels,” Brøndum continues. From booming productivity to reduced absenteeism – like Jonathan Birch, creative director at Glass Digital, the marketing agency, witnessed in his company – the benefits of telecommuting seem endless and a no-brainer to adopt. However, getting it right requires care. “Established firms often dabble with remote working but they do it in a way that remote workers often feel like second-class citizens,” Craigie warns. There’s no hiding mobile working spells a dramatic departure from traditional office life, so copying and pasting the same standards, such as frequent face-to-face meetings, won’t do. Instead,
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picking up messaging platforms, for example, enables seamless collaboration for remote staff and makes in-person meetings no longer vital. “Smaller firms can ensure that when the whole team meets, it’s done with a specific purpose in mind.” Putting the unique needs of telecommuters under a magnifying glass is a simple yet effective consideration. “The important thing with a purely remote model is to not simply try and replicate office-based life,” Craigie adds. “Instead, ways of working need to be created that suit or are more advantageous to employees and clients.” And if your digital communications aren’t up to scratch for mobile workforces, such as with top-notch video conferencing, curb your enthusiasm. “The use of digital channels and internal communications to support a constantly connected community is also critical to ensuring that working flexibly and remotely enables a continuously engaged company population – whether working from home, an office or any other location across the globe,” explains Steve Byrne, CEO at Travel Counsellors, the travel franchise. Thanks to Byrne’s constantly connected global staff, the door’s open for customers whatever the hour, which he says develops a deep sense of trust from customers and franchisees. “It’s essential that state-of-the-art technology keeps our franchisees digitally connected to a global community of fellow travel experts – all whilst running their business around family or other commitments,” he summarises.
By next year, 50% of Britain’s workforce will arrive at their job remotely Whether you’re up for change or not, widespread telecommuting may become the gold standard for SMEs due to the sheer relief it brings workers in an increasingly digitised world. And considering companies benefit massively from the open-minded approach, remote working is nothing short of a win-win situation for everyone involved.
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08/04/2019 17:59
Making the switch With remote workers in America, JBH’s communications capability was pushed to the limit by relying on consumer-based solutions like WhatsApp
N
o other image encapsulates running a small business quite like plate-spinning. But to grow, that skill must eventually end and it all starts with communication. Having spread his business from Northampton to the US through remote working, no one knows that better than Andy Blason, director and co-founder of JBH, the content agency. “Before the move to RingCentral we used multiple vendors and applications, which ultimately provided a disjointed experience,” he says. At one point JBH even resorted to consumer-based services like WhatsApp to professionally contact clients, grinding progression down to a snail’s pace. “It was costly, a lot to manage and, looking back, made collaborating both internally on projects and externally with customers very difficult,” Blason continues. That was just the beginning. While Blason was thrilled to beef up JBH’s client book as time went on, the strain it put on comms made expansion bittersweet. “As JBH grew and acquired more
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clients we reached the point where our communication system was limiting us,” he recalls. Having introduced a second office in Manchester as well as stateside remote workers to meet demand, Blason needed to bring JBH’s telecoms into the 21st century and let the company breathe. “We needed a solution that allowed us to seamlessly communicate and
As JBH grew and acquired more clients we reached the point where our communication system was limiting us. collaborate with anyone in the business regardless of where they were located,” he summarises. Blason wanted to get far away from the inefficiency of multiple companies providing a
slice of digital communication each – especially now JBH started to operate from both sides of the Atlantic. And upon spotting RingCentral after a bit of window shopping, his prayers were answered. “Their product solved our problem of combining multiple disjointed tools into one cohesive [solution] that makes communicating with anyone, anywhere, on any device seamless,” Blason says. You’d think having access to just about every kind of modern digital communication would take some time to set up. However, for Blason it was as simple as screwing in a new lightbulb. “In addition, RingCentral made having multiple locations simple – we were able to add new users and get them up and running in no time,” he says. “The migration process was simple as we know RingCentral pride themselves on this.” Of course, just like how Victorian audiences are rumoured to have ran away during Arrival of a Train at La Ciotat, one of the first ever movies, from fear
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of being hit by the on-screen locomotive, steaming towards new technology will inevitably make some staff feel uncomfortable. “Any technology change is bound to cause friction, [as] people get attached to what they’re used to,” Blason admits. Fortunately, however, thanks to nifty filesharing and task management gizmos in RingCentral’s Glip app, JBH’s employees quickly rejoiced how easy it was to connect with colleagues from across the world. “In truth, after the team had received some training and discovered some of the hidden features – such as the GIFs in Glip – the concerns were gone,” Blason says. “With the added bonus of Glip app for mobile, it’s really efficient to be able to have a quick chat with a teammate – even during a meeting if required.” Since then, JBH’s all-in-one digital package has been the gift that keeps on giving, with seamless meetings available from anywhere on the planet. “For instance, the financial director loves the fact that it has reduced travel expenses to our clients as we’re able to have video meetings and present our work remotely,” Blason describes. And it’s not a feeling exclusive to execs – from the directors to the receptionists, every echelon of the business feels an impact. “The receptionist is just happy she has all our numbers in one system,” Blason says. “There’s no longer a need to phone work mobile, personal mobile, office one or office two – we take the number with us.” But Blason isn’t trying to convince you to dive into an upgrade head-first. Instead, measure up the opportunity against your own situation. “Consider how many applications it takes to run your
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There’s no longer a need to phone work mobile, personal mobile, office one or office two – we take the number with us. business, both internally and externally,” he advises. “Add up the costs but also think about the amount of time it takes to manage these tools.” Moreover, although getting with the times can transform the workplace for staff, never forget what those on the other side think. “Also consider what this all looks like to your customer: do you come across as a seamless, put-together business, or do you run into technology issues?” Blason adds. Having gauged its own circumstances, it’s needless to say JBH isn’t looking back – and that’s not just down to its provider costing less than alternatives. “But more importantly, [it] made
our internal work processes easier and made us look more professional to our clients, so for us it was a no-brainer,” Blason says. In fact, without cohesive digital lines the company might not have been able to facilitate expansion for long. “Personally I had concerns when we launched JBH North that the team was going to feel disconnected even though we’re only a few hours apart,” Blason concludes. “But Glip brings everyone together, [whether it’s] sharing stories, news, GIFs or just chatting shop – or pub time – everyone is involved and connected.” With such connectivity, now virtually any horizon is in reach for JBH to set its sights on.
JBH on the hunt for another Gold award
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92%
of workers aged 18 to 34 desire flexible working, with 88% between 35 and 54 and 72% above 55 expressing the same wish
91%
of women seek flexible working, followed closely by 84% of men
65%
90%
of financial services gigs are advertised as “agile”
78%
of bosses have taken on flexible workers
is the proportion of CEOs implementing flexible working to attract and keep talent
37%
of staff operating in office cubicles, 32% in open plan offices and 31% in private offices suffer workplace-related stress, compared to just 17% clocking in from home
77%
of employees offered flexible work said it boosted their productivity
39%
70.5%
of remote workers wouldn’t ditch their job for a better wage, in contrast to 62.5% of on-site employees
of mobile staff said it’s “very true” they work beyond their job’s normal hours, compared to 24% of on-site workers
83%
of businesses say flexible working improved their company
Sources: Canada Life Group, New Technology, PwC, Ten2Two, Timewise, University of Cardiff, Work and Employment
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Myth-busting the cloud Although it’s sometimes been misunderstood, cloud technology’s far from a poisoned chalice. In fact, it’s a game-changer for businesses like these that can separate fact from fiction
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t’s not exactly a new kid on the block anymore and, yet, cloud technology still has massive potential. Next year, cloud-based services will account for a sizeable 67% of enterprise infrastructure and software according to IDC, the market intelligence firm. However, with recent headlines touting it as responsible for celebrities’ private photos being leaked and companies like Timehop, the social app, losing details of 21 million users, you’d think otherwise. But like anything revolutionary, cloud software has sometimes been misrepresented, masking how great it really is and even dissuading some small businesses from upgrading for the better. But hands-on
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accounts from these entrepreneurs ensure the wool’s not pulled over your eyes.
‘I’m less secure with the cloud’ Perhaps aided by the ethereal imagery of the word cloud, a most common myth is it’s a less secure and reliable form of file storage than physical devices like computers and phones. “However, if your devices are stolen but you’ve stored your data on the cloud, you can still download them onto a new device, saving your data from being lost forever,” argues Christian Brøndum, CEO of Planday,
the employee schedule service. Having identified businesses rapidly shifting towards remote working, he’s always believed technology would bridge the gap between new-age telecommuters and on-site employees. The result was Planday and, given the whole service runs off cloud technology, Brøndum’s clearly not worried. “Cloud technology is also strongly encrypted so that hackers are unable to steal any of your data,” he reasons. Indeed, from online banking to collaborative messaging, accessfrom-anywhere services often boast tight encryptions, two-factor authentications and reliable infastructure. RingCentral, for
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example, claims 99.999% of uptime. And judging by the cloud’s market value, the rest of the world certainly isn’t anxious either. “With the public cloud software market set to grow to $236bn by 2020, we can safely say cloud technology is here to stay and adoption will only increase alongside the demand for remote working,” Brøndum says. With a figure like that, the technology’s set to grow even bigger, better and safer in the years to come. “As cloud technology becomes more sophisticated, businesses and employees alike are reaping the rewards, with increased productivity and communication at all levels,” Brøndum concludes.
‘The cloud’s only for bigger businesses’ Something so cutting-edge must boast a price tag only corporations can get hold of, right? On the contrary, it benefits just about anyone’s coffers. Colin Yates, chief support officer at WorkMobile, the data capture solution, would know, as his company has encountered plenty of potential customers with cold feet over buying a cloud solution to produce data about their business. “Although migrating to the cloud may incur some upfront costs, the long-term savings in IT management expenses are widely recognised,” Yates says. “With cloud computing, businesses no longer have to pay for the energy, hardware, software licensing, refreshes, storage space and other things that come with managing your own software.” It’s more often than not that signing up with a cloud provider sees the heavy-lifting rest on their shoulders from the sticker price. “Many providers have their own data centres, meaning the cost is included in their subscription,”
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Yates says. That’s not to mention pricing models often scaling with a business’ growth or being ‘pay for what you need’. Moreover, upgrades to the latest tech come part and parcel with cloud providers, giving the most bang for your buck. Although it’s a long-term return on investment, the cloud also saves by tangibly axing bureaucratic waste. “Research has shown that each worker in the UK uses on average a staggering 45 sheets of paper per day. Shockingly, two-thirds of this is thought to be waste,” Yates says. And it’s not just trees unnecessarily taking a hit in that regard. “Not only is all this paper itself an unnecessary expense but we also regularly see companies spending money on employing and training people to manually input the data from these documents into digital databases before they can then be stored appropriately,” Yates continues. Cutting out the middleman has never seemed so logical.
necessary to remove the reluctance of some employees who had not yet acquired this culture of sharing and collaboration.” With the few weaning issues ironed out, Potter’s witnessed unprecedented cohesion ever since. “For example, in the case of annual appraisals, everything is written in the programming language specific to our provider and then hosted in the cloud,” she says. “The main advantage is to share files and work collaboratively.” Considering Masternaut spans five countries, a network-wide cloud is a godsend, to say the least. “The cloud is a privileged ally for internationalised companies,” Potter concludes. “For teams that are scattered across multiple countries and at a time when employees have become nomadic, the cloud allows them to access their files wherever they are in the world.”
‘My workers won’t accept the change’ To see changes, as David Bowie put it, “turn and face the strange”. But his wise lyrics won’t necessarily convince an entire office to accept a renovation of how they work – unless they’re huge fans. However, when making the call to totally switch to the public cloud two years ago, Helen Potter, VP of HR at Masternaut, the vehicle tracking and fleet management solution, found most employees didn’t need tempting. “This way of doing things is perfectly integrated by digital natives, who already use the cloud in their private environment,” she says. Although, she admits not everyone was on the same technological wavelength. “On the other hand, it was sometimes
08/04/2019 18:02
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Brexit moments
A divorce to
remember BY ERIC JOHANSSON
Pulling Britain out of the EU has been far from a smooth process. Take a look at some of the most embarrassing, awkward and downright cringeworthy moments so far
L
eaving the EU means cutting through a lot of red tape and, sooner or later, someone is bound to get wrapped up in it. From Theresa May being left out in the cold as other European leaders happily chatted away around her to Boris Johnson’s proEuropean treatise being unearthed, the three-year slouch from the referendum has been packed with humiliating situations. But Simon Hill, CEO and founder at Wazoku, the idea management platform provider, isn’t surprised. “From the outset the whole process has been poorly handled,” he says. “The government has taken an admittedly difficult situation and made an absolute mess of it and there has been a succession of embarrassing moments.” Indeed, there is a slew of cringe-filled and noteworthy moments to think back on. So follow us down memory lane as we relive the seven worst ones. APRIL 2019 ELITEGLOBAL
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Brexit moments
The imaginary reports
David Davis’ tenure as secretary of state for exiting the European Union was, much like the whole process, tumultuous to say the least. From getting slight castigations for not attending the entire first round of negotiations with the EU to misquoting Winston Churchill, Davis seemingly stumbled from one embarrassment to another. However, none can be as problematic as the one about the elusive impact assessments reports. For the longest time, Davis maintained that the government had carried out 57 studies on 85% of the UK economy in “excruciating detail” about the impact of Brexit. Understandably, the rest of the government, particularly the opposition, was eager to read these reports. But Davis refused to give them up. It even got to the point that Davis was warned about being held in contempt of parliament if he didn’t produce these reports. It was only when he was forced to face a select committee that Davis revealed no impact studies had actually been carried out. Not a great moment for any politician and certainly not for the one in charge of the biggest political project since the Second World War.
In or out, Boris?
Few people personify the Leave campaign the way Boris Johnson does. The former mayor of London announced his allegiance to the cause on Monday February 22 2016. Since then he’s often and loudly repeated his devotion to yanking Britain out of the EU with his personal bombastic style. So it was slightly shameful when The Sunday Times unearthed and published a column stating the case for remain penned by a certain Boris Johnson on Saturday February 19. In the unpublished draft, Johnson argued that Brexit could lead to further rifts between Scotland and the rest of the UK, strengthen Vladimir Putin and that access to the single market was clearly beneficial. Johnson later said he wrote the column as a tool for his own thought process. While it’s understandable that people change their minds, it’s not a good look when the person who’s arguably the biggest Brexiteer out there seemingly wasn’t sure about it.
Brexit in a single shot
The European Summit of December 2016 was always going to be uncomfortable. With Britain deciding to exit the EU just months earlier, the prime minister would’ve been wise to expect a chilly welcome. However, no one was expecting to see the divide as blatantly out in the open as it was. In a short clip dubbed Brexit in a Single Shot, May can be seen fiddling with her cuffs while other European leaders happily greet, air kiss and chat with each other around her. Even though there were other clips of the prime minister smiling and talking with other leaders, the clip was also seen as a demonstration of how the other 27 nations were ganging up on Blighty. One word: awks.
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Brexit moments
What majority?
On Saturday March 23 2019, Nigel Farage climbed up on an open top bus in front of 200 Leave campaigners standing at a pub parking lot. Speaking to the crowd who’d joined the March to Leave march a week earlier, the former UKIP leader was furious. The reason for his rage was what he perceived as a mortifying betrayal of trust by the prime minister that Brexit Day could be postponed until after Friday March 29, the original day the UK was scheduled to leave the EU. Pointing at the roughly 200 listeners gathered outside of the Horse and Groom pub, Farage said: “There are 17.4 million here, can’t you see them?” This may’ve had a bit more impact if it wasn’t for the fact that hundreds of thousands of Remain campaigners had joined the People’s Vote march in London on the same day. The detractors of Farage’s march from Sunderland to London were quick to jump on the discrepancy between the two protests.
The change of heart
Dominic Cummings served as campaign director of Vote Leave. He was the mastermind of the infamous red bus pledging £350m per week would go to the NHS instead of the EU if Brexit happened. Most recently, people may recognise him as the guy Benedict Cumberbatch played in the drama Brexit: An Uncivil War. So you’d think he’d be devoted to the cause. Yet, he admitted in 2017 that leaving the EU might have been “an error.” Engaging in a Twitter conversation with a Financial Times reporter, Cummings was asked if there was anything he’d like to change with the referendum. He replied: “Lots! I said before [the referendum] was [a] dumb idea, other things [should’ve] been tried [first]. In some possible branches of the future leaving will be an error.” When even one of the big thinkers behind the Leave Campaign has his doubts, then it doesn’t really spark confidence in the process.
Not in front of the kids
Everyone can get angry at times. But it’s usually a good idea to address the issues you might have with someone in private. This common insight didn’t stop May from confronting European Commission president Jean-Claude Juncker about him calling her negotiations approach “nebulous” in front of a room full of other politicians. Even worse, the whole argument was captured on film. While the film itself didn’t have any sound, lip readers have stated that the heated exchange began with May saying: “What did you call me? You called me nebulous.” Touching her arm and shaking his head, Juncker replied: “No I didn’t, no I didn’t.” Although, he actually had called her “nebulous and imprecise” at a press conference just hours earlier. Not quite the inspiration one would hope for from our world leaders.
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Brexit moments
Failed friendship requests
Whenever relationships are at an end, the two parties reach out to their acquaintances, reminding them what important friends they are. Whether this is a genuine push for connection or just to ensure someone will help them move out of their partner’s flat remains debatable. And Britain has found itself in a similar situation after deciding to leave the EU – it needed chums to ensure it didn’t lose everything in the divorce. So it was less than ideal when foreign minister Jeremy Hunt went to Slovenia to solidify the nations’ partnership and instead managed to offend the host nation. The gaffe occurred when Hunt stated how happy he was to be in the country before adding: “As a fellow European country, the UK is very proud of the transformation there has been in Slovenia, a really remarkable transition from a Soviet vassal state to modern European democracy.” The only problem with that remark was that Slovenia never was a part of the Soviet Union. In fact, at the time it was part of Yugoslavia, which held on to its independence under Josip Tito. Milan Brglez, former president of the Slovenian parliament, was quoted as saying: “The British foreign minister comes to Slovenia asking us for a favour – to discuss with the foreign minister how to avoid a no-deal Brexit – while arrogantly insulting us.” Maybe Hunt needs to take a course in how to make friends and influence people?
Brexit quotes to
remember
A lot of things have been said about the divorce proceedings. But some certainly made a more lasting memory than others
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Brexit moments
The free trade agreement that we will have to do with the European Union should be one of the easiest in human history. While his chutzpah can be applauded, secretary of state for international trade Liam Fox’s 2017 assumption that the Brexit negotiations would be a breeze seems slightly erroneous in retrospect.
Brexit means
Brexit Theresa May’s catchphrase has echoed across the Twitter in nauseam since it was first uttered in the run up for the Conservative leadership contest in 2016.
He called all this on. Where is he? He’s in Europe, in Nice, with his trotters up Actor Danny Dyer launched into a expletive-rich tirade about David Cameron on Good Evening Britain.
Of course Brexit means that something is wrong in Europe. But Brexit means also that something was wrong in Britain. The European Commission president Jean-Claude Juncker commented on the 2016 referendum results, arguing that 40 years of lies about the EU was behind the Brexit vote.
F**k business Boris Johnson proved his diplomatic touch when a Belgian ambassador enquired about the concerns a hard Brexit would cause corporations.
Are you insane? Sky News’ Adam Boulton’s pointed question came after Brexiteer MP Mark Francois had argued for a no-deal Brexit, something Boris Johnson had said was insane two days after the referendum. APRIL 2019 ELITEGLOBAL
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ADVERTISING FEATURE
The one place engineered to bring rapid growth to businesses With scaleups comprising £1.3tn of the £1.9tn generated by all UK SMEs, there’s clearly more than a few secrets business owners need to learn. Fortunately, the Festival of Enterprise will reveal all
I
t can be a tough yet seemingly simple question all business bosses must answer: what strategies should be adopted to scale up a business? More specifically, what support, products and services do business owners need to execute their strategy? An answer is clearly needed, as according to the ScaleUp Institute, the data analytics company, out of £1.9tn generated by all SMEs around £1.3tn is from scaleups alone. Such statistics are certainly tough to ignore. With so much success and opportunity concentrated around just 36,500 UK businesses, there’s a clear need to cascade the knowledge and inspire more SMEs to get on their growth journey which, overall, can boost the UK’s sinking productivity levels. Fortunately, one place is designed to do just that. The forthcoming Festival of Enterprise is a two-day business event, now in its third year, taking place across October 23 and 24 at the National Exhibition Centre (NEC), Birmingham. As part of its arsenal to bring rapid growth to Britain it boasts a stellar, 150-strong speaker line-up, with experts from 54
all aspects of business including consulting, innovation, funding, marketing, technology and leadership, sharing critical insight on how to successfully grow companies. And to ensure no business is left behind, it’s completely free to attend. The show floor’s decked out with
international technology, marketing brands and national brands showcasing growth solutions alongside regional specialists from finance, professional services, marketing, IT and technology sectors. But it’s far from just a pretty sight: the conference agenda is themed across five keynote stages,
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ADVERTISING FEATURE
The event is perfectly balanced because the conference agenda delivers the strategic insight while the exhibition show floor is where business owners can discover innovative products, solutions and services to execute their strategy.
with previous speakers including the likes of John Peace of the Midlands Engine, Nick Chism of BEIS and Patrick Magee of the British Business Bank, alongside experts from PwC, BGF, Google, Facebook, AWS, Cisco, Aston University, Birmingham City University and the DIT. “Over the last two years we have had conversations with hundreds of ambitious business owners and their feedback shouts loud and clear that there is a real need for more support around the strategies of scaling up a business,” says James Ashwood, organiser of the Festival of Enterprise. “We rebranded the SME Live event to the Festival of Enterprise and completely refocused the content proposition because our audience and business owners want the strategies for scaling up rather than general business information. The event is perfectly balanced because the conference agenda delivers the strategic insight while the exhibition show floor is where business owners can discover innovative products, solutions and services to execute their strategy. “We are breaking new ground with our 2019 event and invite brands, service providers and stakeholders in business growth to get in touch and discuss how they can be involved in
this exciting event.” While the core of the occasion is tailored to delivering established companies the strategies to scale up, organisers are equally keen to support future scaleups. As a result, there’s a keynote stage dedicated to accelerating startup growth. In fact, acquiring more customers and achieving funding are also essential components of the Festival of Enterprise proposition, so will too have their own dedicated keynote stages. That’s why right at the heart of the event is a central arena being built to share stories of success from some of the UK’s most influential business leaders. “We have created the platform for the high-growth community to come together,” says Tansy Stevens, organiser of the Festival of Enterprise. “As well as promoting the event to the fastest growing companies in the UK, we are keen to support all stages of growth and inspire more SMEs to challenge their thinking, discuss their business with the leading experts in growth and come away from the event with a clear sense of what to do next, having made valuable new contacts who can help them on their journey.” Also on offer are high-impact networking features and mini-events taking place over the duration of the two days, along with informal festival
elements to create an inspiring and entertaining environment to learn, meet and network at the recently upgraded NEC. “It is no secret that the West Midlands is the fastest growing UK region outside of London, so it makes perfect sense for the Festival of Enterprise to return to the NEC, Birmingham this October,” concludes Kathryn James, MD of NEC Group Conventions and Exhibitions. “I’d like to extend a warm welcome to the event for the third year which, with its showcase of innovative business solutions, should prove to be a fantastic opportunity for small and medium-sized enterprises to discover how they can drive business growth.” The Festival of Enterprise takes place on October 23 and 24 2019 at the NEC, Birmingham. More information about getting tickets or opportunities to get involved can be found at www.festivalofenterprise.co.uk
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WHAT’S THE BIG DEAL? As Britain’s seemingly unconscious uncoupling from the EU lingers, we dig deep into the different options the UK has to stay on free trade terms By Angus Shaw
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he European Union is all about free trade. The ability to easily export and import produce across borders has been central to it ever since the days of the European Coal and Steel Community. And while out to extend its continental reach, it’s also created many different trade deals with nations outside the EU. However, as well as benefits, each one comes with unique drawbacks. “The main differentiation between them all is different levels of economic integration,” says Agelos Delis, an economics professor at Aston University. Even though each deal comes with special caveats and rules, every nation desiring to trade with the EU must always do one thing. “A country wanting free trade with the EU must have controls [on its] borders because it may have different trade agreements with other countries,” explains Delis. He points to Norway, which is a member of the European Economic Area (EEA) and not the EU. As such, it’s able to independently strike trade agreements with other non-EU nations and that’s where it becomes tricky. “For example, assume Norway has a free trade agreement with the United States,” Delis explains. “If there are no controls on the border then US exports to Norway can enter an EU country with zero tariffs and then there’s no control over them entering the whole EU.” As Brexit looms, let’s take a deeper look at the three different ways non-EU countries have managed to craft trade deals with the EU – customs unions, the EEA and bespoke trade deals.
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Customs unions
It’s easy to equate the European Union Customs Union (EUCU)
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with the EU as all member states are part of the customs union. However, not all in the EUCU are EU nations – including Monaco and some UK territories like the Isle of Man. To make it even more confusing, the EU has created customs unions with Andorra, San Marino and Turkey that aren’t part of the EUCU but exist through different bilateral agreements. However, what all these nations have in common is – mostly – tariff-free trade with one another. But there are sacrifices to be made. For instance, the EU decides all their trade deals and they must impose a common external tariff on imports from outside the customs union, meaning exports to the customs union are the same no matter what country they enter from. “Countries don’t have independent trade policies so avoid the common external tariff,” Delis explains. In other words, joining the customs union means giving up some of your agency to strike trade deals and put up tariffs on your own. “So the more integrated you become, the more you lose sovereignty,” Delis continues. It may sound like a rotten deal to some but constantly checking exports to fit the EU’s criteria can be time-consuming and costly, especially if you regularly trade with the EU. So with the
EU picking your trade agreements from the ground up, your exports are guaranteed to be compliant and free trade-worthy without needing taxation or tight border controls. “If you’re [not a] member of the customs union your goods are going to be stopped at the border and this adds additional costs,” Delis summarises. But for non-EU members of the EUCU there are a couple more caveats at play. As they’re not in the single market they don’t have access to all of the EU’s four freedoms – the free movement of people, goods, services and capital between borders. “In the single market you agree that several rules and regulations about goods are the same across member countries,” Delis says. And there are yet more footnotes needed for the EU’s bilaterally agreed customs unions, with Turkey excluding essential economic areas like agriculture, coal and steel from tarifffree policies, Andorra only including industrial products and processed agricultural products and San Marino exempting goods listed in the European Coal and Steel Community treaty. As a result, it seems there’s no definitive way a customs union agreement should look when a country’s outside the single market.
European Economic Area Another way to dodge EU tariffs is by joining the EEA, which three
If you’re [not a] member of the customs union your goods are going to be stopped at the border and this adds additional costs
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countries – Iceland, Liechtenstein and Norway – have. Instead of ceding power to forge trade deals like with the EUCU, these states must enforce the EU’s four freedoms, put money into the Union and prove exported goods are made largely within the EEA. The latter’s otherwise known as rules of origin, which can put brakes and cost on exports with a need to check and verify where everything’s made. “[If] your goods have to cross many times between your country and the EU, you’re in trouble,” Delis says. But once that’s all taken care of, the gateway to the single market lifts. “They’re not members of the single market per se but can use it,” Delis says. EEA members must also obey EU laws – including health and safety, environmental and social protections – but can’t vote over them. However, they do get some wriggle room in exchange for being outside the law-making process and can opt out of certain rules. For example, competition regulations over agriculture and fisheries aren’t enforced by Norway. “Norway didn’t want to go to the full single market,” Delis says. “So it’s outside the EU common agricultural and fisheries policies but still has to make contributions to the EU.” So a lot of freedom and benefits but no ability to infuence laws and regulations like EU members can.
Bespoke trade deals
Forget the Customs Union or EEA – the EU can drum up customised trade agreement’s with any country it fancies without a pre-existing model, with recent examples including the likes of Japan and Mexico. Although, this is perhaps the most difficult kind of deal to reach.
Take Canada for instance, which in 2016 signed the Comprehensive Economic and Trade Agreement (CETA), specifically outlining tariffless commerce between Canada and the Union. “It’s a shallow way of economic integration because they’re eliminating tariffs only,” Delis says. “And there are some agreements about services, copyrights and intellectual property but again, these are not going very deep.” Despite only needing surface-level integration CETA will see Canada save £529m in import tax while the EU will enjoy reduced tariffs for 9,000 Canuck products as a result of free trade. It still means Canada must implement border checks and ensure exported goods meet EU standards but doesn’t restrict the nation’s trade deals or integrate EU law. However, CETA has taken ten years to ratify and is still to be implemented. Canada’s far from the only nation looking for a trade deal. Talks over the proposed USEU Transatlantic Trade and Investment Partnership kicked off in 2014 under US president Barack Obama but has met difficulty after difficulty, including president Donald Trump halting the agreement in 2018. And if it sees the light of day, it’d require approval by all EU member states, the majority of the European Parliament, both houses of the US Congress as well as the US president. At the time of writing, UK members of parliament are still trying to figure out what they actually want out of Brexit. However, as this rundown shows they can never expect to have their
cake and eat it. “There are always trade-offs, there’s no win-win,” Delis warns. “The more independence and sovereignty you want to design your own trade policy, the less business you’ll have with the EU because there will be rules.” It’s certainly a line the EU’s repeated loud and clear for Britain. But whether negotiators can make a breakthrough in the eleventh hour remains to be seen – and Delis isn’t confident about the final deal in any case. “From an economic point of view it’s very difficult to think of scenarios where [Britain] can gain from Brexit,” he concludes.
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BRAND BRITAIN
BRAND BRITAIN BOOM BY ZEN TERRELONGE
It’s known for terrible weather and fish and chips but Britain is also the birthplace of many homegrown brands and they’re incredibly desired overseas hat exactly does it mean to be British? Stereotypes and Hollywood would lead you to believe it requires a stiff upper lip, speaking the Queen’s English and excessive tea consumption throughout the day, with the nation’s beloved beverage accompanied by an array of biscuits, scones and crustless sandwiches. Of course, we know better than that. Where its people are concerned, Britain is a melting pot of diversity filled with different races, styles, accents, tastes and passions and this translates to British businesses too. Companies may be built on UK soil but, like the people at the helm of and within them, they’ll possess their own flavour and idea of showcasing their Britishness, particularly if the latter is an element of their USP. And that’s where organisations such as Made in Britain and Make it British come in. Both are on a mission to champion manufacturing across the British Isles. Explaining in 2011 her reason for launching Make it British, which started as a blog, founder Kate Hills detailed: “When I worked at Burberry in the late 90s there was still a factory manufacturing trench coats downstairs in the head office, as they had done for over a century. Fast forward ten years and Burberry, an iconic British brand, had closed all of its production units in the UK bar one, claiming that they were no longer commercially viable.” Later in her career in a role at a UK department store she noticed how ranges she took care of were being manufactured in China or India. This made her take action. “I wanted to find a way to support UK manufacturing,” said Hill.
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After all, there’s a big market for Britainborn brands overseas and, as we slip further into this period of uncertainty, it stands to reason they’ll want to keep the Union Jack flying high to capitalise on the international appeal. Indeed, a 2018 study of 8,000 global consumers conducted by Barclays revealed 39% of respondents would be more likely to buy a product with the flag emblazoned on it. This appetite for the British banner spiked significantly in markets including India, the UAE and China at 67%, 62% and 61% respectively. The report from Barclays also found food was the most alluring of the nation’s sectors, as respondents would pay up to 22% more for British-made grub. This was followed by the country’s cars on 10% and clothes and alcohol both on 9%. The zest for products from the UK is due to a belief among international consumers that they come with quality, reliability and popularity. “The picture continues to look positive for Britain’s exporters, with international consumers going out of their way to buy British,” said Baihas Baghdadi, the then global head of trade and working capital at Barclays, at the time. “Our research shows that some of the biggest opportunities lie in emerging markets, where British craftsmanship is most valued. The prize is substantial and exporters should be looking to highlight the provenance of British products to take best advantage.” So in keeping with manufacturers making the most of their British heritage, we’ve spoken with a number of leaders of such companies to find out how their international ventures are shaping up.
Brand Britain
Timeless Chesterfields Having launched in 1982, handcrafted furniture maker Timeless Chesterfields first started exporting in the late 80s and initially traded with customers who would then resell the firm’s products independently. This began in France where Bolton-based Timeless Chesterfields had sealed a partnership with an expat who was living in the country. The company’s managing director Matt Deighton says the firm’s Britishness is critical. “This is our most important USP and is the foundation of everything we have achieved in relation to our export sales,” he explains. The internet really allowed Timeless Chesterfields to make the most of exports though as it started selling directly to consumers via the web and an export department was launched in 2012 to make overseas sales more focused. “The export department came out of necessity,” says Deighton. He notes that the UK showroom team was also looking after exports for numerous years, which became overwhelming. “Setting up the export department was reliant on picking the right export sales manager, which we thankfully did,” he adds, highlighting just how “fundamental” the hire was for success.
Interestingly, while the Brand Britain element is helpful overseas, it doesn’t seem to have the same pull at home. “I would go as far to say that British manufacturing is respected more in the export markets than in the UK which can be frustrating at times,” Deighton claims, finding it something of a struggle to price match cheaper-made productions from Europe and Asia. “The Made in Britain angle is most prevalent when the customer is looking for quality.” With exports to over 60 countries including the US, it stands to reason that logistics can sometimes prove to be a challenge but selecting good partners helps to ease those scenarios when they arise. Based on its exporting longevity, Timeless Chesterfields has changed with the times to an extent but insists that keeping it classic can help. “You have to embrace how the export markets perceive the UK, which is stereotypically a quaint and somewhat nostalgic view of Britain which doesn’t necessarily sit comfortably with the modern Britain we know,” concludes Deighton. “Bowler hats, cups of tea and red post boxes are all to be celebrated.” APRIL 2019 ELITEGLOBAL
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Kempadoo Millar From opening for business back in 2013, it was just a year after that Rhian Kempadoo-Millar started exporting her range of Leeds-manufactured flat caps. “After recognising the huge opportunities that lie in exporting, we began working in conjunction with several mentors and skilled export strategists to develop a solid export plan that has allowed us to reach 28 countries worldwide,” says the founder and managing director. In addition to Brits including Prince Charles, Idris Elba and Anthony Joshua as wearers of the hats, Kempadoo Millar has customers in the US, Malaysia, Dubai, Russia and Burma. “We’re now working towards taking products to other parts of the world,” says Kempadoo-Millar, who has one of her mentors located in Hong Kong. The company’s website has been a key method through which sales have been generated abroad, with redevelopments including currency switching and language options to prevent any friction. But while there is appeal for the Yorkshire-made hats overseas, consumers wouldn’t necessarily refer to them
in the same way. “We have had to conduct extensive research into the native word for flat cap in different countries and cultures across the world,” says Kempadoo-Millar. “In America and Australia, the term flat cap would not be recognised. It has been critical for our export strategy that we adapt our SEO and online marketing efforts to reflect this.” In addition to her mentors, Kempadoo-Millar has also had discussions with the Department for International Trade to seek additional support and will often attend its workshops to further her understanding of the markets she hopes to penetrate as the business scales. “With the flat cap seeing a resurgence over the last few years, Kempadoo Millar has been at the heart of that, with its caps crowning many household names since it was founded,” she says. “I want to put the Yorkshire cool back into the flat cap with something that is more funky than farmer.”
Atom Brands Craft beverage purveyor Atom Brands begun selling its wares overseas three years ago, delivering its distinct range of alcohol to a new audience. The first step was targeting markets closer to its Kent base of operations rather than going too far afield from the off. “This meant we could get to them cheaply and quickly, build the relationship with our key partners faster due to proximity and really support the opening of the markets more effectively,” says Nick Ravenhall, sales and marketing director at Atom Brands. “It’s cheaper and quicker for us to get to Germany than Taiwan.” With its position in one of the UK’s home counties, Ravenhall says that embracing British culture is an important part of the brand as it spreads across five continents. “You don’t get much more English than gin nor do you get more Scottish than Scotch whisky – legally you can’t make Scotch whisky anywhere else in the world other than Scotland,” he reasons. Having said that, the impact of Brand Britain has the “least 62
impact in the Anglo markets” according to Ravenhall, who points to the US, Canada, Australia, New Zealand and South Africa as tough nuts to crack. However, the very Britishness of the business allows for an interesting storytelling piece that makes Atom Brands appeal in areas such as Asia – including China, Japan and Taiwan – and other emerging markets. “There is so much history in Britain tied into the spirit categories that we work with,” declares Ravenhall. “Rum, gin and Scotch whisky have heritage stories that stretch back over centuries and each have been tied very closely with the cultural history of the UK – when Great Britain was fighting Napoleon the upper classes stopped drinking French brandy and embraced Scotch whisky. These histories create a legitimacy to our brands that are intrinsic to what they are.”
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The Protein Ball Co. The Protein Ball Co. is all about promoting clean eating, producing natural protein balls for fitness lovers to fuel up on. Based in Sussex, the company hand-rolls all products in its factory. Straight out of the starting blocks, The Protein Ball Co. didn’t waste any time wading into international waters. “We pretty much launched into the UK, Germany and Denmark at the same time,” remembers Matt Hunt, founder of The Protein Ball Co. “Our business in Germany has always been very strong over the years and export is now over 50% of our business.” The overseas foray was initially brought about following Hunt exhibiting the brand at the International Food & Drink Event in London, which piqued the interests of foreign distributors. “We sent samples, arranged a call and over time started trading,” he says matter-of-factly. “I think international customers know that British products have great quality and innovation behind them. Quite often at a trade show it is the British pavilion which offers the most innovative and contemporary branded products on the market which attracts international buyers.” In terms of what allows The Protein Ball Co. to stand out, Hunt notes that other protein ball brands in the UK manufacture abroad. “So we’re unique in that everything we do and produce is from one base in Worthing in Sussex,” he says. Offering some words of advice for other British brands looking to go global, Hunt says just using the word “British seems to sell well.” “For example, The Great British Porridge Co and the Great British Biscotti Company are two brands that are export-driven due to the heritage of their names,” he offers. Concluding on where companies should look to, Hunt says: “The Chinese market seems particularly preoccupied with products being made in Britain and if possible it is favourable to use of the Union Jack flag on the packaging to highlight this.” APRIL 2019 ELITEGLOBAL
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BLOCKCHAIN
THE BUILDING BLOCK FOR BUSINESSES Blockchain is undeniably changing the way businesses trade. And it’s increasingly imperative now more than ever that every entrepreneur going abroad capitalises on all the tools it offers BY VARSHA SARAOGI
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BLOCKCHAIN
Blockchain’s major asset is that it creates trust between multiple parties without the need for middlemen and for businesses this primarily means a simplification of cross-border trade Igor Pejic, BNP Paribas
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lockchain technology is changing business as we know it. From startups raising money via initial coin offerings and bitcoin to smart contracts and fraud prevention, SMEs have every reason to consider introducing the tech in their corporate infrastructure. “Blockchain technology is critical to the future of business,” says Grace Wong, co-founder of Liven, the online payment gateway utilising cryptocurrency. “The web 3.0 revolution is already underway and is beginning to supplant the fundamental business process that drives major large and smallscale enterprise.” Importantly, for entrepreneurs looking to expand abroad, blockchain can be the panacea they need. While it might be disrupting all sectors already, what exactly does blockchain mean? “Blockchain [is a] technology that provides a public ledger of every transaction,” explains Johnny Hon, chairman of The Global Group, the international VC firm. Every record is encrypted and timestamped and the ledger’s contents can only be updated by adding another block linked to the previous block, creating a block of chains. No one can retroactively go back and change the ledger once it’s been created.
The concept dates back to 1991 but didn’t rise to prominence until late 2008 when the person or persons going under the pseudonym Satoshi Nakamoto penned a paper outlining how a hashcash algorithm, a way of verifying work used in spam protection, could be used to add blocks to the chain without a single centralised authority. Instead, a number of linked computers, or nodes, that validate the new block and maintain the chain. A few months later Nakamoto, who’s real name remains unknown despite several attempts to uncover it, launched bitcoin. Since then blockchain has moved way beyond just cryptocurrencies and is seen by some as the foundation of the future’s digital infrastructure. “[The] technology has the potential to touch every part of business, from verification of assets to supporting background checks of employees, to verifying the entire supply chain of a potential business,” Hon adds. And if you’re running an SME with global aspirations, this technology can help you massively. For starters, it guarantees more safety and security than you might be used to. “Entrepreneurs and their businesses in many industries can benefit from blockchain that handles authentication and reconciliation issues encountered
on numerous occasions,” Hon says. For instance, because the ledger cannot be altered retroactively without altering all prior blocks, blockchains are highly resilient to cyber attacks. And that’s not all. “Crucially, it will protect against identity and data fraud as the decentralised data stored on multiple computers and networks is significantly more secure than traditional systems,” he adds. One of the challenges businesses face with international companies is being unable to trust trading partners with timely payments. Blockchain might be the answer to that. “Blockchain’s major asset is that it creates trust between multiple parties without the need for middlemen and for businesses this primarily means a simplification of cross-border trade,” says Igor Pejic, head of marketing at BNP Paribas Personal Finance, the banking company. One of the ways businesses can do this is by using smart contracts executed by blockchain technology. Unlike conventional contracts, smart contracts consist of software code which are inalterable after they’re deployed. This ensures neither party in a deal can walk away without doing their part. “In a smart contract, you and the other party pre-define algorithmically a what-if scenario,”
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The web 3.0 revolution is already underway and is beginning to supplant the fundamental business process that drive major large and small-scale enterprise
Grace Wong, Liven
explains Pejic. For instance, when the goods are received, the payment is released automatically. “This can save litigation costs and valuable time by ensuring the other party holds up their end of the bargain,” he adds. Indeed, using blockchain means reducing the amount of resources and time entrepreneurs put in for administrative tasks. “While long transaction times are irksome for individuals, they can be threatening to smaller companies,” Pejic says. “If you must wait for two weeks for your money to travel halfway throughout the world, you might be haunted by liquidity problems. Moreover, shorter transactions reduce counterparty and settlement risk. The algorithm forces the other party to settle the transaction, so you need not trust them. And since transactions are immediate and don’t take weeks, the likelihood that your transaction partner will default in the meantime is negligible.” While reducing time and unnecessary costs are some of the advantages, one of the main attributes of blockchain is that it can replace money with digital cash – hardly shocking as the technology was literally made to support bitcoin. Companies can use blockchain to transfer money directly between peers without any intermediaries like banks. And making convenient international remittances will no doubt be a reason for your business
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to adopt blockchain. “Blockchain is helping us move away from traditional payment processes and methods of interaction such as telephone or email and progressing us towards intelligent electronic ones,” Hon declares. “In a world increasingly dependent on high speed [and] reliable connections, blockchain will be crucial.” Additionally, another key characteristic of the blockchain technology is that it’s not constrained by currency conversions. Consequently, payments for goods from distant buyers and payroll to overseas employees becomes easier and can be completed at a fraction of the current costs. This is becoming increasingly useful as global currencies keep fluctuating. “When expanding to countries with volatile currencies [like] Venezuela it’s possible to mitigate currency risks,” Pejic says. For instance, the fluctuating currency in Venezuela drove the government to launch its own cryptocurrency, the Petro, to save it from economic crisis and many locals have even resorted to using bitcoin for their day-to-day transactions. The South American country is hardly alone. Turkey, Iran and Zimbabwe too are on the brink of converting to using cryptocurrency to solve their woes. “Even in cases with a low currency risk, traditional remittances are significantly biting companies’ balance sheets,” Pejic adds. “Using blockchain-based remittance networks is so far the clearest use case.”
Banks are also increasingly looking to blockchain to transform outdated systems and capitalise on cryptocurrency. For instance, The Bank of England said it could increase GDP by 3% by introducing a central bank digital currency. Even traditional banks are realising its benefits. JPMorgan Chase announced the launch of its own digital coin, JPM Coin, which can be used for transfer of payments instantly over a blockchain network. Looking at these advantages, it’s easy to see why entrepreneurs are investing more into blockchain. Furthermore, to help increase blockchain’s adoption across multiple industries and enlighten businesses of the technology’s potential, Hyperledger, an open source collaboration initiative, was established in 2016 by the Linux Foundation. In fact, it’s supported by blue chip member businesses including IBM, American Express, Intel, Deutsche Bank and Accenture. The main goal is allow enterprises to build customised blockchains that would answer specific needs instead of letting companies solve issues on their own. And it already had 230 organisations as members as of July 2018. Indeed, blockchain makes international dealings more conducive for SMEs. And given how it could boost trade by more than $1tn in the next ten years, according to World Economic Forum, it’s testament that head honchos must prioritise upgrading their systems to being blockchain-friendly.
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