Global opportunity 2015 by Global Opportunity

The 2015 Global Built Asset Wealth Index assesses the development of a nationâ&#x20AC;&#x2122;s built environment to show which countries are creating the long-term, sustainable foundations for economic, social and environmental success.

Global Opportunity 2015 FRONT COVER: WWW.ALAMY.COM

Exporting the UK’s bank of knowledge Art Editor Nadia Nelson nadia@tpggroup.co.uk Creative Director Oscar Bowring oscar@tpggroup.co.uk Editorial Assistant Jack Ball jack@tpggroup.co.uk Sales Director Karen Frieze karen@tpggroup.co.uk Publisher Steve Gardner 020 7490 0609 steve@tpggroup.co.uk

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Editor Sarah Cartledge sarah@tpggroup.co.uk

Building upon the success of the first publication Global Opportunity 2014 I’m delighted to welcome you to Global Opportunity 2015. Historically the UK has been home to pioneering leaders of infrastructure, healthcare, financial services and sports, among others. Global Opportunity is designed to help you export this bank of knowledge to every corner of the globe, benefitting you and your international clients at various levels of the industrial supply chain. Accompanying our growth since 2014, I’m delighted to announce an expansion of our partners who have provided comprehensive overviews of the UK’s crucial markets and industries that offer the greatest opportunity for UK business to flourish in the 21st century. These include transportation industry bodies such as the Rail Industry Association and the British Aviation Group, alongside key regional trade and networking associations designed to promote bilateral trade with our future crucial markets; the China British Business Council, the UK India Business Council, the Middle East Association and the Business Council for Africa. They demonstrate the most effective and successful business practices that will bring you to the fore of our leading competitors. Through specifically selected case studies there is a provision of advice available, from the contemporary challenges of building more resilient cities in the face of ever extreme weather to the infrastructure opportunities presenting themselves in some of the richest countries in the world such as Singapore and Qatar. With their challenges and experiences in operating within these environments, we hope you will be able to draw upon their expertise when seeking to broaden your commercial interests into overseas markets. With his tenure at Healthcare UK coming to an end, Managing Director Howard Lyons illustrates how our globally recognised NHS brand can commercialise on 65 years of

Editorial

organisational and clinical expertise to fill its funding gaps and raise levels of clinical excellence across more regions of the world than ever before. In conjunction with UKTI, British Expertise and the RIBA, Global Opportunity 2015 shows you how to make the most of all the advice available to British companies as we continue as a nation to commercially punch well above our weight on the global stage. With much of this advice free, we’ll show you how to source it and take best advantage of it to pursue your investigations or queries. Engaging with new markets may always remain a daunting prospect as we enter an increasingly globalised marketplace that has come to define the 21st century. So please use Global Opportunity as a valuable reference to ensure your position at the forefront of Britain’s continued success in an unrivalled era of technological, economic and cultural connectivity.

Sarah Cartledge Editor, Global Opportunity 2015

Through specifically selected case studies, there is a provision of advice available.’

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Exporting the UK’s bank of knowledge

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009 Foreword:- Identifying the Global Opportunity Patricia Hewitt, Chair of the UK India Business Council Former Secretary of State for Trade and Industry

Contents

003 Editor’s Letter

010 O verview:- British Expertise International: Stronger together? Membership-based organisations offer a creative platform for networking and information-sharing, says Tracey Smith, Chief Executive, British Expertise International

012 Overview: Healthcare UK:- Healthy options The NHS’s unique expertise can help revolutionise healthcare systems across the globe, says Howard Lyons, Managing Director of Healthcare UK

018 Overview: RIBA:- Architectural resilience Social and environmental issues are as important as design in the world of architecture today, says Jane Duncan, President RIBA

020 Barclays:- Springboard to global trade Whilst global markets offer tantalising opportunities to upscale your business and sales, you must first ensure you have done your homework. The good news is that help is at hand, says Russell Grazier, Barclays Regional Head, Trade & Working Capital, London

024 Barclays:- Five routes to exporting Barclays reveals five top strategies for businesses with aspirations to succeed in global markets

028 DWF:- Migrant crisis The migrant rescue issues are probably some of the most complex and worrying for decades, says Jonathan Moss. Head of Transport Sector, DWF

033 Middle East Association:- Changing direction Opening up the Middle East markets is all about sharing information, networking and understanding who you’re dealing with, says Peter Meyer, Chief Executive of the Middle East Association

039 U K India Business Council:- An unbeatable combination There is robust trade and investment between India and the UK and now is the time to seize the opportunity, says Richard Heald, CEO of the UK India Business Council (UKIBC)

044 Interview: Dr Frank-Jürgen Richter:- Global vision Informed and candid dialogue about the different approaches to economic growth by countries such as China is the best way to achieve greater global integration, says Horasis founder Dr Frank-Ju¨rgen Richter

048 Business Council for Africa:- Africa’s next move Africa is not one homogeneous mass, but a combination of 54 sovereign states, with the result that each of these countries has its own blueprint for economic success and its own strategy for attracting foreign investment, says Karen Taylor CEO Business Council For Africa

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052 China-Britain Business Council: China calling The UK must be sensitive to the shifting internal dynamics of the Chinese economy if we are to continue to take advantage of the the Chinese opportunity, says Stephen Phillips, Chief Executive at the China-Britain Business Council

056 Infrastructure: Siemens:- Weather Resistant City residents and businesses rely on intelligent infrastructure systems. But new thinking is needed to create resilient cities, says Michael Stevns, Partnership Manager, Centre of Competence Cities, Siemens, UK

058 Infrastructure: WYG:- Challenging environments The remote location of mountain villages in Nepal proved a real challenge for organisations working on rebuild projects after 2015’s devastating earthquakes, so a solution was found close to home, says Glyn Utting, International Project Manager at WYG

062 M et Office:- Collaborating for Resilience and Prosperity The changing climate is adding to the demands on our fragile planet and increasing the risk of extreme and dangerous weather. Floods, droughts and storms are putting pressures on lives and livelihoods, agriculture production and economic performance

064 I nfrastructure: Arcadis:- Qatar emerges as built asset wealth world leader per capita Qataris replace Singaporeans as the richest built asset population, with a built asset wealth of US$ 198,000 per capita, says Alan Richell, Head of Business Advisory in the Middle East at Arcadis

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Global Opportunity 2015

Contents

Supported by

066 Infrastructure: Vector Consultants:- Culture club From building a government to helping with baggage, Alan Stevens of Vector Consultants believes understanding the people and identity of an organisation can be crucial to its success

068 Transport: Atkins:- Creating better journeys Technology and data will help us improve transport systems and create seamless end to end journeys, says Graham Bolton, Aviation Director, Atkins

072 T ransport: British Aviation Group:Airport expansion The demand for global airport infrastructure is rapidly expanding and requires consistent upgrading to correlate to the speed of current technological progress. So there have never been more opportunities for UK expansion of capabilities and services, says Chris Chalk, Chairman at the British Aviation Group (BAG)

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Contents

Global Opportunity 2015

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Contents

096 tangerine:- Transforming customer experience Appealing to customers’ emotions and understanding their desires is key to transforming their experience, say Martin Darbyshire, CEO and Matt Round, Creative Director, tangerine

104 Architecture: RIBA Stirling Prize 1996-2015 As Burntwood School wins the Stirling Prize, Tony Chapman Hon FRIBA looks back over two decades of prize winners

111 Architecture: Working with an architect Architects are highly skilled and professionally trained to turn your aspirations into reality

114 A rchitecture: Public-Private Partnerships:Setting the world straight on PPPs John Davie explains why PPPs are so misunderstood, and why he was compelled to share his knowledge in The PPP Book, Public Private Partnerships Unbundled

120 Retail: Tesco:- Global partnerships F&F, Tesco’s hugely successful clothing range, aims to export its products and reputation for great quality, affordable fashion by opening franchise opportunities with retail partners in new countries, says Richard Price, CEO of F&F PORTRAIT BY MARY MCCARTNEY

122 Retail: Tesco:- Wholesale success Tesco’s wholesale business may be in its infancy, but the retail giant’s experience in product development and supply chain capability means Tesco branded products are flying off the shelves in overseas supermarkets, says Matt Simister, Commercial Director, Fresh Food and Commodities, Tesco

077 T ransport: Railway Industry Association:Tracks to success Neil Walker, International Development Director at the Railway Industry Association, explains why British companies are in demand for new rail projects around the world

082 Transport: BOXARRTM :- Simplifying the complex BOXARR™ software allows sophisticated interdependent systems to integrate seamlessly, say CEO Alasdair Pettigrew, and Dr Robert Smith, Chief Scientific Officer

126 Retail: Marks & Spencer:- Looking behind the label As part of Marks and Spencer’s global strategy to ensure a greater brand accessibility to more customers around the world Venu Nair, Managing Director of their Indian operations, talks to Global Opportunity about M&S’s position within India, the consumer dynamics shared between the UK and India and the importance of corporate responsibility while operating in the world’s largest democracy

130 Retail: Red Ant:- Consumer powered 086 Transport: G4S:- Top Flight G4S has been recognised as the top airport security provider in the prestigious Emerging Markets Airports Awards, reflecting our strong presence in the Middle East region, says David Stockton, Chief Executive Officer of G4S UAE

088 U niversities UK International Unit:What can we teach the world? The UK university sector is one of the best in the world – according to a wide range of international indicators. Our universities have a well-deserved reputation for quality, underpinned by a robust quality assurance system, says Vivienne Stern, Director of the International Unit at Universities UK

094 S port: Arena Group:- Spectator first for major sports events Creating the right atmosphere at sporting events not only affects ticket sales but impacts the athlete’s experience, as well as tv, media and sponsorship, says James Anderson, Commercial Director UK & Europe at Arena Group

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Embracing technology is vital if retailers are to keep up with the competition. Connected customer experience is a must, says Dan Mortimer, CEO Red Ant

132 Retail: Innseco:- Communicating value Brand awareness and market perceptions are crucial to any major property and retail project’s success. Expert marketing agency Innesco utilises the full power of brand, marketing and communication to add considerable value to such projects across the region, says founder and MD Dan Innes

134 UK-ASEAN Business Council:- Roaring into life An unrivalled economic diversity and impressive commercial dynamism are key to South East Asia’s economic growth. UK companies must remain ahead of the curve to take full advantage says Ross Hunter, Executive Director at the UKASEAN Business Council

138 Last Word:- Scaling up Africa needs to see strong growth across the sectors that most impact citizenry, says media professional Lanre Akinola

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Patricia Hewitt

Identifying the Global Opportunity Britain’s global outlook and our desire to create global opportunities has defined not just the course of British history, but much of world history. Along the way, we have defined many of the international rules, norms, market and even some of the very opportunities that this publication now seeks to guide you through. This global outlook is key. It is why British companies can be found in every corner of every market across the globe. It is at the heart of our economic success, our competitive edge, the diversity of our nation, our place in the world, the appeal of our institutions, our extensive soft power - and even the food we eat. I believe it is also what will continue to ensure that British products, services and brands remain prized and sought after the world over. Just look at Spectre, the latest, record-breaking instalment of the James Bond saga, to see these elements at play. Produced in the UK by a British production company, starring many of Britain’s leading actors and packed with iconic British brands, the film has been an international success, demonstrating once again the global appeal of Britain’s creative industries. The UK Government has set the hugely ambitious target of raising the value of the UK’s exports to £1trn by 2020. I am confident British companies can do it. But, of course, if this target is to be hit, it will require more firms, especially SMEs, to follow the lead of international trailblazers such as Tesco, G4S, the Royal Institute of British Architects, Atkins, and Red Ant. Whether these companies are manufacturers, designers, professional services firms, film makers or food brands, their unique expertise and capabilities mean they are in demand across the globe, and across sectors. You can see the opportunities in high-growth markets like India where a rapidly growing consumer class is driving an unprecedented surge in domestic demand for British consumer and luxury goods - but also in developed economies such as my native Australia where the mining and resource boom of the last decade is giving way to a service industry that provides new opportunities for Britain’s world class professional, legal, and financial expertise. As Secretary of State for Trade and Industry

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Foreword

and MP for Leicester West, a community heavily influenced by this global mindset, and now as Chair of the UK India Business Council, I’ve seen firsthand the ability of British companies to look across the world, finding new opportunities, partnering with local entrepreneurs and firms, adapting their products - and their mindset - to new markets. Contributing to growth, jobs and well-being wherever they are, and contributing to prosperity here in Britain too. However, we must do more to encourage British companies to take the leap into international markets and that is where Global Opportunity, and of course the UK India Business Council, comes in. This publication will show you the opportunities in each sector and examine emerging markets like India, where you will see the greatest opportunity for growth, the factors and policy changes that will create new and exciting opportunities, and crucially how your company can join the many British companies succeeding around the globe.

Patricia Hewitt Chair of the UK India Business Council Former Secretary of State for Trade and Industry

This global outlook is key. It is why British companies can be found in every corner of every market across the globe.’

Issue 02

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Membership-based organisations offer a creative platform for networking and information-sharing, says Tracey Smith, Chief Executive, British Expertise International

British Expertise International

Stronger together?

n The Wealth of Nations, Adam Smith famously remarked, “People of the same trade seldom meet together, even for merriment and diversion… the conversation ends in a conspiracy against the public, or in some contrivance to raise prices”. Indeed, we might even speculate that companies with different sectoral interests in the same markets or regions may simply desire to meet with each other to conspire to manipulate those markets to support their insatiable drive for profit in their own fields. Furthermore, you can often encounter the perception that membership-based organisations are simply old-boys clubs, where the great and the good pontificate about times past in a manner of little interest to the contemporary businessperson. Are trade associations, membership bodies or business development networks really nefarious self-interested cartels that work against the common or corporate good? From our perspective here at British Expertise International, this could not be further from the truth. Membership-based organisations hold a special position in the international business development landscape. Organisations like ours can be proactive, forward-looking and can play a unique role in helping international business support the well-being of as many people as possible as they undertake truly

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transformational projects the world over. It has been very encouraging to see UK Trade & Investment (UKTI) develop the Trade Challenge Partners scheme, which is intended to bring a greater diversity of organisations into partnership and delivery relationships with the UK Government as it seeks to grow British exports. The core of our membership is formed by the very best of the UK’s international consultancy sector; from leading global engineering firms and development consultancies to world-leading individual specialists. More than half-a-million individual employees are part of the British Expertise International family around the world. Whilst member companies naturally join our organisation to improve their access to market intelligence, business opportunities and to build new networks of contacts, they also care. People and companies who care, but also have unique skills and experience, are a vital asset to the global economy. Our member companies are regularly at the forefront of supporting social and economic transformation

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British Expertise International wider network that can undertake unique activities with partners across the public and private sector. Through our working groups and training initiatives, our members have worked together to highlight and share the very best of UK skills and expertise with international partners. Our ability to reach out to governments, NGOs and the international private sector on an institutional level, allows us to create unique opportunities for our members and also provides a coherent point of access and resource for UK expertise for international partners.

Collaboration

in developing markets. Everyday their work internationally is improving business environments, rebalancing the relationship between the public and private sector and fighting corruption. As a member of British Expertise International, our members not only gain access to the programme of events, seminars and trade missions that one traditionally expects from a membership organisation or a trade association, but you become part of a

TRACEY SMITH Tracey Smith is the Chief Executive of British Expertise International, having previously held the positions of Director of Operations in 2012 and the Director of Marketing, Membership and Strategy in 2009. Tracey has worked with the management team in reviewing the performance of the organisation, building the membership services and events programmes and has helped in developing deeper relations with UKTI, the FCO and other trade associations. With her global experience, Tracey is an international business development professional with experience working across the GCC, the US and Western Europe in a number of B2B sectors.

Being a member of an organisation is not just about the access and opportunities that the collective brand or activity programme can bring to an individual company, but also the internal networking that can occur between members. As a consequence of the close relationships and understanding of the individual strengths of member companies that can be developed through being part of British Expertise International, our members regularly collaborate on projects the world over. The annual British Expertise International Awards (BEIA) continues to demonstrate the value of being part of wider group or collective of professionals, as it serves to provide peer-accessed mark of quality for individual member companies’ projects. Since relaunching our awards nearly four years ago, the whole team always remarks how much the companies truly value their entries to the BEIA, the faces of joy or despair on our member’s faces on the Awards night really show how much the considered assessment of your professional peers can mean. There is a huge diversity of membership-based organisations; from the geographically-focused bodies such as China-Britain Business Council, The Business Council for Africa and the Middle East Association to the sector specialists at the Royal Institute of British Architects and the Energy Industries Council. They may be privately owned companies, member-owned not-for profits or traditional trade association. Each of them will have their own unique way of working and their own unique programme of activities built through longstanding relationships with member companies. What unites them is the concept of membership of a collective body. At British Expertise International we believe that this membership relationship is not a passive one, but is two-way and creative. Membership can be a platform to lead initiatives that could not be done in the same way by an individual company. This collaborative approach ensures that our networks are vibrant and provide intelligence and activities that truly serve the interests of our members. Our members play a leading role in the development and delivery of our activities; we never forget that they are the “experts” in British Expertise International. If you are a member of any professional organisation, engage with it!

Further information www.britishexpertise.org

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Healthcare UK

Healthy options The NHSâ&#x20AC;&#x2122;s unique expertise can help revolutionise healthcare systems across the globe, says Howard Lyons, Managing Director of Healthcare UK

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With the NHS a leading beacon of UK excellence in healthcare provision, most famously showcased at the London 2012 Olympic Games, countries like China are looking to this globally recognised provider of public healthcare as a model to support its rapidly growing sectoral needs. However there was always the question how such countries could access the NHS and formulate agreements to share expertise. As the NHS looks to plug the gap in its own funding, it is exporting its expertise in research, clinical and administrative fields. Ideas, systems, products and research that have been incubated because of the unique way in which the NHS works can now help to revolutionise the healthcare offerings and systems of nations across the world, while at the same time benefitting the organisation that gave birth to it. As he steps down from the helm of Healthcare UK, Howard Lyons discusses the birth of Healthcare UK, its evolving remit and the manner in which the UK can access these opportunities in a rapidly changing market.

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In the three years since it was founded, Healthcare UK (Healthcare UK) has been responsible for over ÂŁ4.6bn in business wins for the UK. There are plans to increase its overseas footprint still further in the coming years, largely thanks to the global reputation of our healthcare system in the UK - the NHS. Howard Lyons has been at the helm of Healthcare UK from the start. Having spent nearly 40 years in management positions in both the public and private healthcare sectors before joining Healthcare UK as Managing Director in 2013, Howard Lyons is one of the few senior members of the UK healthcare industry who can offer real insight into the international opportunities available to both the UK private and public healthcare fields. Emerging healthcare markets such as China are expecting to grow at an average rate of 11.8 per cent and will reach roughly US$892bn by 2018.

| How has Healthcare UK progressed since its inception?

When Healthcare UK was conceived in 2012 there was a determination that the focus was to be on the priority markets of the emerging economies of China, India, Middle East and Brazil. However, there was no clear idea of the extent of the UK expertise and the requirements of these priority markets. Even before I started, we were working on the propositions to ensure we had collateral for the launch at Arab Health in January 2013. My appointed role was to identify the five areas where the UK was strongest and where the emerging economies would benefit. Having looked at the details of these priority areas, itʼs true to say that the areas of infrastructure, clinical services, education and training and digital health have all been very successful. Health systems’ development in terms of business wins has been less obvious, but due to its links with the NHS clients have been able to understand UK expertise in organising health services. As a result, we have far exceeded our initial targets of £350m in 2013 with £500m business wins in the second year and £650m in the third year, making a total of £1.5bn of total business won over a three year period. Weʼre currently up to £4.6bn since April 2013, which is equivalent to £1.5bn per year. We have far exceeded our expectations and weʼve refined our propositions and added examples and case studies which have taken on a life of their own. People are seeking us for aid in training in education, infrastructure, digital health and value Healthcare UK as the primary port for engaging in these areas. Consequently our journey over three years has culminated in Healthcare UK as the ‘go-toʼ place for UK companies in the private and public sector, as well as governments in our emerging economies ie China, India, Middle East and Latin America. How did Healthcare UK emerge?

Prior to Healthcare UK there was a department in UKTI for healthcare and life sciences, but it was lacking understanding and interest in Healthcare. Instead its main focus was centred on life sciences and particularly medical devices and medical technology. As such there wasnʼt an understanding within UKTI here or abroad about the different markets for the two sectors. Additionally in the Department of Health, there was an organisation called NHS Global which was established under a government initiative back in 2009 when the junior health minister, Lord Darzi, highlighted that the NHS was spending over £120bn a year and a return on this investment was greatly needed from its intellectual property, training and education expertise. Subsequently NHS Global was set up to try and promote UK healthcare but remained within the Department of Health (DH) with a relatively small team. However due to its location within this department, it didnʼt have the available reach or commercial focus that UKTI has. Consequently, with the support of DH and NHS England, the establishment of Healthcare UK has

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Healthcare UK

HOWARD LYONS Howard has over 30 years’ experience of public and private sector healthcare throughout the UK and in more than 65 countries worldwide, advising on health services management and strategic health sector reform. He spent the first ten years of his career working in the NHS as a senior manager in London Teaching Hospitals. Since leaving the NHS to work in international healthcare with major British companies, he has managed large hospitals in the Middle East and undertaken a wide range of consulting assignments for public and private sector clients as well as for some of the leading development agencies such as the World Bank, Department for International Development, InterAmerican Development Bank and the United Nations.

brought an expertise in Healthcare in UKTI. With posts across the globe from our FCO and UKTI embassy offices, we are able to get the message of UK expertise to all of our current and potential clients. Prior to this, DH and NHS Global were not able to achieve this to the same degree. How important to overseas customers is the NHS brand?

The NHS brand is extremely significant. When the agreement to establish Healthcare UK was formulated in April 2012 by Lord Howe and Lord Greene and prior to its launch at Arab Health in 2013, the UK was about to host the 2012 Olympic Games. During the opening ceremony there was huge emphasis placed on the NHS, which is one of Britain’s proudest achievements; not only were the doctors, patients and nurses of Great Ormond Street jumping on beds, but the NHS logo was placed front and centre during proceedings. The response to this was incredible. Olympic hosts China (2008) and Brazil (2016) suddenly became extremely aware of the NHS and increasingly questioned how they could benefit from its expertise. I recall travelling to Abu Dhabi in 2005 with a group of UK organisations to create partnerships between Health Authority Abu Dhabi, Abu Dhabi generally and the UK. However there was always the question how such countries could access the NHS and formulate agreements to share expertise. Consequently the combination of the NHS as highlighted during the Olympics and the establishment of Healthcare UK increasingly brought the NHS’s capabilities to the fore. As we are a government organisation and we work between governments, people at every location we visited wanted to talk to Healthcare UK as they viewed us as a solid route into the NHS. Whatʼs been the biggest surprise?

China. I first went to China in 1978 when I received a scholarship to go and study their health system. Whilst in some respects it was very behind the West, in other areas like primary care, their system was

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Healthcare UK

UK, we want to understand how you operate successfully and anticipate the challenges you have overcome. Consequently from this period in 2014, we generated over £2.5bn worth of contract wins in healthcare on the back of those visits.

more advanced. They had a way of engaging with citizens at a community level to assess and deal with their healthcare needs where they lived. However the quality of their hospitals was extremely poor. Having been back on a regular basis and particularly since the Olympic Games, China has opened up and become a force for innovation and development, as witnessed in their rapid expansion of their airports and railways. This has translated into their hospitals as well. During the Maoist era of China, the tradition of ‘barefootʼ doctors was very prevalent. Although fairly rudimentary, it provided care to the rural communities. With their strong relationship to China in the 1980s, Tanzania actually introduced barefoot doctors. However, having scrapped these barefoot doctors during the 1980s, Chinese hospitals are now looking for support on how they deliver higher levels of care. Currently 98% of care in China is delivered in acute hospitals. In the UK, 90% of healthcare is delivered at a primary care or community level. The Chinese are asking who does it right and consequently look to the UK. They have been courted by developed nations such as Australia and the US, but decided after a period of reflection that they would gain most benefit from the NHS system. Therefore Chinese rhetoric around healthcare remains the same - we want to learn from the

How has the sector changed globally?

A major change has been a move from infectious diseases to non-communicable diseases. Currently we have a greater ability to prolong life but this has created challenges in itself. For example, the populations of the West are characterised more by ageing populations with this trend accentuated in China with its large cohort of people over 60. Additionally, over the past 40 years the medical advances have been phenomenal with MRI, the CT scan and the genome project proving revolutionary. Combining these advances within our globalised and interconnected world means populations demand these machines everywhere, and so the demand for healthcare steadily increases. People have access to information in their pockets that was unattainable only 30 years ago. Examples include personal access to the entire British Library on your smartphone or the ability to monitor your blood pressure. Therefore the exponential rise of the smart phone has changed the healthcare sector beyond all recognition. This advancement of digital health is becoming increasingly popular among general practitioners. In addition to access to your medical history, they may have protocols about your treatment, ie your symptoms may be flagged if you have two or more and clinicians must therefore delve deeper into their causes. This avoids them giving the diagnosis that they may have just read about in the BMJ or through their ongoing learning in teaching hospitals. Are we exporting these digital advances to the rest of the world?

NICE (National Institute for Health and Care Excellence) and NHS Choices (both of which are the top hit healthcare sites in North America) are funded by the government and are available both in UK and globally. Subsequently Healthcare UK strives to commercialise this global reach. NICE has therefore established the protocols that doctors should follow for any particular condition and will work it out in detail; this is the most published aspect of their work. The other side of the coin looks into the effectiveness of different drugs, asking whether they are effective in terms of their cost and what they can achieve. NHS Choices in Saudi Arabia attracts significant traffic, showing that other states certainly value the UK’s phenomenal expertise. Has the healthcare sector become global only recently? IMAGE: WWW.SHUTTERSTOCK.COM

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In a similar light to the unifying of nations in the United Nations, the healthcare sector has been global since the establishment of the World Health Organisation (WHO) in 1948. The WHO is designed for all nations to share their knowledge and expertise in this field.

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Healthcare UK

plans that would encourage acute hospitals and non-acute community hospitals to engage in the international sector. Weʼve generated about £280m of business wins for the NHS over this period of time, which was £280m more than they would have received from the government. My vision is to see every NHS trust or body engaging internationally within 10 years. In the 1980s I was involved in developing income generation projects for the NHS as a result of examining how BAA was making our airports commercially viable entities. We subsequently saw opportunities for increasing income generation within the healthcare sector. Whether that was introducing car parking charges or selling excess land to a supermarket, we helped them evolve a more commercialised mindset to ultimately benefit their hospitals and the patients they serve. IMAGE: WWW.SHUTTERSTOCK.COM

Is the perception of a recently globalised era of healthcare present due to the emergence of Healthcare UK and the increased awareness of commercial opportunities?

The private sector has always enjoyed great opportunity. However private companies that service the NHS may have been reluctant to look overseas because they have a market already on their doorstep – American companies stay in the US because they have a readily available and extremely large market. Nowadays we realise we have expertise that others value, so while we feel we are in a position to confidently share this knowledge, we also feel we should be equally rewarded. Part of my role at Healthcare UK is to illustrate to NHS organisations that they have a skillset they can monetise without impacting on the quality of care that they give at home, if they go about it the right way. Whilst arguably the NHS is not very skilled at exporting its products and services overseas, they can, through working with the private sector who are skilled in this commercial aspect, provide the expertise of the NHS to our key markets. Have NHS organisations woken up to these opportunities?

NHS Global continued to exist prior to the emergence of NHS England and during the reshuffle in April 2013 of the Department of Health and NHS England. Four facets remained in NHS England: philanthropic imperatives, building the capacity of the NHS, responding to lower value opportunities in non-priority markets and protecting the NHS brand. It was decided that the NHS Global funding should be transferred to us with the specific mandate to develop the capacity of the NHS which was a significant change. As a result we have had resources to engage with NHS trusts and formulate

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How readily have NHS hospitals and trusts taken to overseas opportunities?

Prior to the last election, we produced a booklet about helping NHS organisations export overseas. However due the large sensitivities associated with this topic, we held back publication until after the election. Although the brakes werenʼt totally released after the election, people like the Minister for Life Sciences George Freeman remain great advocates for innovation and growth in our sector. An entrepreneur by background, George is a fantastic asset – he understands life sciences extremely well. Regardless, this idea has not taken off as quickly as Iʼd hoped, primarily down to the financial crises that face the NHS, arguably the most difficult period it has ever faced. You leave in February. Where do you see the organisation going?

Iʼm hopeful that weʼll be able to get very strong leadership to take this forward. Certainly with George Freeman we now have a minister who is very well regarded and will, at the highest levels, promote healthcare and life sciences. In terms of the next 3-4 years, I hope we can achieve £5bn a year with an increasing role of NHS trusts and bodies contributing to this figure. At the moment their income is relatively small but for the investment they make, they enjoy an extremely healthy return. The UK is extremely good at fields such as genomics and digital health, where Healthcare UK hopes to commercialise further on business opportunities. We have invested some substantial amount of money in these areas, and business will grow over the next 3-4 years as we take this expertise to the market in the way that the NHS itself has not been able to do.

Further information www.gov.uk/healthcareuk

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RIBA

| Architectural resilience Social and environmental issues are as important as design in the world of architecture today, says Jane Duncan, President RIBA

s part of our commitment to demonstrate the social and environmental value of architecture, in 2015 the Royal Institute of British Architects (RIBA) became a signatory to the United Nations Global Compact (UNGC) and has undertaken to support and promote its ten principles covering human rights, labour standards, the environment and anticorruption. Joining the UNGC network is part of the RIBA’s increased focus on ethics which has, amongst many other activities, recently included co-founding a new international coalition to develop the first set of globally-recognised ethics standards for real-estate and related professional organisations, working to promote diversity and inclusion within the profession of architecture, and encouraging best practice in sustainability and environmental management. In addition to signing up to the UNGC, RIBA has committed to a six-point action plan to directly support its principles. RIBA will: 1. Provide a forum for the debate of the universal principles enshrined in the UN Global Compact as they apply to the practice of architecture, in particular in relation to health, safety and welfare, diversity and inclusion, and environmental sustainability 2. Encourage and support RIBA Chartered Practices in addressing the universal principles of the UN Global Compact as a strategic issue at board/management level

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3. Facilitate access to tools and guidance that can assist architects in responding to ethical issues that are beyond the scope of legal and/or code of conduct definitions 4. Encourage Chartered Practices to use their influence to promote the principles of the UN Global Compact throughout their construction project supply chains 5. Collaborate with other professional organisations to review professional codes of conduct 6. Commit to continuously improve the social and environmental impacts of the RIBA. Supporting the public announcement of the RIBA’s activities in this area, RIBA President Jane Duncan said: “As our profession changes and becomes increasingly international, so must our approach to developing and reinforcing professional ethics. Architecture has a direct impact on societies and economies; it shapes and influences the world we live in. For this reason, we architects have a duty to uphold the highest standards wherever we practice. I am delighted that RIBA has signed the UN Global Compact and undertaken to support and promote its principles.”

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| Details of the work undertaken by the RIBA in this area can be found in our annual report to the UN, highlighting our activities to meet the core principles. A copy of its latest report can be found on the RIBA website. www.architecture.com Some of the activities we are undertaking in support of our six point action plan including:

Equality, Diversity and Inclusion Architecture is becoming an increasingly inclusive profession, one that offers rich possibilities for a wide range of talented individuals. The RIBA is committed to promoting equality, diversity and inclusion in architecture and the broader industry and it comes with no surprise that those companies who are most inclusive are also the most successful. Innovation, talent and creativity thrive in diverse, well-led teams. Inclusive practices have the ability to encourage architecture that fully reflects the society we serve. If you have a diverse, loyal, and innovative team, they will be productive highperformers who deliver great work and ultimately increase your company’s business. The RIBA Role Model Project shows how 12 individuals have been able to forge careers within architecture. In doing so they send a message to others who may share one or more aspects of their identity – such as gender, background, ethnicity, disability, sexual orientation or education – that this could be a profession where they might thrive. https://www.architecture.com/Explore/ RIBARoleModels/RIBARoleModels.aspx

Designing City Resilience On the wider front the RIBA is working hard to look at the increasingly important issues around sustainability, environmental issues and the changes in global society. All over the world both developed and developing cities are experiencing change either brought on by climate change, rapid urbanization and unexpected events, and a city’s resilience

JANE DUNCAN Jane Duncan is RIBA President (2015-2017), and is Director of Jane Duncan Architects, an award-winning practice of 16 architects and interior designers based in Buckinghamshire. Established in 1992, Jane Duncan Architects undertakes a mixture of high-end residential, sports and leisure, commercial and community projects. These vary from sustainable contemporary to traditional and listed buildings. Trained at the Bartlett UCL, Jane set up in practice almost immediately after qualifying. She has been a small practice champion at RIBA, and was 6 years Vice President Practice. Since 2013 she has also been the RIBA’s Equality and Diversity champion. Jane lives in a hemp eco house designed for her family over 5 years ago, and has two children with husband Ian, who recently joined JDA as practice manager.

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RIBA

relies on its ability to respond and adapt to such challenges.This issue affects existing cities in the developed world as much as it does the developing world. It was with that in mind the Designing City Resilience programme was launched, with a two-day summit, at the RIBA in London in June 2015. Designed to be an independent platform for stakeholders the two day event was a mix of rich discussion on the key elements that make up a city’s resilience with the aim to help shape the resilience agenda & dialogue, form policy, advocacy and mobilise resources to create better, more liveable, resilient cities. The Designing City Resilience, event bought together l An audience of over 250 delegates from 29 countries l 16 sessions across 2 days enabling attendees to learn, share, collaborate and participate with resilience experts drawn from all over the world. l 36 international speakers, drawn from the worlds of design & construction; development & infrastructure; city leadership & governance; insurance & finance; and technology & communications l 11 international cities feeding into the City Resilience Challenge – Austin, Barcelona, Bristol, Chennai, Glasgow, Manchester, Melbourne, New York, Rio de Janeiro, Rotterdam and Vejle. With the success of the summit we see the discussions and output from the two days and the workshops as the catalyst for future multi-media dialogue designed to: share ideas; create strategies and to recommend and implement meaningful principles to make better cities capable of coping with the stresses of mass urbanisation, climate change and unexpected shocks to the system.

Climate change The RIBA’s sustainable futures group is an active advocate of design and construction of environmentally sustainable buildings and a source of knowledge and expertise. Therefore we sent an RIBA representative to the ‘Architecture, the Climate of the Future’ international conference that took place in Paris on 30 November, prior to the main COP21 activities. The conference was in collaboration with UIA and ACE (of which RIBA is a member) and the CNOA and CIAF. The RIBA recognises its national and international status and responsibility under its charter to acquire and share the latest thinking about the challenges facing the built environment in the 21st century, and to take action where possible to meet those challenges by harnessing the knowledge and skill of its members.

Further information Find out more and see the activities planned for 2016 by visiting www.designingcityresilience.com.

Issue 02

| Global Opportunity 2015

Barclays

Whilst global markets offer tantalising opportunities to upscale your business and sales, you must first ensure you have done your homework. The good news is that help is at hand, says Russell Grazier, Barclays Regional Head, Trade & Working Capital, London

Springboard to global trade

ntering into international trade could potentially help you to access a larger customer base and expand sales of your products and services in a way that is not possible by focusing on the UK alone. However, it is important not to underestimate the risks that come with these opportunities. To succeed in overseas markets, your business must have a robust and informed trading strategy, the right management team and the operational capacity in place. You can help to ensure you are ready to make the most of opportunities by tapping into the UK Governmentâ&#x20AC;&#x2122;s support programmes, and drawing on the funding and risk-management expertise of your bank. In-depth market research and due diligence processes are also essential when dealing with contacts you have never met in unfamiliar jurisdictions. A recent report by the British Chambers of Commerce[1] shows that many businesses are reactive exporters. Taking up an unsolicited order from an overseas buyer may appear to be tempting, but rushing into a sale could cost your business dearly, as one manufacturer discovered. When a UK-based fencing materials producer received an unexpected international online order, it seemed like an ideal opportunity to grow their

Global Opportunity 2015

| Issue 02

business in new markets. The manufacturer was contacted directly online by a US-based company and decided to fulfil the order without fully considering all issues and risks involved. What followed were considerable shipping and logistical difficulties, which proved to be a considerable challenge for the company. Fortunately, with expert support, the business was able to recover and went on to successfully build an export division, which increased sales by 50% over the next two years.

Finding overseas opportunities The UK Government has stated its commitment to helping small-to-medium enterprises (SMEs) and large-to-medium-sized businesses tap into exporting and importing potential. Its agencies, such as UKTI, provide a range of programmes designed to facilitate successful entry into overseas markets. One of the initiatives available to businesses is the High Value Opportunities (HVO) Programme, which helps companies gain direct access to large projects around the globe, offering opportunities to both SMEs and larger enterprises. UK businesses are eligible to tender for part of, or even whole, projects. Barclays works alongside UKTI to help clients develop the right exporting strategy for their business. The Bankâ&#x20AC;&#x2122;s input ranges from assessing risk and ensuring a business has adequate working capital through to discussing the negotiation of appropriate trading terms. UKTI offers guidance at

global-opportunity.co.uk

Barclays

Businesses set criteria for the sector and types of tenders or opportunities of interest, and receive regular alerts highlighting high-potential contracts that match their capabilities.

Commerce at a click With UK retail exports expected to reach £60 billion by 2018 , the UKTI’s e-Exporting Programme focuses on making sure UK businesses take full advantage of the online marketplace. Barclays is keen to help ensure businesses maximise the opportunities provided through the digital market place and seeks to promote the e-Exporting programme to businesses which may benefit from it. Recognising that selling online also has its risks and practical difficulties, UKTI has identified over 400 e-marketplaces. The challenge for businesses is to filter the gamut of opportunities worth pursuing and UKTI is well-placed to help businesses form a robust digital commerce strategy.

Preparing for change

all stages of the trading process and can provide access to wider government support. Both UKTI and Barclays can also provide access to advice from UK Export Finance. UKEF is the UK’s Export Credit Agency, providing a range of financial products to support exporters.

The British Chambers of Commerce[1] survey shows that a lack of commercial knowledge is leaving many businesses with untapped opportunities. It highlights that 68% of companies with the potential to become successful exporters believe they are held back by not having the right product or service for international markets. Having better data and analysis can shine the spotlight on opportunities which are not immediately obvious. We work closely with UKTI and UKEF to give you access to the expertise you need. By doing your research and having a comprehensive plan in place, you will be in a much better position to identify and act on any overseas opportunities.

Alert to opportunities

Managing risk

Another UKTI offering aimed at helping British companies succeed overseas is the Business Opportunities Programme. This offers a free alerts service for companies looking for relevant sales leads.

Having made a commitment to overseas trade, management teams need to identify and mitigate risk at every stage of the export cycle. Involving your bank early in the process means you can assess your capabilities and finances, and identify where you may need support in delivering your trade strategy. From a banking perspective, the two biggest concerns are usually about mitigating risk and financing increased working capital requirements. During the supply or purchasing stage, a business needs to reduce the risks associated with supplier performance and related costs. As a business agrees terms for the overseas sale of their end product, their attention turns towards ensuring they get paid. Payment in advance is ideal as you get paid (either partially or wholly) before goods are dispatched. However, this is not easy to negotiate as it means the buyer takes on all the risk. An often-used option to protect exporters against the risk of non-payment is a letter of credit (LoC), which is a conditional guarantee that you’ll get paid as long as you meet the terms of the LoC. This LoC provides the exporter with a conditional guarantee

RUSSELL GRAZIER Russell Grazier has been in banking for 30 years. His career has encompassed roles in Retail, Operations and Corporate Banking as well as Risk Management. Since the late 1990’s Russ has been focused on leading regional and national trade businesses within the banking industry. As Barclays Head of Trade and Working Capital for the London Region, Russ is passionate about supporting British businesses to be successful whether that’s here in the UK or when operating overseas. His commitments are to help simplify international trade, mitigate risk and provide appropriate working capital solutions for businesses.

global-opportunity.co.uk

Issue 02

| Global Opportunity 2015

Barclays

The trade cycle: which product and when?

Barclays

of payment from the buyer’s bankers. An LoC can make doing business more appealing to exporters and end buyers by providing both parties with confidence: for the exporter that they will receive payment promptly; and for the buyer that they will receive the goods and services ordered. Alternatively, a documentary collection may be used in place of the LoC, where the exporter’s bank liaises with the buyer’s bank to arrange payment. It gives the exporter a greater level of control over the goods until payment, or guarantee of payment, is received from the buyer. This allows for more confidence in trading and a better overview of cashflow.

Flow of funds Trading overseas requires accounting for longer timeframes. In the UK, a typical trade cycle could be between 30-90 days, but when exporting this can increase to as much as 120-240 days or even longer. A trade loan is one solution that could help a business with its cashflow needs, as it can be used

GLOBAL SUPPORT, LOCAL EXPERTISE Deciding to aim for new markets outside of the UK is the easy part. More challenging is ensuring that your business structure and management team are ready and that you have the information you need. Any company heading down this route should undertake thorough research to find out if exporting is a viable option for their business, and if it is the right time for their organisation. At Barclays, we work closely with UKTI and UK Export Finance, to ensure our clients tap into the expertise and support on offer, so they can make a successful move into global trade.

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to bridge the gap between payment to your suppliers and the receipt of sales proceeds from your end buyers. As a manufacturer, for example, a trade loan can be used to offset the period of time where you have paid your raw material suppliers and made your product, but are still awaiting payment for a sale. This means that you will have the finance available to continue production and fulfill your other orders. Open account trading represents 80% of world trade[3] , where payment is made upon the presentation of an invoice following delivery of the goods or services. However, it comes with a risk of non-payment, particularly when dealing with a new client in an unfamiliar country or market. Most commonly used when an established relationship has developed with a buyer or a raw materials supplier, open account trading allows a business to offer credit to its customer, thereby paving the way for increased sales and negotiation of higher sales prices. Depending on the terms negotiated, Barclays has banking products and services available to protect your business and to help ensure that you make a success of your overseas trading.

For more information please call: 0800 015 4242* *Lines are open Monday to Friday, 8am to 6pm. To maintain a quality service we may monitor or record phone calls. British Chambers of Commerce 2014 annual trade survey ‘The Engine of Growth’ - www.britishchambers.org.uk/2014%20 Int%20trade%20survey_Market%20opps%20and%20barriers%20 report.pdf [2] International Omni Retailing Markets Association (IORMA), 2014 – ‘Going Global through e-Exporting’ – http://www.iorma.com/reports/ going-global-through-e-exporting [3] * Working Capital & Trade Solutions, 2015 - www.barclays.pk/ corporate/corporate-solutions/capital-trade-solutions/index.html [1]

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Barclays

Five routes to exporting Barclays reveals five top strategies for businesses with aspirations to succeed in global markets

or a business that is ready to grow, exporting offers a chance to find new markets and new customers on a much larger scale. It allows you to take advantage of benefits you can’t find at home, such as lower costs of production and economies of scale. The expertise and finance required to make that first move into overseas markets can seem daunting. As the industry saying goes, “An export isn’t an export until you’ve been paid”. But there is plenty of support available to help you put the right foundations in place.

UK GLOBAL TRADE: VITAL STATISTICS Value to UK economy [1] l Exports in 2014 = £508 billion 41.8% of UK medium businesses engage in exporting[2] Exporting – benefits[3] l 55% see increase in profitability in first 12 mths l 61% see increase in sales within 12 mths Exporting – challenges[3] l Not having the right product or service (68%) l Finding customers, agents or distributors (78%) l Size of overseas market for product/service (65%) l Financial resources and access to finance (64%) l Export information and support services (62%) l Competition in overseas markets (61%) l Production/sourcing capabilities to meet demand (57%) Export or not to export?[3] l One in five medium/large firms say financial resources are ‘highly influential’ when deciding if, where and when to export l 2 2% are adapting products/services to specifically target overseas customers l 91% would consider Europe

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Get ready, go

Timing and preparation is crucial. It is important that you assess whether your business has the resources and capacity to take on the increased workload and complexity that invariably comes with trading overseas. Preparing to move up a gear by selling goods and services abroad is an intensive process and should not be underestimated. Whilst there are clear benefits to selling into overseas markets, such as growth and diversification of sales, as well as a potential increase in sales prices, be wary of concentrating on overseas markets at the expense of your UK operations. From the inception of your international strategy Barclays is able to provide help and will signpost you to the professionals and external agencies dedicated to supporting UK Exporters. Barclays works in close liaison with UK Government agencies, such as UK Trade & Investment (UKTI) and UK Export Finance (UKEF) in order to guide exporters along the right path early in the process. When you find a new trading partner and reach the important contract negotiation stage, we can also provide guidance on how to structure payment terms in a way that can help you to mitigate the risk of non-payment. Questions to ask when deciding whether your business is ready for international trade include: l Is your management team committed to trading overseas? l Does the leadership team have the capacity, or bandwidth, to step away from day-to-day operations and focus on an exporting strategy? l Have there been in-depth discussions about the challenges?

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Find the right partners

Exporting means you need to find the right trading partners in the right countries. You can make this process easier by working with a UK Government agency such as UKTI. For example, UKTIâ&#x20AC;&#x2122;s Overseas Market Introduction Service (OMIS) puts you in touch directly with their staff in over 100 Overseas markets. It can help you access the right international contacts or partners, find the best way to do business in a market and achieve a successful market entry strategy. UKTI-organised trade missions can also be a sensible route to meeting potential trading partners. Once you have decided upon an appropriate overseas market for your goods and services, you will probably discover that there are buyers and competitors who are already trading there. So how can you be sure you are dealing with respectable and reputable companies which are capable of delivering on their promises, so that you can deliver on yours? Undertake thorough due diligence on suppliers as well as end buyers. With suppliers, check that they have the capacity to deliver the goods and services they have promised, in the quality and quantity they claim is possible. Verify that your potential business partners have appropriate financial strength, and that they are legitimate and reputable, for example through a credit record search or trade & credit information (TCI) enquiry through your bank. Barclays can support an exporter during the due diligence process, by conducting a TCI enquiry through its extensive overseas branch network. Barclaysâ&#x20AC;&#x2122; in-country staff have an invaluable understanding of local territories and industry sectors.

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Barclays

Risk mitigation

A key part of getting ready to export is to assess and manage potential risks. Buying and selling across borders can mean navigating complex foreign exchange controls. Fluctuating currency rates of exchange can also be treacherous for the unwary. When trading margins can frequently be as thin as 4% or 5%, such margins can be wiped out by a sudden adverse currency movement. Most risks associated with currency volatility can be managed. Foreign exchange risk can, for example, be mitigated by putting a forward exchange contract in place at the time of sale, thereby locking in the sales value and underlying profit of your export sale. Most companies are in the business of providing goods and services, not in speculating or taking a view on currency movements. Therefore, in general, Barclays will suggest businesses who plan to export should consider protecting against exposure to foreign exchange rate fluctuations. Sending your goods overseas without receiving payment from your buyer exposes your business to the risk of non-payment. Although you may be able to negotiate payment up front from your end buyer, very often winning export orders means giving an extended period of credit. Itâ&#x20AC;&#x2122;s important that you speak with your bank early in the process of negotiating the sales contract, and that you undertake the due diligence mentioned earlier, so that the right terms can be agreed with your buyer - giving you both the comfort you are looking for. A range of solutions are available, from Letters of Credit and Documentary Collections through to Credit Insurance cover, all designed to safeguard

Issue 02

| Global Opportunity 2015

Barclays

| against the risk of non-payment by an end buyer. The UK Government has also ensured that assistance is available through UK Export Finance (UKEF). UKEF provides a range of structures to support exports. For example, if you decide you want to protect your debtor book through credit insurance but this is not available from a private underwriter, then UKEF will seek to provide cover to enable the export to proceed.

Concentrate on cashflow

Global trade takes time and with that comes cashflow risk. Cashflow can be a major concern for an exporter. Exporters are usually required to manage a longer trade cycle than those businesses focused solely on the domestic market. This generates cashflow challenges as an exporter’s cash conversion cycle becomes extended. This is often underlined by the need for earlier purchases of raw materials through to offering longer credit terms to end buyers. The often-seen higher working capital requirement usually means that increased financial support is needed. Barclays can work with you to provide a range of working capital solutions to meet the needs of the extended trade cycle. An example of a working capital solution is a trade loan facility. This provides a valuable source of cashflow to bridge the gap between an exporter’s purchase of supplies, conversion into the end product and receipt of sales proceeds from the end buyer. Russell Grazier, Trade and Working Capital specialist from Barclays, points to a recent business proposal he assisted with: “We have supported the 40% growth aspiration of a medium sized business that produces goods for the DIY market. Our solution of a trade loan alongside an invoice financing facility has supported previous years’ growth and an extension and increase in these facilities will now enable the business to push itself to the next level of its growth strategy”. One solution to consider is Letters of Credit (LoCs), which are often used to guarantee payment of an exporter’s goods and services, as long as the correct documentation is provided by the exporter. There may be an option to provide pre-shipment finance, which can be raised upon the submission of an export LoC opened by a reputable financial institution. A further way of arranging finance is to provide payment early in instances where an export LoC has a usance term, i.e. it is not payable at sight but only after a stipulated number of days after shipment. Barclays can accept the risk of the LoC issuing bank and discount the LoC. This can serve to mitigate payment risk and allows a business to receive sales proceeds earlier. The export sales strategy of a London recycling business has risen steadily to more than £15m through using this as part of their strategy to finance growth.

Global Opportunity 2015

| Issue 02

Barclays

‘Preparing to move up a gear by selling overseas is an intensive process and should not be underestimated.’

Logical logistics

Logistics remains a key issue for both buyers and sellers; the process of moving goods between the two parties has strong implications for risk, cost, and insurance. For example, if your buyer decides they no longer want to accept a shipment of your goods or services that have already been despatched, it may result in managing a complex logistical situation in a country you are not familiar with. Logistics should, therefore, also be part of the initial export planning process.

Transport and Logistics issues to consider: exactly will the title of the goods be transferred? l Customs and Excise requirements in the UK and destination countries l The types of transport required and the companies to be appointed l Details of documentation required by authorities in the UK and in those countries where an exporter is shipping goods l How to ensure your carriers’ compliance with local port regulations l Whether sanctions or embargoes are in place in the countries through which your goods are moving. l When

Barclays is committed to providing guidance to exporters and to signpost them where and when needed so they get the right support from the right people at the right time. Through discussions with their bank and key professionals and agencies such as UKTI, UKEF and the Chambers of Commerce, a would-be exporter can move into the world of international trade with genuine confidence. House of Commons Library – Trade: Key Economic indicators, 2015 researchbriefings.parliament.uk/ResearchBriefing/Summary/ SN02815#fullreport [2] Office for National Statistics, 2014 - www.ons.gov.uk/ons/index.html [3] British Chambers of Commerce, 2015 - www.britishchambers.org. uk/2014%20Int%20trade%20survey_Market%20opps%20and%20 barriers%20report.pdf] [1]

Barclays is a trading name of Barclays Bank PLC and its subsidiaries. Barclays Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (Financial Services Register No. 122702). Registered in England. Registered number is 1026167 with registered office at 1 Churchill Place, London E14 5HP.

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DWF

Migrant crisis The migrant rescue issues are probably some of the most complex and worrying for decades, says Jonathan Moss. Head of Transport Sector, DWF

cover may be hard to find. Insurance premiums will rise and shipping companies may have to alter their routes at additional expense. Taking part in a rescue operation also means delays that can prove costly for merchant ships on tight schedules. With commercial vessels playing their part in the humanitarian crisis, there is likely to be an impact on trade with the Shipping Industry facing a hit to its profits. One of the most significant concerns for a vessel instructed to complete a search and rescue mission will likely be the cost and expense of the diversion of the ship to rescue, and thereafter land, the migrants. There is a view that the smugglers who often force migrants out to sea in unseaworthy boats are deliberately targeting ships. Experts believe that those responsible know that ships will be bound to try and rescue migrants, so they send their victims sailing off with rescue as the only option. As the Mediterranean migrant crisis mounts, some believe that only those commercial ships operating with security personnel onboard should assist in rescuing seaborne migrants and ship safety and security must remain the number one priority3.

ince the crisis in the Mediterranean began to escalate at the start of 2014, over 1,000 merchant ships have so far been involved in migrant rescue operations, assisting with the rescue of more than 50,000 people. More than 750,000 migrants have arrived in Europe by sea thus far this year, not including those passing through borders undetected, and numbers are expected to increase further1. When this is compared to the number of migrants at EU boarders in 2014, at 280,0002, it is no wonder that there has been such a large impact and effect on vessels at sea. The 1982 United Nations Convention stipulates that any vessel deemed able to is obliged to provide assistance to vessels in distress, regardless of nationality, cargo or route. Cargo ships are often the first to respond, and often have to divert their journey to take on board any migrants in trouble. There is a major concern for the seafarers and shipping companies involved as merchant ships are usually ill-equipped for such large scale humanitarian responses. According to the International Organization for Migration (“IOM”) 3,406 individuals have died in the Mediterranean in 2015. While efforts continue at a political level to reduce the number migrants seeking to travel by sea in unseaworthy craft, the industry is faced with the increasingly frequent need to conduct large scale rescues. There is a sense that the Shipping Industry will continue to pressure governments to do more to meet their obligations during this crisis and will make no apology for doing so.

‘Shipping has faced many challenges, but the migrant rescue issues are probably some of the most complex and worrying for decades, perhaps even more so than piracy.’

What this means for the Industry Shipping companies are being faced with added costs owing to their obligations to rescue migrants at sea. This means that adequate insurance

Global Opportunity 2015

| Issue 02

global-opportunity.co.uk

| With additional measures and requirements being placed on ships, shipping companies’ costs will have already started escalating.

The Insurance Position However the issue of whether merchant ships are insured to carry migrants is an increasing grey area. There are worries ships are not compensated for helping in rescues or they will be fined for arriving late at port with any deliveries, as well as being at risk of being in breach of their safety certificates by taking on board more passengers than have been legally agreed upon. Similar grey areas are found regarding where liability would fall if migrants should die or be injured while being rescued by a ship’s crew4. Bound by the laws of the sea to help vessels in distress, shipping companies say Europe’s migration crisis has placed unreasonable demands on their crews to act as lifesavers in the Mediterranean. It seems many rescues under the 1982 United Nations Convention on the Law of the Sea go uncompensated and insurance industry professionals are now casting doubt on whether

DWF

JONATHAN MOSS Jonathan Moss is a partner and Head of Transport at DWF. He acts for charterers, ship owners, international traders and their insurers and reinsurers. Jonathan handles major dry shipping claims and high profile, international disputes for clients who include charterers, cargo owners and their underwriters. Jonathan has acted in one of the largest ever maritime arbitrations as well as represented parties in litigation arising from major catastrophic incidents including the Piper Alpha disaster, the Probo Koala pollution incident, the grounding of the MSC Napoli and a series of explosions in oil facilities in Malaysia. Other work includes drafting policy wordings, storage agreements, holding certificates,commercial agreements including marine cargo surveying services and product inspection agencies.

IMAGE: WWW.SHUTTERSTOCK.COM

Thousands of Syrian refugees passed from Turkey to Greek islands during the summer of 2015

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Issue 02

| Global Opportunity 2015

DWF

| certain policies on the ship extend coverage to the rescue of migrants and others in distress5. Insurers already have the consequential issues caused by rescues at sea within their contemplation, and it is the variations within individual insurance agreements on liability and marine policies that will determine whether ships are covered for the people they actually rescue. Last October the Campbell Shipping fleet ship received a call from the Maritime Rescue Centre in Malta requesting it divert immediately and go to the aid of a boat in distress that was carrying 300 to 400 people6. Their schedule was delayed by four days and the shipping company was penalised by its insurer following a successful claim for the cleanup of the ship. The money was reimbursed but as a deductible and it was mentioned on their claim record. The shipâ&#x20AC;&#x2122;s captain however has said the insurer is looking positively on the matter and he is hopeful the decision will be reversed. The key reason for the insurance claim was the post-rescue ship clean-up effort, which had left a hazardous mess. The ship had to be cleaned and fumigated and medical checks were required for the crew. The ship also had to claim for the cost of calling at more than one port and for the pilotage.

Conclusion Shipping has faced many challenges, but the migrant rescue issues are probably some of the most complex and worrying for decades, perhaps even more so than piracy. With seafarers facing life threatening decisions, death, chaos, security and safety issues the problems of irregular migration have come to the fore.

DWF

All too often merchant ships are diverted to help in large-scale rescue operations they are not properly equipped to handle safely. Governments are still relying on the moral and legal obligations of ships and their crew to cope with a migration movement of an unprecedented scale. Seafarers are often risking their own safety and security in these large scale rescues. They are also face situations for which they may require long term support such as recovering bodies and dealing with the very sick or injured, and who will pay for this? It should be accepted that if a commercial vessel has to aid a vessel in distress with migrants on board and if it is morally the right thing to do and required under national conventions, then the vessels should not be financially burdened in doing so and the Shipping Industry should not be penalised. http://www.bbc.co.uk/news/world-europe-34131911 http://www.bbc.co.uk/news/world-europe-34131911 3 http://www.ngrguardiannews.com/2015/05/ships-seek-board-security-over-migrant-crisis/ 4 http://www.ibamag.com/news/mediterranean-disaster-are-merchant-ships-insured-to-carry-migrants-22187.aspx 5 http://www.ibamag.com/news/mediterranean-disaster-are-merchant-ships-insured-to-carry-migrants-22187.aspx 6 http://www.ihsmaritime360.com/article/17652/news-insight-master-recounts-migrant-rescue 1 2

With thanks to Jamie Hoffman, Solicitor, for providing additional research

Further information www.dwf.co.uk

Half sunken ship and damaged boats of refugees in the harbour, Kos, Greece

Global Opportunity 2015

| Issue 02

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BOXARR™

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Middle East Association Middle East Association

Doha Tower, Qatar

Changing direction Opening up the Middle East markets is all about sharing information, networking and understanding who you’re dealing with, says Peter Meyer, Chief Executive of the Middle East Association For over half a century the Middle East has been dominated by profound social change, fed in part by the enormous wealth generated by their subterranean black gold. With the English language continuing to dominate as the preferred language of business and internet usage soaring in states like Saudi Arabia, the region still continues to house vast opportunities for UK business at varying levels of the industrial supply chain. As oil continues to guide the region’s economic prowess on the global stage, the continuing glut of production as Iran enters the market will continue to fuel volatility of its pricing and force some of the key markets in the region to increasingly diversify their economies. This offers exciting opportunities for UK companies to engage more strongly in high-tech technologies, the health sector, education, financial services and security services within the region. Peter Meyer is Chief Executive of the Middle East Association (MEA), a commercial organisation designed to help British businesses, particularly SMEs, engage with markets in the Middle East and North Africa (MENA). Established over 60 years ago, the MEA has an inherent understanding and experience of

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the region’s very diverse markets, and uses this understanding to guide and advise British businesses.

Which markets make up the Middle East and Africa?

If you look at population size Egypt stands at 100m, Turkey 80m, and Iran is another 80m. Saudi stands at 30m and in monetary terms remains a very large market for us. These are the significant players ahead of some smaller economies, which also contribute to the economic strength of the region. The most valuable market for the UK has traditionally been the Gulf Cooperation Council (GCC), the six countries that encompass the Persian Gulf: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. These GCC countries are historically dominated by oil and gas, and these industries will remain central to any political interests in the area.

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What does the region perceive the UK’s particular areas of strength, skills and abilities to be?

Pace of doing business is one cultural issue. Is there any other advice you would to give UK organisations?

Historically we’re a trading nation with the financial centre of London remaining an economic beacon. We’re also consistently open with the transfer of knowledge from the UK, and are certainly less concerned than others in these transfers with the MENA regions. This has led to more partnershipled ‘seller-buyer’ relationships, with an increasing number of partnership arrangements.

Historically, the region used to be content in simply purchasing UK goods to fulfil their requirements. However we’re seeing members seeking more of a collaborative arrangement with the UK with an increasing emphasis on providing employment for their younger generation. If you can offer that as part of current trade deals that are being pushed through you may then get a much better hearing. We strive to navigate people from the fast AngloSaxon way of doing business to the much slower Middle Eastern manner which features in most of the member countries. It’s not an insult but simply the way they work, and you have to understand the way they work.

Apart from oil and gas, what other sectors are opening up to UK companies?

Education, skills training, and healthcare are critical sectors for the UK in the region. With English continuing as the dominant language, people need training and obviously the UK is the ideal country to provide that. There is competition from Australia, Canada and Malaysia, but we clearly remain at the fore. We have extremely able organisations like the British Council that can spearhead these sectors, but there are also many SMEs who continue to play a significant role. Another sector is healthcare, where the UK system is arguably the envy of the world.

How important is it in this region to have face-toface contact?

Face-to-face contact is essential to doing business in the region and this requires a long-term commitment. Sometimes regional partners come to London for business, but usually you’ve got to make the effort to go out to the country where you’ll find face-to-face contact is usually the only way that they want to do business. You’ll often find your faxes and emails don’t get much response.

UK businesses have been in the region for a very long time. Would you say the UK has a historicalbased relationship with the Middle East?

How much of an opportunity is there for the UK with the lifting of sanctions in Iran?

Below left: Oil refinery, Saudi Arabia Below right: Cairo, Egypt

Historically trade with Iran centred on oil and gas with the Anglo-Iranian Oil Company established over seventy years ago in 1935. However this relationship has certainly become bruised. But if the UK can be honest about this, then the Iranians seem very willing to regain a long-term relationship with us. The opportunities here tend to be the high tech technologies with the industrial forerunners in Iran generally being on and offshore oil and gas, the

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The connections are very strong, particularly the region’s affinity to the UK monarchy. In their own sense the leaders or rulers of these states are monarchs in their own right, therefore they cannot relate to republics like France in the same way as they can to the UK. Apart from the relationship with the MEA, it is this historically-bound relationship with our Royal Family that contributes to our healthy bilateral relationship, and no other competitor is able to compete with an offering on the same level. Of course there will always be disputes, but the basic affinity remains extremely strong.

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Middle East Association

Baghdad, Iraq

health sector, financial services, education, skills and training. Has the Arab Spring uprising changed the way people do business with the region?

I don’t think so, although it may change the people that one may be dealing with as highlighted most poignantly in Egypt. The GCC has largely stayed as it was. However the Arab Spring has created a lot more insecurity, with security another sector we are frequently approached to help with. Therefore you could add security to healthcare and training as the largest sectorial opportunities in the region since the Arab Spring.

PETER MEYER Peter Meyer joined the MEA as its Chief Executive in April 2014. Prior to this, he spent over 15 years working in Libya and the region as Chairman of Tilden International. His work involved the fields of aerial photogrammetry, remedial war work, and international airport certification for safety and security. With a wealth of involvement in the region, he is a firm believer in encouraging active business contact between the UK and the MENA countries, and hopes to use this depth of experience to further the work of the MEA.

Should British businesses be concerned about security?

No there aren’t major concerns, with perhaps the exception of Yemen, Syria and arguably Libya. It’s not so much a concern about security affecting nationals, but more of an appreciation of what that country requires to maintain security. One of the great examples in this country is the 2012 Olympics. We handled it extremely well with very discreet security surveillance, and increasingly this is what regional members want. They want to have a very effective but discreet system; they don’t want roadblocks with military on every corner. Which countries are our major competitors in the region, and how do we stay ahead of them?

This demands a physical presence within your target country. It’s a very competitive market and the Chinese are continuing to have a presence with very cheap pricing. However the traditional Chinese status as commercial drivers in the region is becoming less strong with the advent of their own

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Middle East Association

| internal domestic problems, which gives us a great opportunity to redouble our efforts. The Spanish and French have also been particularly aggressive in the past two years, mainly because of the problems in their home markets. This has driven them to be very competitive in the GCC. Does the MEA predominantly provide networking opportunities?

Yes but we’re trying to go beyond simply networking. As UK businesses progress we can take their hand and hold it for longer to ensure they achieve tangible outcomes instead of leaving them after the initial introductory stages. For instance we’ve now teamed up with a ‘nursery’ type operation in Saudi, whereby we introduce businesses and help them step by step in-country if they want to go there, have a virtual office, have a business card, get a registration or present themselves to various key contacts. That means working with British business groups, embassies and posts that can provide the right introductions to these companies. The dynamics of the region are changing very fast. We do have very privileged relationships with all the Arab embassies in London alongside in-country posts in various countries. We have a tremendous amount of privileged information here, which of course we wish to share with our members for their benefit.

Middle East Association

and office sharing. It’s good because it helps them enter the market with a very low level of expenditure, and as things get more exciting they can go into it more deeply. We also host fairly intimate events at our London offices. Attendees benefit when an ambassador speaks and from networking with people who are active within their chosen market. Sharing information is of primary benefit to every member of the MEA. What does the next 10 years hold for UK relationships in the Middle East?

The UAE and Qatar will remain very important. Bahrain is smaller but, along with Oman has been a long-term friend of the UK. The opening of the Iranian market will likely lead to large amounts of investment into Oman, which is still beneficial to the UK. Taking a longer-term view, the North African market is opening up with the region potentially becoming a very large market in the next 25 years. Certainly the GCC is going through a radical change. Their oil and gas supremacy is waning, with oil hovering at US $40 a barrel and increased movement on their borders from the likes of Iran. With the UK able to adapt better, the region will have to reinforce its ties to the UK to help it through these fundamental new dynamics; it will look to us for help through this pivotal position.

What can you do to help SMEs access these opportunities?

We have private members of organisations who can help SMEs with their registration, accommodation,

Further information www.the-mea.co.uk

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Tohid Tunnel in Tehran, Iran. It is the third longest urban tunnel in Middle East

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UK India Business Council UK India Business Council

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An unbeatable combination

There is robust trade and investment between India and the UK and now is the time to seize the opportunity, says Richard Heald, CEO of the UK India Business Council (UKIBC)

conomic, demographic and policy drivers make India an increasingly active proposition for UK businesses. India is the second largest country in the world by population, the largest democracy in the world and the largest English speaking nation in the world. 25% of the world under 25s live in India. There are 900 million handsets in India. Its economy is growing at an annual rate of more than 7%, currently the fastest growing of any major country including China. Indiaâ&#x20AC;&#x2122;s economy is set to exceed the size of the UK economy in the next few years and is forecast to be the 3rd largest economy in the world in about 30 years.

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The new, fast and air- conditioned Mumbai Metro train

In May 2014, a new Indian government led by Prime Minister Narendra Modi was elected with a mandate to eliminate poverty and create a 21st economy through the pursuit pro-business policies. A key aim for the new government has been to transform India into a global manufacturing and export hub. This will be driven by a series of bold strategic development initiatives including Make in India, Digital India and Skill India. Alongside these, there are initiatives to improve ease of doing business and new structures and policies are being created to promote competitive and cooperative federalism between Indiaâ&#x20AC;&#x2122;s 29 states. The opportunities presented by the rapidly changing India are immense. UK businesses have been operating successfully in India for many years - from giants such as BP to small ambitious exporters like Derham & Derham. Indeed, the UK has been the largest G20 investor in India for the past 14 years and there around 535 UK businesses currently operate in India in sectors as diverse

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UK India Business Council

| as retail, infrastructure, construction, information and communications technology (ICT), creative industries and healthcare. British direct investments generate more than 137,000 jobs, nearly 7% of jobs generated by FDI in India. In total, British companies in India are estimated to employ 691,000 people – through directly created jobs and joint ventures with Indian and other firms – representing 5.5% of the organised private sector workforce in the country. And the UK is a huge financial investor in India. There are some 555 foreign portfolio investors from UK as of 31st March 2015, with investments worth $18 billion registered with SEBI the Securities Exchange Bureau of India.

Above: Hyderabad is the fifth largest contributor city to India’s GDP with US$74 billion RIght: Prime Minister Narendra Modi

Trade collaboration At the same time, India is one of the biggest investors in the UK and in 2014, investments from India increased by 65% making it the third largest source of FDI in the UK. There are more than 800 Indian-owned businesses in the UK, employing more than 110,000 people. Thus, there is a long shared history of

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UK India Business Council

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collaboration between the UK and India on trade and investment. And the recent successful visit by the Indian Prime Minister Narendra Modi to the UK is widely expected to catalyse further economic ties. So where are the opportunities for your business? Well, simply put – everywhere. India is in a period of accelerating growth where consumer demand, infrastructure needs, digitisation and the need for technical innovation across industry are key imperatives. Moreover, the Modi Government has empowered the 29 States of India to compete to attract the investment £ across key sectors. India has liberalised great swathes of the economy in areas where the UK has significant strengths – in retailing and logistics, in e-commerce, in advanced manufacturing, in renewable and green energy, in defence, in healthcare, in security and in financial and professional services. Take the financial services, for instance. This year has seen the increase in FDI limits in the insurance sector. Already we have seen Standard Life, Bupa and Aviva announce expansion plans. Just last month further liberalisation allowing single brand

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RICHARD HEALD Richard Heald joined the UK India Business Council (UKIBC) as its CEO in September 2010. Previously he worked for Rothschild for over 17 years and has over 30 years’ experience of the international financial markets, 20 years of which has been focused on advisory and capital raisings for governments and major corporate across the globe. Latterly, he worked as Vice Chairman, Rothschild, India, where he played a key role in advising numerous UK and Indian companies on spin-offs and capital raisings, secondary capital raisings, outbound and inbound M&A as well as the provision of debt and restructuring.

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Chhatrapati Shivaji International Airport in Mumbai

retailers to engage in e-commerce is expected to stimulate significant activity. Vodafone is the largest single foreign investor in India and in November announced further investments totalling some US$1.25bn on top of the already US$25bn already invested. But this activity is not just amongst the large companies; data indicated that there has been a 300% increase in UK companies incorporating in India over the past decade in sectors as diverse education, ITS, pharma and logistics. This is underscored by the number of M&A deals from the UK into India totalled some 14 in 2014 with an aggregate value of some US $4,125 million.

Unbeatable combination What do these figures tell us? Simply, they underscore the robust trade and investment between the two nations – an “unbeatable combination”, in other words, and one we at the UK India Business Council are keen to build upon further by providing services, advice and research to UK companies looking at India and ultimately by offering in-country support and office space through our four UK India Business Centres. As the leading investor in India, the UK is a natural partner for the success of marquee initiatives of the Indian Government such as Make in India, Digital India, and Skill India. However, the fundamental reasons why India matters to British businesses have less to do with government and much more to do with the size of its consumer and business market. India has an extraordinary capacity to innovate, and the potential for British-Indian joint ventures to

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‘The opportunities presented by the rapidly changing India are immense’ develop export markets across Asia and Africa is compelling. Nonetheless, there is a very real risk that British companies that ignore India will face terminal decline as smarter, cheaper Indian competitors win global markets. As access to India continues to improve with restrictive regulations and barriers to entry being removed, other nations in the West and in the Far East are actively engaging with the Indian market. The opportunities in India, unfortunately, are time limited and becoming ever more competitive both from international and increasingly domestic companies. I very much hope that India forms a core part of your expansion plans as now is the time for British business to seize the India opportunity with both hands. Now is the time to engage, to create dialogue and to allow objective assessment of risk and opportunity within India to make UK PLC the partner of choice for Indian companies and investors alike. And the UK India Business Council stands ready to support your plans.

Further information www.ukibc.com

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UK India Business Council

Why not trade-in your old printer â&#x20AC;&#x201C; it may be worth up to ÂŁ1800.00!

Dr Frank-Jürgen Richter

Informed and candid dialogue about the different approaches to economic growth by countries such as China, is the best way to achieve greater global integration, says Horasis founder Dr Frank-Ju¨rgen Richter

Global vision Dr. Frank-Jürgen Richter is the Chairman of Horasis: The Global Visions Community. Horasis is an independent international organisation committed to enacting visions for a sustainable future. As one of the leading analysts of international business and emerging economies, he influences major business and governmental decisions with his public commentary. He has a thorough understanding of how the world functions today - an understanding created through an ongoing interaction with top business, political and intellectual leaders around the world.

he International Festival of Business 2016 is one of the largest gatherings of business and political leaders in the world. Taking place in Liverpool over three weeks, IFB 2016 brings together thousands of businesses from around the world, creating a global marketplace for making connections through events, networking and deal-making. One of the major sponsors of the event is Horasis, the Global Visions Community. The independent international organisation is founded by Dr FrankJurgen Richter and is committed to enacting visions for a sustainable future. A former Director of the World Economic Forum, Dr Richter is an accomplished financier and linguist who believes passionately in dialogue and the exchange of expertise as the driver to greater global integration. Dr Richter’s own expertise lies in Asia where he lived and worked for a decade, principally in Tokyo and Beijing, and is fluent in both Mandarin and Japanese.

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Bridging divides Even at this early stage 150 companies have confirmed their attendance at the IFB 2016 in Liverpool. “There is a very engaging dialogue going on and we very much believe in this dialogue,” Dr Richter explained. “When there is trust you can bridge the divide and do business together. This is not a conference; it is a peer to peer event. We believe in community building where people come and meet each other, and the return ration for events is high - up to 80 per cent.” Horasis itself holds regular events to bring together highly influential groups of business leaders to discuss collaborative approaches to addressing sustainable growth. The meetings are the foremost annual gatherings of business leaders from emerging markets and their global counterparts, and are regularly attended by CEOs of leading companies.

China Meeting Horasis also hosts individual events that centre on China, India, Russia and the Arab World. The Horasis China meeting in Portugal in October gathered 300 senior decision makers from business and government from around the globe to share insights on the current state of the Chinese economy. The next meeting is to be held in November 2016 in Interlaken, Switzerland, where 300 participants from business and government will

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Horasis: The Global Visions Community

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Dr Frank-J端rgen Richter

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Dr Frank-Jürgen Richter

China is portrayed to be the world’s manufacturing hub but India is now taking over this role, especially in traditional industries like car manufacturing.’

join an intense two-day programme designed for senior decision makers from China and the world to identify business opportunities and innovative approaches to economic development. Participants will discuss a wide range of issues related to China and its new economic leadership role. They will also discuss and assess the free trade agreement between China and Switzerland – the first agreement of its kind that China has signed with a nation in continental Europe. Dr Richter developed and managed European Multinationals’ China operations while living in Beijing, and believes the change makers in both Europe and China are increasingly private rather than state companies. “The Chinese economy is still growing at around

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6.5 per cent, but the economic growth is not what it was around five years ago. Now we have seen speculation on the Shanghai stock exchange and the fall of stocks, China is getting into issues, but it is really quite natural in the cycle. I don’t really see a bubble burst in China. China is continuing to grow and together with India is still the world’s growth engine.”

Landmark meeting The Horasis India Meeting in July in Switzerland was another landmark meeting and the first to take stock of the state of the Indian economy after having seen the new government one year into power. More than 18 CEOs and two former government ministers took part, and the resulting dialogue identified many of

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Horasis: The Global Visions Community

Dr Frank-Jürgen Richter

Above: Liverpool; venue city of the International Festival of Business 2016 Right: Still from virtual tour of IFB2016

the advantages and challenges currently facing the country. “Mr Modi is using some elements of the Chinese approach, such as improving infrastructure by building a great network of highways, as well as focusing on energy and rail links. It’s what the Chinese did 20 years ago and it’s the right time for India to look at these issues as infrastructure has been a real bottleneck for the country,” observes Dr Richter. Another important issue is creating stability for investors. “They don’t want legislation to change every month. The Chinese created a pro-investment climate and rolled out the red carpet for potential investors. This is now starting to happen in India. China is always more advanced when it comes

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to the west because the Chinese approach to economic growth is different, always a top down approach and quick and decisive decision making whereas in India, as a democracy, it takes time to drive through decisions and make changes.” It is by studying these differences and similarities between countries’ economic growth, Dr Richter believes, using knowledge exchange and interaction in a variety of settings, that the most effective dialogue to drive greater global integration is achieved.

Further information For more on the International Festival of Business in Liverpool in 2016, go to www.ifb2016.com www.horasis.org

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Business Council for Africa

Africa’s next move

Africa is not one homogeneous mass, but a combination of 54 sovereign states, with the result that each of these countries has its own blueprint for economic success and its own strategy for attracting foreign investment, says Karen Taylor CEO Business Council For Africa

frica’s next move is difficult to predict when associated with the concept that the African continent as a whole is developing a single, comprehensive strategy for economic growth and development. According to African Economic Outlook, a collaborative product between the African Development Bank, the OECD Development Centre and the UN Development Programme, Africa’s GDP growth is expected to strengthen to 5% in 2016, with Nigeria taking the helm as the continent’s largest economy. Consequently there has never been more opportunity for the UK to invest in nearly all sectors on the Continent. The Business Council for Africa (BCA) has successfully promoted investment into numerous African countries for the past 60 years. Headquartered in London, the BCA has established a reputation as the leading independent, not for

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Above: Kwame Nkrumah Memorial Park. Accra, Ghana RIght: Lagos, Nigeria

profit organisation, which brings together foreign and African business interests under one roof (www.bcafrica.co.uk). Originally founded to promote British interests in Africa, the BCA has evolved into an organisation that recognises the ‘Global Village’ mentality that now influences business transactions around the world. As such it is poised to lead the way in channeling foreign investment into Africa, assisting African governments in securing that investment and providing a conduit through which an exchange of ideas and actions can take place between Sub-Saharan Africa and the international investor community.

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Business Council for Africa

KAREN TAYLOR Karen Taylor has been CEO of the Business Council for Africa since September 2015. With Arnold Ekpe (Chairman of Atlas Mara Group) as its Honorary President, the BCA was established in 1956 and is represented in 33 countries throughout West, Central and Southern Africa. It has a membership base of over 400 companies and entrepreneurs. The BCA works in partnership with the Eastern African Association and has strong links with other African aligned organisations such as the Royal Africa Society. The BCA believe that a responsible and profitable private sector has a crucial role to play in Africa’s development.

The BCA has a diverse membership and enjoys affiliations with 33 different Sub-Saharan African countries, which means that BCA remains an impartial, membership driven organisation, with no particular focus on, or bias towards any one country. It is worth mentioning that the BCA focuses mostly on western and southern Africa whilst its partner organisation, the Eastern Africa Association covers the east Africa region. As such, it is more effective to consider investment in Africa in terms of sectors, rather than geographies. IMAGES: WWW.SHUTTERSTOCK.COM

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Energy The sector that is dominating virtually every African country’s investment agenda is energy. There are more than 600m people in Africa without access to electricity at the moment – some 70% of the continent’s population – and African governments are working hard to address that imbalance. A lack

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Business Council for Africa

of constant, reliable energy supply is restricting GDP growth and holding back development in all other sectors of their economies, including education and health, and many countries are making affordable energy their main investment priority. Energy selfsufficiency is seen as the springboard to all other development processes and renewable energy is increasingly being accepted as a major part of the electricity blend in any African country. If there is any one, single â&#x20AC;&#x2DC;next moveâ&#x20AC;&#x2122; for Africa, then investment into the energy sector would be it.

Infrastructure and agribusiness After energy, the next most important investment areas to focus on in Africa are infrastructure (ports, roads, railways, water systems, etc.) and agribusiness (improved farming methods, higher yields, value-addition and processing). The knock-on effect from investment into these two sectors would include increased intra-African trade and smoother logistics chains, both of which become investment opportunities in their own right.

SMEs and entrepreneurship With a diverse membership base, the BCA is only too aware of the value of small and medium sized enterprises (SMEs) and the massive role entrepreneurship plays in African economies. Too often overlooked in the grand scheme of things,

Above: Olkaria II geothermal power plant in Kenya Below: A road through the volcanic mountains in Black Desert near the Bahariya Oasis in Egypt

SMEs are the engines that power economies in Africa and provide much needed employment. Investment into smaller businesses can quite often pay handsome dividends in the long run.

Tourism and service industries With beautiful coastlines, stunning scenery and a plethora of flora and fauna, Africa is arguably one of the best places in the world to visit. Tourism plays a large part in many African economies, but there is still room for expansion, with quality tourist accommodation (hotels, resorts) being high on the

THE BCA BENEFITS Looking to make connections, broaden your network or generate deals? Or are you looking to start a business or expand your multinational company into Africa? Whatever your size, SME or major global leader, our services help drive business successfully in Africa. In addition to providing you with monthly reports and entry to our UK events, the BCA Annual Membership gives you access to the BCA international network.

Core services

If youâ&#x20AC;&#x2122;re entering or expanding into Africa, the key services we can offer you and your business are:

High level networking

Hear about the latest market trends affecting business in Africa and pick up practical information from industry experts at our regular Africa-focused events.

Networks

More than just meeting other members at events, we also offer introductions to potential partners, clients and stakeholders through our business networks.

Business insights

In-Country Directors produce monthly publications on local markets and provide on-the-ground expertise to help you uncover African investment, trade and business opportunities.

Profile enhancement

By joining the Business Council for Africa, you are able to raise your brand profile and champion your business through our weekly newsletters and company case studies or by hosting a panel discussion. As a member you can sponsor or host events, as well as have access to tailored promotional packages including email shots, event listings, digital advertising and promotional materials at events.

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| list in order to attract increased tourism revenue. The knock-on effect from investment into the infrastructure in this sector would be a further need to provide associated services such as tourist attractions, car hire facilities, foreign exchange and many more.

Health and education Although not necessarily obvious investment sectors in Africa, access to better health and education facilities are high on many African governments’ agendas. To that end there are opportunities for partnerships with governments. Combined with an increasingly wealthy middle class in Africa looking for improved health and education facilities for their families, these infrastructure and the value-addition opportunities are becoming attractive investment priorities.

Other investment areas There are obviously many other sectors that merit attention from investors into Africa (manufacturing and maritime opportunities being just two examples) and the BCA is able to assist its members and governments explore those sectors, which are all part of the big picture in Africa’s next move as an investment destination.

Business Council for Africa

‘HERE TO HELP MEMBERS’ John Felicite of ABAX. (ABAX is a leading Corporate Services company in Mauritius and is committed to Africa with offices in South Africa, Kenya, Ivory Coast and Dubai, as well as offices in India, Singapore and London. www.abaxservices.com) “As you are aware ABAX is new in the UK and we have only been a member of the Business Council for Africa since March of this year. That being said it has become clear that being a member of the BCA has been one of the best decisions that I have made since setting up the UK division. It is clear that the aim of the BCA is to help members meet with each other to engage in conversation, which leads to the mutual benefit of both sides. As a membership organisation this is fantastic and I attend as many events as possible in order to meet with those interested to invest across the continent.”

Further information www.bcafrica.co.uk

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China calling

China-Britain Business Council

The UK must be sensitive to the shifting internal dynamics of the Chinese economy if we are to continue to take advantage of the the Chinese opportunity, says Stephen Phillips, Chief Executive at the China-Britain Business Council

The stratospheric rise of the Chinese economy has been well documented over the last 20 years; it is now the largest merchandise trader, holder of foreign exchange reserves, manufacturer and economy in terms of purchasing power parity. Whilst this rise has significantly altered the dynamics of the global economy, there remains a pervasive mystery that surrounds this giant. Although China may not be experiencing the double-digit growth that it once enjoyed prior to the global financial crisis of 2008, the internal dynamics of the Chinese economy are shifting.

What is the current state of the general relationship between China and the UK from a business perspective?

The last couple of years have seen a significant deepening and more sophisticated trade and investment relationship with China. Whereas the focus five years ago was on British companies going to China, the discussion is now focused on collaborations between British and Chinese companies. These could be in China, within the UK or in third countries. The goal is to get the conversation going and allow successful business to flow from there. The Chinese economy is changing as it moves away from reliance on exports towards a more advanced consumer-led base. Whilst this can be a painful process in some sectors of the economy, it’s opening new doors in others. Parts of China that were once very buoyant are becoming less so, with other perhaps less familiar regions growing faster. To grasp the complexities of China, you have to think of China in a similar light to that of the individual states of the EU – large and complex. How does China differ from the monarchies of the Middle East or democracies like India? How does this affect the Chinese mentality?

That is a simple question but the answer is complex. Modern China does not fit the stereotypical image so

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often portrayed in the media. What I see is a vibrant economy, one that is increasingly laissez-faire. But there are sectors with market access issues and government still plays an important role but overall the environment is more welcoming than many UK businesses may expect. How much does [mis]perception hinder UK businesses at SME level from engaging in suitable opportunities in China?

Although not a suitable international business environment for novices, if you’ve a management team that knows how to work outside the UK, then there’s no reason why you cannot be successful in China. Thousands of UK companies have entered the Chinese market successfully. Although it is rarely ‘plain sailing’, some companies are lucky, quickly find the appropriate partner and achieve considerable success. How important is the appreciation of cultural difference in China when doing businesses?

As with anywhere in the world, you need to be aware of basic courtesies and how certain situations are approached. These courtesies, including the way business cards are exchanged or the behaviour that is expected at a Chinese banquet, are not difficult to grasp but are equally essential to avoid embarrassment. What sectors particularly are the Chinese interested in?

Vast opportunities lie in the consumer market from basic goods to luxury products. One of the most buoyant areas is the mid-market, serving predominantly the middle class. Whilst luxury spend was once growing incredibly strongly, it’s increasingly the mid-level consumer opportunity that is very tangible and thus more suitable to high street brands. At the same time there has been an explosion of e-commerce platforms with the Chinese population using them to purchase foreign goods and services. This offers new and cost-effective routes to market. And that is a market that is all over the country. Whilst most UK nationals still gravitate towards Beijing, Shanghai and Guangzhou as these locations

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China-Britain Business Council enjoy a global reputation, they are the most competitive markets for domestic and international competition. Moreover UK businesses should acknowledge that 65% of middle income consumers in China don’t live in these cities, with demand from central and western areas of China growing strongly and accompanied by less competition. Without a requirement for a ‘bricks and mortar’ presence, e-commerce has a significant benefit in these areas. The middle class consumer bracket in India is growing rapidly. Are we seeing the same rise and demographic shift in China?

The phenomenal economic growth in China has lifted 400 million people out of poverty and created a middle class of more than 100 million who are now looking to travel internationally, and who want to purchase quality goods and services including foreign food and drinks to accentuate their more sophisticated tastes. Therefore the Chinese are offering opportunity on a truly international scale, from which the UK can greatly benefit.

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Stephen Phillips

STEPHEN PHILLIPS Stephen Phillips joined the ChinaBritain Business Council as Chief Executive in 2006 and at the same time became Chairman of EU China Business Association. He is an Expert on PPP, Research Institute for Fiscal Science, Ministry of Finance; Economic Adviser, Jilin Province; and Business Adviser, Anhui Provincial Government. Stephen has been actively engaged in business in and with China since 1989 and his experience spans a number of sectors including aerospace, oil, gas and petrochemicals, infrastructure, ICT and financial services.Prior to moving to Asia in 1989, Stephen worked for the Barclays Group in the UK and Botswana. He holds a BSc in Chemistry and Law from the University of Exeter.

budgetary freedoms resulting in buildings that are bigger, grander and fulfill every superlative one can conjure up.

We’re actively in competition with the Chinese, in many regions of the world. What about this competition domestically within China?

Noting the sheer scale of the country, what is the quality of the infrastructure?

It is a globalised world. Your partner can also be a competitor. As an example, engineering companies such as Atkins, Arup, and Mott MacDonald along with leading UK architects continue to enjoy fantastic opportunities in China. China has given an opportunity to architects that last happened in the Victorian era in the UK with impressive artistic and

One of the most striking changes in China over the last couple of decades has been the impressive progression of Chinese infrastructure. A journey from Shanghai to Nanjiang took roughly seven hours by car 20 years ago; currently it stands at one hour and fifteen minutes by high speed train with an evergrowing number of Chinese cities now connected

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China-Britain Business Council

China-Britain Business Council by high speed rail. This vast expansion of Chinese infrastructure has transformed the economic landscape of China. Does manufacturing continue to dominate the Chinese landscape?

China is, of course, a global manufacturing behemoth. But it is changing. Manufacturing has migrated more towards the Centre and West of China and whilst the sector remains extremely active, this year has seen the service sector overtake in terms its contribution to GDP. Perhaps surprisingly, we’re now witness to Chinese companies relocating their manufacturing to other developing countries. Reasons for this sectoral shift stems from a more general desire to reshape the Chinese domestic economy into a thriving service sector which is more sustainable for long-term growth. This is not to imply that manufacturing isn’t critically important; it remains a pillar sector that provides substantial employment but it’s one that’s undergoing an internal transformation. The Chinese government strategy, ‘Made in China 2025’ focuses largely on industrial upgrading and encouraging Chinese companies to progress up the value curve, utilising more advanced materials and precision engineering. With the UK at the forefront in this field, we have a fantastic opportunity to capitalise on these shifting dynamics and we hope to see a significant increase in collaborations between the UK and China. Financial Services The financial and professional services sector can be split into two strands. Firstly the servicing of Chinese companies who venture overseas is associated primarily with advisory and financial work. The second concerns the servicing of the Chinese consumer through asset management, insurance, and banking. Whist opportunities in this sector are amongst the most highly regulated, we are beginning to see signs of liberalisation. The internationalisation of the Chinese currency, the Renminbi, has also brought opportunities for the UK with London currently ranked as the major offshore centre for Renminbi products and services. Additionally Chinese Renminbi investment into the UK has seen some significant merger and acquisition deals with Chinese companies acquiring relatively small UK companies, learning from them and bringing their technology back to China while simultaneously ensuring the UK business continues to grow. How does the CBBC help the UK to service this country with its colossal size and near infinite opportunities?

The CBBC’s presence spans more than 60 years with an extremely knowledgeable team. This longevity gives us access to the Chinese system. We currently have 15 offices across China with around 100 staff. Their practical advice is borne from first hand experience: where to do it, who to do it with, what to and what not to do.

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Stephen Phillips

We also have 11 offices within the UK that offer local access to Chinese advice. This is critically important for SMEs whose limited resources may not allow travel to farther regions. Particularly at this SME level, is it true that you won’t be able to see a return on initial investment for at least five years?

It all depends. There is no general rule. Whilst the CBBC can help fast-track your entry into the market, management of expectation is crucial to avoid disappointment; significant time and effort is required over a long period to ensure you build those working relationships before you can expect significant returns on your investment. But more and more companies see early success. What does the future look like for China? Where do you see the Sino-UK relationship developing in the next five years?

China is undoubtedly changing and the nature of the commercial opportunities is changing too. China is moving towards an economy driven more by consumption. These are opportunities in China; with Chinese companies in the UK; and they are opportunities to work together in third markets around the world. UK-China business cooperation is more varied and accessible than ever before. China and the UK’s business objectives are well aligned

‘The absolute growth in the size of the Chinese economy this year is almost triple what it was a decade ago.’ and opportunities lie in sectors of strength for the UK, including financial & professional services, healthcare, education, advanced engineering, retail, innovation and creativity. Each region of China can, and indeed must, be looked at in the way that a business would look at the different countries of Europe. And what of China’s growth prospects?

China has made an important step-change in its development. GDP growth around the 7% mark or, possibly, lower is the new normal. But the focus on growth rates is simplistic. The absolute growth in the size of the Chinese economy this year is almost triple what it was a decade ago and by extension, GDP per capita continues to grow strongly in absolute terms. The on-going adjustments in the Chinese economy will not be without pain but should be viewed in a positive light for the opportunities they offer to British companies.

Further information www.cbbc.org

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Siemens

Weather Resistant City residents and businesses rely on intelligent infrastructure systems. But new thinking is needed to create resilient cities, says Michael Stevns, Partnership Manager, Centre of Competence Cities, Siemens, UK

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e are not very well adapted to our current weather. Strong wind, heavy snow and intense rainfall are already disrupting our daily routines and lives, and in the future, even average weather will challenge our ability to cope. Across the globe, we are experiencing an increasing frequency of extreme weather-related events. These events are playing out against a backdrop of global population growth and urbanisation, leading to a complex knot of interrelated pressures on our cities. City-based residents and businesses depend on the effective and reliable operation of infrastructure systems to deliver energy, mobility, water, sanitation, information and other critical services. Cities need a new way of thinking about how they plan, design, build and manage this essential infrastructure under more challenging conditions. Itâ&#x20AC;&#x2122;s important that new and existing infrastructure with long operational

Infrastructure lifetimes are capable of coping with the climate they will experience over their lifetime. Measures to make infrastructure structures more resilient to extreme events often take a long time and incur significant cost. Technological development is opening new paths for protecting infrastructure. The increased use of ICT, like field devices and sensors, either embedded in new systems or retrofitted onto existing ones, is making infrastructure more intelligent and offering enhanced capabilities to monitor and control infrastructure assets. These developments can provide operators with feedback of the conditions and performance of their networks, enabling diversion of resources to where the supply is most critical. This can, for example, ensure that hospitals and fire stations have sufficient power to maintain their function during a natural catastrophe, diverting power from non-essential facilities so that the networks fail in a ‘safe’ and predictable manner.

Siemens

MICHAEL STEVNS Michael is Partnership Manager within Siemens Global Center of Competence Cities. This role involves establishing and managing collaboration between Siemens and city stakeholders across the globe. Recently the focus of his work has been how to increase the resilience of infrastructure assets and cities. Michael was previously Senior Advisor at the International Rail Union (UIC) in Paris where he was responsible for the development of pan-European Passenger Information and Distribution Systems. Specialising in how new technology can improve accessibility and improve the urban environment, he also was involved in rail and public transportation advocacy towards European and global institutions.

Intelligent Infrastructure The world is becoming more connected as a result of billions of pieces of equipment talking to each other. The physical world is being complemented by a digital layer, linking up and processing the abundance of data being generated. This digitalisation means that infrastructure networks are converging towards each other and becoming more interconnected. The sharing of information across systems and organisations can provide a holistic view of the city and optimise performance for all networks. This integration of systems offers greater flexibility, coordination and redundancy, allowing systems to provide a smoother, more efficient daily service while also being more capable of managing the stresses associated with peak demand and unusual events that can affect capacity in parts of the system. Designing infrastructure systems as a ‘mesh network’ with pockets of local, self-sustained water and energy services can ensure continued operation in times of disruption. These infrastructure ‘islands’ can operate independently of the grid, but are connected to the main grid – a concept which can be scaled for different applications and implemented at a nano-grid level, i.e. buildings, or at a micro-grid level such as hospitals, campuses or almost any high priority area. ICT should accompany such decentralised designs, ensuring proper monitoring and management of the total network. Local decentralised solutions have benefits besides being more resilient. Efficiency is increased by locating generation close to consumption, which also reduces costs and losses associated with distribution. Intelligent infrastructure and automated processes can be a quick and cost-effective way to increase resiliency, resulting in better use of existing infrastructure, increased efficiency, reduced operation costs, and reduced environmental burdens. To substantiate such a claim, Siemens has partnered with Arup and Regional Plan Association in exploration of how technology can increase the resilience of urban infrastructure systems. The

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findings are presented in two reports: “Toolkit for Resilient Cities” and “Resilient Urban Mobility,” the latter of which was launched in February 2015. These studies provide a loose framework for assessing the resilience of infrastructure systems and showcase a number of technologies within the energy, water, building and transportation domains that could render the systems more resilient towards external shocks and stresses. In both studies a number of ‘what-if’ scenarios are established. In “Toolkit for Resilient Cities” the cost and benefits of introducing an effective system of smart technologies for the electricity distribution network are examined, finding that these investments would yield net benefits of up $2.5bn over a 20 year period. “Resilient Urban Mobility” uses a similar approach but focuses on the benefits of applying smart transport technologies in Ho Chi Minh City - a fast growing city exposed to extreme weather. Rapid urbanisation and increasing incomes means that the city is struggling with seemingly ever-increasing congestion, stifling economic opportunities as a result. For example, the number of delay minutes is forecast to increase by 750 per cent over the next 30 years if no investments in transportation infrastructure are undertaken. Adding intelligence to the transport network would both improve the flow of traffic on a daily basis and reduce the effects of the frequent flooding that the city is experiencing. Our work is not uniquely applicable to the selected cities. The technologies and derived benefits are valid in any city exposed to extreme weather events and challenged by rapid urbanisation regardless of size and stage of economic development.

Further information Siemens.com/urban-resilience

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WYG

Challenging environments The remote location of mountain villages in Nepal proved a real challenge for organisations working on rebuild projects after 2015’s devastating earthquakes, so a solution was found close to home, says Glyn Utting, International Project Manager at WYG

ollowing the devastating earthquakes in Nepal in April and May 2015, global project management and technical consultancy WYG pledged £20,000 to support Community Action Nepal (CAN) in its reconstruction effort. By lending its skills, expertise and capability to deploy resources within challenging environments, WYG is helping CAN rebuild key projects in rural Nepal to anti-seismic standards. CAN is a UK-based organisation whose aim is to help the mountain people of Nepal. It works in partnership with rural villages and communities to provide local healthcare, education, income generation, cultural and mountain porter welfare facilities. All 40 of CAN’s community asset projects suffered structural damage from the earthquakes and subsequent landslides, with more than half needing total rebuilding or significant reconstruction. So WYG sent International Project Manager Glyn Utting to Nepal in July 2015 to assess the damage to the affected areas. Having visited Nepal several times before the earthquakes, Glyn was shocked at

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the devastation they had brought to the communities there. “Visiting the country now you see that people have lost absolutely everything, and the government is unable to help in a capacity that you would imagine in this country. We live in a society where the government would be able to react very quickly, but in Nepal and other parts of the world that’s not the case, and people are left on their own to get on with things.”

Devastated communities During this initial visit Glyn and his colleague Simon Eden, Senior Geo-Environmental Consultant at WYG, spent two weeks visiting rural communities alongside representatives from CAN and Article 25, another UK-based disaster relief charity. The team travelled to remote villages by helicopter and on foot to assess the structural and geological damage and meet village representatives. It was an emotional experience for everybody involved to see the devastated communities and hear moving stories from those who survived. Particularly in Langtang,

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Infrastructure

WYG

GLYN UTTING Glyn Utting joined WYG eight years ago as a civil and structural engineering graduate from the University of Leeds. He is currently a Special Projects Manager within the Management Services team. He spent his early career working on a host of historical buildings. In 2013, Glyn spent 9 months in Kabul, Afghanistan, project managing the delivery of an infrastructure development. He has a passion for travelling and working on rebuild projects that make a difference to the local communities.

where village leader Temba spoke in detail about watching the landslide hit his village following the earthquake. Glyn was later told Temba had lost 22 members of his family in the tragedy. Following the site visits, the team identified three key project rebuild opportunities, including rebuilding homes in Langtang village where 116 houses, a school and health post were destroyed by the landslide. Also on the list are the Milamchiguan School and Health Post, one of the most successful rural schools in Nepal teaching 400 pupils, and the Bharabesi School for the Deaf, the only deaf school in the country.

Remote area Glyn acknowledges there are huge challenges facing any rebuilding project in such a remote area. “Most of the time we are looking at what building materials are available and what skillsets are present within the local villagers that drive solutions,” he says.

Opposite: Bihi Health Post construction Above: Destruction following the earthquake at Bahrabise Below: CAN damage assessment team with locals in North Gorkha

“For example, I spoke to various people who were experts in seismology and engineering and they talk about this ‘fancy’ solution of concrete. But in Nepal that’s not an option, most of the places we’ve been to have no roads and equipment has to be carried by hand, and that defines what we can work with. “We’ve gone around in circles because we’ve found you cannot build an earthquake-proof building – it’s impossible. In these regions in Nepal the abundant material is stone, which is not an ideal material to be building earthquake-proof housing with, but what we can do is put designs together that ensure the stones fall out and not in, and this is what’s saving lives. You can’t save the building but you can save the lives of those living inside the building and that’s the priority.” In addition to its UK and International Projects, WYG has more than two decades’ experience working in fragile and conflict affected states (FCAS). Glyn has previously worked in Afghanistan on a NATO-funded military academy project, and in Libya where WYG was involved in the DFID project to help the country rebuild its security force, justice and defence ministries after the Gadaffi regime. “Most of WYG’s work in these territories is in “International Development” work, so we’re rarely involved in infrastructure and construction management, but instead working on donor funded projects,” explains Glyn. “That is generally in Socio Economic Consultancy, but increasingly HM Government’s target is in supporting primary and social infrastructure development in many of these countries.”

Helping hand Glyn believes the best fit for WYG services in Nepal is to help local architects and engineers deliver the work themselves. “There is design and rebuild expertise in the country, and I was a big advocate that the architects and engineers should be Nepalbased and not UK-based – it should be driven by local people,” says Glyn. “The value we can add is actually to help them project manage the work. They

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WYG

Infrastructure

have a rough idea of what they need to do, but need help with the order they need tto accomplish it with the resources available. In other words we can help them to create the programme that makes the work realistic and feasible.” Glyn also believes the scale of what needs to be achieved in environments like Nepal gives UK companies an advantage in aid efforts. “In the UK I think we have the expertise of managing infrastructure for several projects in one go. The Nepalese have the skill sets and it’s just about them taking ownership. It’s giving them a helping hand and as such giving them the confidence that they’re doing the right thing and in the right order. I will stay involved in Nepal for two years but CAN has employed Nepalese engineers and Nepalese assistants and the work will be led through them. It’s almost like I’ll be holding their hand to start with and pushing them in the right direction, but they will gain confidence from that and eventually take the lead themselves.” With the monsoon season coming to an end in Nepal, reconstruction can finally begin on the CAN nominated projects. During Glyn’s most recent visit in December, seven months on from the earthquakes, he spent time assessing potential rebuild projects and analysing further damage following the monsoon season. The WYG team also took the opportunity to revisit some of the sites and looked at plans to start major reconstruction works over the coming months. This is where local businesses and people can play their part. “In Nepal there are lots of local engineering businesses that have taken advice from other countries on seismic design, and there’s a lot of sharing of ideas, information and knowledge,” says Glyn. “If NGOs develop something good that’s working in terms of design, then they freely share these designs around. For example in terms of village design, they might print off laminated picture diagrams of the printable designs to give to the villagers because they’ve got to rebuild their own houses. One of the things

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Top: Meeting with villagers and school teachers at Lapcha School Above: Welcome from children at Milareppa, Helambu region

we’re currently looking into is building workshops where the villagers are invited to learn skills and simple design practices to make their houses safer.” It is clear there is still much to be done, and a huge amount of work lies ahead for the people of Nepal and the organisations supporting them. However with companies like WYG sharing their skills and capabilities with local businesses, Nepalese communities will have a better chance of surviving should disaster strike again.

Further information www.wyg.com

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Met Office

The changing climate is adding to the pressures on our fragile planet and increasing the risk of extreme and dangerous weather. Floods, droughts and storms are putting pressures on lives and livelihoods, agriculture production and economic performance

Collaborating for Resilience and Prosperity

nvironmental risks are intensified by growth in population, urbanisation and our reliance on interconnected and vulnerable technologies – making accurate hydrometeorological information essential. There is a growing recognition that the reality of climate change requires services that help people around the world adapt to the changing environment and mitigate its impacts. No individual, organisation or nation can address this alone – only by bringing together skills and expertise from a wide range of disciplines and perspectives can this challenge be overcome. The Met Office, the United Kingdom’s national weather service and global centre of excellence in weather and climate science, is already working with a large network of partners around the world in collaboration and knowledge sharing. How can communities, governments, industries, businesses and national meteorological and hydrological services around the world become more resilient to the effects of the changing weather and climate and extremes? The Met Office believes

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the answer is to combine the latest scientific knowledge with advances in technology and local understanding.

Supporting sustainable development The Met Office has a strong track record in supporting countries around the world to deliver effective weather and climate services. Met Office International Development services range from institutional strengthening and capacity development, user engagement and service development to the application of weather and climate models. These services are essential in dealing with the impacts associated with changing weather and climate variability and extremes. They enable nations to be better prepared and help protect critical national infrastructure, well-being, resilience and prospects for growth. Drawing on scientific and operational strengths, experts at the Met Office work with partners such as national hydrological and meteorological services, non-governmental organisations and national governments, to offer practical advice and

Above: Tropical downpour over the sea in Thailand Right: Becky Beckett, one of the Met Office’s International Expert Meteorologists, working with a representative from the National Centre for HydroMeteorological Forecasting in Vietnam

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specialist weather and climate consultancy services. One example of this collaborative work is enhancing tropical cyclone and heavy rainfall forecasting with the Philippine Atmospheric, Geophysical and Astronomical Service Administration (PAGASA). As Julian Menadue, Senior International Development Manager at the Met Office explains: “Typhoons are one of the most dangerous natural hazards to people. They can cause considerable loss of life and damage to property, as we saw with Typhoon Haiyan in 2013. “Following Haiyan we have been working closely with PAGASA to help enhance their scientific and technological capabilities. Together we have created a complete modelling, forecast, guidance and impacts service for the Philippines. “When Typhoon Hagupit reached land in December 2014, many lives were saved as a result of improved weather warnings and forecast information as well as consistent communication of the weather event to the Philippine Government. A key part of this project was a Severe Weather Events training programme for PAGASA, civil defence and media delegates.’’

Training from the Met Office College Another example of how the Met Office is working with people around the world to manage the impacts of weather and climate is the Met Office College. The College has provided meteorological tuition for over 75 years and has earned a reputation for world-leading training. Flexible as well as experienced, the College offers training anywhere in the world, including its dedicated training facilities at the Met Office head office in the UK. Topics range from professional weather forecaster and observer training, which conform to World Meteorological Organization guidelines, to short courses that help people better understand and interpret weather information or recognise the likely impacts of climate change. Scheduled courses are provided as well as bespoke training, as Sally Wolkowski, Head of the Met Office College, describes: “Our trainers are experienced meteorologists and climate scientists so can provide the best possible advice, tuition and

Met Office

support. The training team has extensive experience of delivering bespoke training projects all over the world including Nigeria, South Korea, The Gambia, Rwanda and Brazil. “We train a wide range of people from around the world, including those from meteorological service providers and research bodies to public sector and industry delegates. We have delivered training in a range of non-standard locations including the galley of an icebreaker moored in a Finnish fjord and an oil rig in Trogir, Croatia.”

Services to industry With forecasting capability ranging from the seabed to the top of the atmosphere and right across the globe, the Met Office supports a variety of industries, from insurance to renewable energy. Accurate and reliable weather intelligence enables businesses to operate safely and efficiently. For example, around the world, airlines are estimated to save £2.7 billion a year by using Met Office forecasts. Providing services to the marine industry for over 150 years, the Met Office has a Marine Centre of Excellence at Aberdeen in the UK, which has worldwide capability. With in-depth understanding of how weather impacts the marine industry, the Met Office provides expert consultancy and services to support decision making through all phases of offshore operations. This helps businesses around the world to plan, construct, operate, maintain and decommission effectively, safely and profitably. Offshore consultancy services include bespoke analyses, studies and opinion work. This might incorporate guidance on capturing and using metocean data, mapping marine climate, oil-spill modelling, regional affects of sea-level rise, or shifting seabed temperatures for subsea pipelines. Expert witness services are also provided for legal or insurance cases. Through a long involvement with the oil and gas industry, and by gaining local knowledge through collaboration in different countries, the Met Office continually transforms its services. For example, a new collaboration between the Met Office and NiMet, the Nigerian Meteorological Agency, has made metocean weather products and services available to the Nigerian offshore oil and gas industry. The alliance draws on the Met Office’s extensive meteorological, training and commercial experience, as well as NiMet’s national meteorological archive and unrivalled local knowledge. Through the partnership the Met Office and NiMet are able to provide the best possible service, which demonstrates the Met Office’s commitment to providing relevant high quality products and services to customers anywhere in the world.

Further information For the latest weather and climate news from around the world follow @MetOfficeww on Twitter. To find out more about the Met Office, go to www.metoffice.gov.uk/services or email enquiries@metoffice.gov.uk

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Arcadis

Qatar emerges as built asset wealth world leader per capita

Qataris replace Singaporeans as the richest built asset population, with a built asset wealth of US$ 198,000 per capita, says Alan Richell, Head of Business Advisory in the Middle East at Arcadis

atar has become the worldâ&#x20AC;&#x2122;s richest country per capita measured by the value of its built environment according to the latest Global Built Asset Wealth Index published by Arcadis, the leading global Design & Consultancy firm for natural and built assets. Qatar has become a global leader, toppling Singapore as the most asset rich country per capita, with built assets of US$198,000 for every citizen. The index, which was compiled for Arcadis by the Centre for Economics and Business Research (Cebr), calculates the value of all the buildings and infrastructure that contribute to economic productivity in 32 countries, which collectively make up 87% of global GDP. The health and wealth of a nation can be measured in many different ways and while factors

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such as GDP or employment have great value, a prosperous society is underpinned by a welldeveloped built environment that meets the needs of its people and economy. Today, Qatar has the fastest growing construction industry in the GCC, rapidly expanding at an annual rate of 18%, and this is expected to continue for the next decade. This growth will be underpinned by a number of large investments in infrastructure programmes. Qatar and Singapore stand comfortably ahead of the pack on built assets per capita, at US$198,000 and US$192,000 respectively. The countries near the top of this ranking are disproportionately made up of smaller nations, either by population or area, so the density of the built asset stock is much greater per resident. The UAE for example also came in high at number five with a strong built asset per capita at US $140,500, whereas Saudi Arabia has a smaller built asset stock per capita, at US$107,000 where its built asset wealth is spread amongst its large and growing population. The 2022 FIFA World Cup and Qatarâ&#x20AC;&#x2122;s 2030

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National Vision are driving huge infrastructure investments over the next ten years. These include plans for further investment in transport infrastructure, water and electricity in the next five years, by 2020. Qatar’s total built asset stock has grown 677% since 2000 and will continue to grow at double digit levels for the foreseeable future. Total built asset wealth globally now stands at an estimated US$218 trillion, which is the equivalent to US$30,700 per person alive today. The stock of built assets is closely correlated with a nation’s economic output. On average, countries analysed have a built asset stock worth 2.9 times GDP. China now has a built asset wealth of US$47.6trillion, overtaking the USA which comes in second place with a wealth of US$36.8trillion. On a regional basis, Saudi Arabia has a built asset wealth of US$ 3.15 trillion, while the UAE and Qatar rank respectively at US$ 1.33 trillion and US$ 0.45 trillion. The Global Built Asset Wealth Index shows a dramatic shift of wealth to emerging economies. Saudi Arabia and the UAE will continue to climb due to their especially high rates of investment. Whilst still heavily dependent on oil and gas export, the GCC states have used resource revenues to make initial steps towards diversification of their economies in sectors such as tourism, financial services and education.

About the study This research, conducted by the Centre for Economics and Business Research and based on over 20 independent global sources, calculates the value of the buildings and infrastructure in 32 countries, which collectively make up 87% of global GDP. Built asset wealth was broken down into construction (including infrastructure) and machinery and equipment and forecasts were made of stock increases and depreciation. To forecast the composition of investment, or fixed capital formation, Cebr established

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Arcadis

econometric relationships in each of the countries within our sample to estimate its evolution over the forecast horizon. For each country this required an assessment of investment growth in constant purchasing power parity adjusted to US dollars, the composition of investment, the depreciation of the existing stock and the rate of population growth. To forecast the depreciation of the existing stock an average service life for each of the components of fixed capital formation (residential and non-residential construction and machinery and equipment) was established, based on an extensive literature review. This works out around 14 years for assets of machinery or plant and approximately 70 years for construction assets. The rate of depreciation in each economy depends on the ratio between these two quantities in its overall stock of assets. The first Global Built Asset Wealth Index was published in 2013. For further information on Arcadis’ Built Asset Wealth Index, including the full per capita ranking, and regional breakdowns, please visit the Arcadis website: www.arcadis.com/ builtassetindex Arcadis is the leading global Design & Consultancy firm for natural and built assets. Applying our deep market sector insights and collective design, consultancy, engineering, project and management services we work in partnership with our clients to deliver exceptional and sustainable outcomes throughout the lifecycle of their natural and built assets. We are 28,000 people active in over 70 countries that generate more than €3 billion in revenues. We support UN-Habitat with knowledge and expertise to improve the quality of life in rapidly growing cities around the world.

Further information www.arcadis.com

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Vector Consultants

Culture club

From building a government to helping with baggage, Alan Stevens of Vector Consultants believes understanding the people and identity of an organisation can be crucial to its success

o understand the culture of an organisation is to understand the organisation itself. This culture affects every member of staff, from the boardroom down to the junior employees, and impacts how business is carried out on a daily basis. Often companies can espouse their mission statement or projected values, but this does not necessarily equal the true identity of the organisation. Culture within organisations links departments, strategy and major issues and the comprehension of it can hold the key to success. Vector Consultants are experts in organisational and national culture, and have worked across the globe helping organisations evolve their complex systems in the light of cultural analysis. This understanding can lead to a successful merger, increased efficiency or a smooth change between systems. Alan Stevens, Director of Global Consulting at Vector, is convinced that the majority of issues can be comprehended by considering how the staff interact with each other and the systems around them.

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Vector Consultants not only work with large multi-national companies but also governments and ministerial organisations across the globe. One of the more fascinating examples of their work was in Macedonia in 1991 after the break up of Yugoslavia. The new nation was formed very quickly, and as such it did not have the infrastructure in place to deal with the numerous problems that a new nation faces. Macedonia has three distinct ethnic groups, the Albanian, Serbian and Roma population, and there was a worry that without a functioning judicial system there would be significant civil disruption between them.

Thoroughness Funded by the US government, Vector helped to establish a Macedonian Ministry of Justice that was impartial to each of those ethnic groups. Alan Stevens, who worked on the project, emphasises the importance of the work. â&#x20AC;&#x153;We had to work very quickly to prevent the wrong people from filling the vacuum of authority. We were determined to create a judicial system based on equality and fairness, which did not treat the different ethnic groups differently. The best of the British system was utilised, but we also considered the traditional culture of the region as well.â&#x20AC;?

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Infrastructure View on Stone bridge from Oko bridge in Skopje, Macedonia

Vector Consultants

trying to understand their work.” The whole research process takes a maximum of six weeks to stop staff from becoming cynical and to ensure that their opinions have a direct impact on the changes. The work Vector undertook in Macedonia was a great success, and as such the Ministry has become a benchmark for countries facing similar issues. Since then Vector has replicated its success across the globe, particularly in the Middle East where Vector has helped the governments of both Yemen and Saudi Arabia. “Saudi Arabia has a very young and emerging population,” says Alan Stevens. “The leaders recognised that their ministries needed to be strengthened in order to utilise this new work force so wider society could benefit from the wealth in the country. Part of our role was diagnostic; part coaching the staff and developing the ministries.”

Better understanding

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Thoroughness is key in any attempt to fully understand the culture of an organisation. This typically begins with a series of interviews, focus groups, observations and document reviews to truly understand what makes an organisation unique. Vector makes a conscious effort to interact with every member of staff, not just the decision-makers and Directors. “We try and meet as many people as time allows,” explains Alan Stevens. “We feel that the more people contribute to the process then the more interventions and improvements can be made throughout the organisation. People care passionately about the organisation they work for, and so are very receptive to an independent person

ALAN STEVENS Alan’s expertise lies in bottom line improvements to corporate results. He has an extensive background in organisational diagnostics, alignment, leadership and change management. He is also a national culture expert, specialising in mergers & acquisitions, and has worked on major organisational projects for global blue chip companies for over 25 years.

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This focusing of managerial practices is not restricted to governments but can be extended to commercial entities. Emerging markets need expertise to flourish, and South-East Asia is one of the most exciting emerging markets on the globe. “At the moment we are working to increase organisational efficiency and effectiveness, particularly in managerial roles. The response has been absolutely fantastic; they soak up every piece of knowledge and apply it in the workplace.” Vector has been working closely with the delivery company TNT in the region. “We try and bring some consistency to how their diverse locations operate. The particular focus is how they can negotiate and operate more effectively with the airlines and airports to drive greater benefit for the company, particularly after their acquisition by FedEx.” This project by Vector further highlights the thoroughness of their work. “As part of the diagnostic process I spent the night with some of my colleague and the team unloading parcels and packages from the aeroplanes. To fully understand a company and their staff we have to live their world.” Culture can often be something of a fluid word, with the boundaries between cultures far from clear-cut. Predominantly Vector is emphasising that organisational and commercial success can be found through a better understanding of people. An organisation has a working culture, but the culture of the nation in which it is based always plays a significant part in influencing how business is carried out. The assumption of practices is very dangerous when analysing any organisation, particularly in the complex and ever evolving world we now live. “There can be extreme granularity within organisations. For example, when we were working for General Motors in the US you could not know before you entered if a factory was going to be Afro-Caribbean, Hispanic or Asian in culture. Getting to know the staff and challenging cultural assumptions is key to adding value.”

Further information www.vector-consultants.com

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| Global Opportunity 2015

Atkins

Creating better journeys Technology and data will help us improve transport systems and create seamless end to end journeys, says Graham Bolton, Aviation Director, Atkins

study by investment firm Nutmeg showed that over our lifetime we spend on average 10,634 hours (or 443 days) travelling to work. For people in large cities this figure is even higher, with London residents clocking up a staggering 13,097 hours, or 18 months, average commuting time over their lifetime. If you add on top of this the time we spend travelling for leisure, we end up spending an awful lot of our precious time travelling from one place to the other. So how can we help get people from A to Z quicker, and without compromising safety or sustainability? Providing a better journey for passengers is a top

priority for us at Atkins. We care about improving people’s journey, whether that’s a quicker commute, safer travel on the road or a hassle free trip through the airport. As we plan, design and enable the operation of transport infrastructure across the world, we are developing and applying new technologies and processes to deliver better solutions. There are two great examples – intelligent mobility and passenger management – of where we’re using technology and data to help improve people’s journeys by road, rail and plane.

Intelligent mobility Intelligent mobility looks at how we connect people, places and goods across transportation networks, and apply a combination of systems thinking, technology and data at every point to inform decision making and change the way people behave

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Transport

Atkins

GRAHAM BOLTON Graham has nearly 25 years consultancy experience within the transportation and industrial sectors, with particular expertise in the strategic planning of operational processes and systems and in the establishment of associated capital development strategies. His experience within the aviation sector includes strategic planning and development projects for major international airports across North America, Western and Eastern Europe, Middle East, East Asia and Australasia.

ATP Gates at Heathrow IMAGE COURTESY OF HEATHROW AIRPORT LIMITED

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| Global Opportunity 2015

Atkins

Transport

Atkins

VENTURER Wildcat car

and enable a positive customer experience. Connected Autonomous Vehicles (CAVs) and the related research project VENTURER are two things Atkins is currently working on to help make intelligent mobility a reality. We recently released a report on CAVs looking at how their adoption can improve efficiency, safety and road design, and reduce congestion and emissions. The ‘Connected and Autonomous Vehicles: Introducing the future of mobility’ report urges UK cities to prepare their infrastructure to better support CAVs – fundamentally changing how people move and interact with their surroundings. Atkins is also part of the VENTURER consortium, a group of cross sector experts working together to trial autonomous vehicles in Bristol and South Gloucestershire and explore the feasibility of driverless cars in the UK. The trial is being part funded by Innovate UK to investigate the legal and insurance aspects of the new technology and explore how the public react to such vehicles. The VENTURER trial will run for 36 months, with testing of the consortium’s autonomous vehicle, the BAE Systems Wildcat, on private and public roads starting in early 2016. Ultimately Atkins is pushing intelligent mobility so that we can help improve our transport system and create truly seamless end to end journeys for people, goods and services. This will enable access to things like health, education and businesses, and be a driver for economic growth, reduced congestion and improved air quality.

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Passenger management Atkins is also developing systems that improve the passenger experience when using an airport. We have worked with Heathrow developing the Passenger Authentication Scanning System (PASS) to reduce queues at airport departures and help airlines get their planes off the ground quicker. This starts with self-service gates at the entry to security. Passengers are given live updates on their flight with messaging configurable by airline, detailing gate allocation and time remaining to departure. Airlines are also given up to date reports on the passenger’s location to help them better manage the boarding process. We have also integrated biometric facial recognition into PASS to secure operations where both international and domestic travellers share the same terminal. This biometric approach is also used to enhance the self-boarding process, ensuring that the passenger who boards is the person who was issued the ticket. We are now able to make this identity management approach available at any touch-point to further improve airport throughput and service levels. Through projects like passenger management and intelligent mobility, we are starting to see a real difference in the way people travel. In future, maybe we’ll even see a drop in those precious 443 days people are spending on commuting.

Further information www.atkinsglobal.com

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British Aviation Group

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Airport expansion

The demand for global airport infrastructure is rapidly expanding and requires consistent upgrading to correlate to the speed of current technological progress. So there have never been more opportunities for UK expansion of capabilities and services, says Chris Chalk, Chairman at the British Aviation Group (BAG) 72

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Transport

British Aviation Group

CHRIS CHALK Chris Chalk is the current Chairman at the British Aviation Group. With over 20 years’ experience in the aviation industry, Chris is also the Aviation Practice Leader at Mott MacDonald, specialising in the the policy development, financing, planning and design of more than 90 airports in more than 50 countries. His expertise ranges from airport privatisation, concessions working for vendors, investors, regulators and lenders to the development of affordable business cases and the concept of value proposition. Consequently his primary role at BAG is to help UK companies to win business in airport and airport developments in the UK and overseas.

Guangzhou Baiyun International Airport, China

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ith a predicted 10 billion passenger movements per annum by 2025 and the global retail market marked to rise by over 72% since 2013 to US$59.2bn by 2019, the potential for UK companies is huge. In the UK we truly appreciate a challenge and this has been evident in the airport sector. To ensure the UK operates effectively, weʼve had to continuously solve difficult problems while working within existing entrenched infrastructure. As such the UK is home to innovators who tend to think laterally, utilising knowledge from across all sectors of industry to facilitate solutions to contemporary problems. A recent example is Heathrow Airport. Whilst the airport has not had any new runways built to ease the pressure on its services, it has had to deal with an exponential growth in traffic, radical developments in technologies as well as significant changes in the way protocols and new rules are followed e.g. the evolution of airport security after September 11th. Further afield, Istanbul and Dubai are both trading centres with Istanbul traditionally the largest in the region, acting as a crossroads between key markets of Europe, the Middle East and Asia. The challenge here is to ensure movement around Istanbul with improved infrastructure that accompanies the expected rise in the number of passengers passing through the airport and the city in general. Again, UK expertise in working around existing infrastructure positions us to take advantage of commercial opportunities such as these. Additionally one of the most visible advantages of aviation is the reduced infrastructure thatʼs required en route between destinations. Compared to other modes of mass transport such as rail, to build a route from A to B in aviation, all that is required would perhaps be a new control system. The aviation industryʼs focus remains instead on developing upon the existing infrastructure at point

Issue 02

| Global Opportunity 2015

British Aviation Group

A and B, with collaborative relationships with airlines proving pivotal to success at either port. Moreover, there is a whole supply chain that works together to ensure optimum success at these points of transit. As such, airports are keen to engage positively with every level of the UK supply chain, giving them a competitive advantage whilst ensuring optimum operational efficiencies.

Environmental and commercial challenges Whether we like it or not, the salient fact is the aviation industry currently has to burn fossil fuels, with the question of sustainability naturally entering the conversation. Whilst the industry understands the importance of their emission contributions, it remains fairly small, hovering around 2%. This is in part aided by the progression of fuel-efficient technology or modern day aircraft, with new generations using roughly 20% less fuel. Due to our industryʼs heavy dependence on the price of fuel and its power to guide the profitability of airlines, legislation such as the Climate Change Act 2008 imposes carbon caps on industries like aviation. Whilst important, these are only part of the reason why weʼre striving to make fuel efficiencies a top priority. To ensure success in the industry generally, fuel efficiency is a commercial necessity as well a moral imperative, with next generation aircraft like the Boeing 787 Dreamliner and the Airbus A350 significantly more fuel efficient than their predecessors. Moreover, we must consider the positive contribution of air travel to the fabric of modern day society. The argument that you should stop people flying completely to solve our problems from an environmental standpoint is not a reality. Aviation is part of our social cohesion. Whilst the Anglo- Saxon mentality of doing business has evolved to a more virtual system of conference calls and emails, in our major markets the face-to-face business manner of doing business remains. With more being achieved from these types of dealings, the industry is bringing people closer together in more tangible ways than previously. If one were to compare the aviation sector to the rail sector, a 4,000 metre runway can connect to virtually every location in the world whilst a 4,000 metre railway goes 4,000 metres. This highlights the power of interconnectivity of the airline industry in both the commercial and social spheres. A recent study in South East Asia found an increased presence of low cost carriers operating out of Singapore which actually brought down pricing to a level where Indonesians and Malaysians were able to visit Singapore, where the offer of retail remains extremely attractive. Whilst these economic benefits are advantageous for the region, the net benefit of socialisation between the younger generation holds equal promise for societal cohesion. As this age group travels the region with increased ease they can learn from each other, understand and appreciate the similarities they share and increase the social capital present between members of the next generation of decision makers and politicians. This has the power to benefit all members of our global society.

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Role of BAG and the UK Although there are further risks when operating outside of the UK, it is extremely important for us to utilise our international skill set and seek opportunities in the airport sector globally. BAG has successfully run outward missions to U.A.E and China among other key markets, as well as hosting inward missions where we present ourselves to clients in the international market. Perhaps surprisingly, UK companies tend to be more cautious and less aggressive in the manner in which they sell their services internationally. This trait may be to our disadvantage if we chose not to pursue international opportunities to the same degree and intensity as our competitors at all levels of the supply chain. The members’ directory at BAG as well as our contacts at UKTI offer knowledge that can illuminate where these lucrative opportunities for UK companies lie; a knowledge most effectively shared from meeting and networking with crucial members of our industryʼs supply chain. Groups like the BAG increasingly bring together companies that have historically competed, to work together and work together well. In Hong Kong for instance, Mott MacDonald, Arup and Atkins have teamed up together to take on the demands of building a contemporary airport.

Right: Interior of Indira Gandhi International Airport, New Delhi. Below: Heathrow Airport Terminal 5

‘We must consider the positive contribution of air travel to the fabric of modern day society.’

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Transport

British Aviation Group IMAGES: WWW.SHUTTERSTOCK.COM

Although these three multinational companies would have been able to perform independently, they chose to build a consortium that ensures they have a compelling product that fulfills all that the customers wants. By no means does this eliminate the natural element of competition in the airport sector, but instead ensures that the rich diversity of quality that is present within all UK industrial sectors is pooled through this meeting of minds, resulting in an optimum product for the client. As a rule, the British tend to think internationally, are skilled at travelling and operating at this level and appreciate cultural sensitivities when conducting business overseas. As such there are BAG members providing their services or products in the top 60 international airports of the world. Explanation for this success is simple. The UK is at the forefront of pioneering the most effective practices, with security a UK sector showing immense promise for international development, with new security technologies and practices being far more advanced and thorough in the UK than anywhere else in the world.

whose strong growth rates are affording their citizenry a means to fly. Take India as an example. With a national GDP growth rate of 7.3% in 2014, their accompanying aviation industry is widely regarded as the fastest-growing aviation market on the planet with an array of low cost carriers emerging to fill the demands from an increasingly fiscally able population. This has enabled workers to go home more frequently and directly increased the social mobility of a huge swathe of the Indian workforce. In neighbouring China, the government始s 12th Fiveyear plan has set an increase in the total number of airports in the country from 175 in 2010 to 230 in 2015. Therefore UK companies始 international mindset and expertise in the airport sector generally offers exciting opportunity for an aggressive expansion to correlate to market opportunities such as these. With the help of the BAG members and our commercial partners overseas, we can build upon our present success internationally, bring our lateral thinking skill set more deeply into the global airport sector as we continue to punch well above our weight.

The future growth opportunities There始s a very strong relationship between GDP per capita and the rate at which people fly. With this strong correlation, there are developing countries

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Further information www.britishaviationgroup.co.uk

Issue 02

| Global Opportunity 2015

Public-Private Partnerships Unbundled John Davie of Altra Capital has been devising PPP strategies for more than 20 years. In this invaluable handbook he demystifies the process and provides expert guidance at all stages.

The PPP Book is considered to be one of the definitive guides to the multifaceted and integrated ecosystem required to deliver successful PPP projects.

www.pppbook.co.uk

Railway Industry Association Railway Industry Association

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Transport

Tracks to success Neil Walker, International Development Director at the Railway Industry Association, explains why British companies are in demand for new rail projects around the world

ith so many rail projects under way in different parts of the globe, UK companies seem to be very much in demand. The Railway Industry Association (RIA), the representative body for UKbased suppliers of equipment and services to the world’s railways, provides advice and intelligence not just for its large member base, but for UK

companies as a whole when working as a UKTI Trade Challenge Partner. Neil Walker, International Development Director at the RIA, is confident that not only large companies but also SMEs have a lot to offer as countries look to upgrade their systems and install new and innovative ones. Neil, why are UK companies so in demand?

One of the reasons is privatisation. The UK rail industry has gained a great deal of experience in running and building railways since privatisation. These are private sector companies that innovate and look towards whole life cycle costs. A British company will come to a project and by talking to the client will understand local needs, then adapt using technologies and experience they’ve learnt in the UK and around the world. It’s important to

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Issue 02

| Global Opportunity 2015

Where are the big opportunities in rail at the moment?

Certainly in the Middle East - the GCC railway linking Kuwait, Bahrain, Qatar, Oman, U.A.E and Saudi is more than 2117 double track network length. In Saudi Arabia they are building five metro systems at the moment, some at more advanced stages than others; Riyadh is building a six line metro system, Jeddah and Mecca are building a four line metro system and there are aspects of light rail in this Medina is building a five line and Dammam will eventually build a two line system. There is also much activity in the Asia Pacific region. LTA in Singapore are extending their system; there are the Klang Valley Projects in Malaysia along with the High Speed Rail Line linking the two countries. Bangkok is also looking at extending and the Philippines are reopening rail routes and looking at metro lines. Which is the big growth area?

High Speed Rail and Metro systems are the two big growth areas, and where the UK has considerable expertise and can offer solutions. One of the difficulties that organisations face is that rail is vibrant across the world so engineering skills

NEIL WALKER Neil is the International Development Director at the Railway Industry Association, and has been in the role for nearly two years. Working closely with UK Trade & Investment as a Trade Challenge Partner, RIA organises a number of rail-specific activities which are open to all UK companies. He was previously Senior Trade and Investment Manager at the British High Commission in Singapore for nearly five years, and prior to that held various posts with the Foreign and Commonwealth Office for 17 years, both at home and abroad.

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are in great demand. We need to make sure that companies are aware of the opportunities, so they can allocate the resources to tender. Who are the UK’s main competitors?

There is a great deal of risk involved in building big projects, so we do see a lot of large overseas companies, the Koreans for example, doing this. In Europe you see healthy competition from many high tech companies, but it’s an international industry and companies often combine outputs from several countries, so it’s not quite as clear cut.

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Railway Industry Association

understand what’s going on in the market and the client’s needs. The UK is very good at front end design. Our consultants are incredibly busy all around the world as is our quality supply chain that follows. Don’t forget that when it’s built you have to maintain it, so Condition Monitoring and Asset Management are other key UK strengths. We have first class universities, bringing out first class engineers. They also train foreign students as well and we now have the National Skills Academy for Rail (NSAR). The Railway Supply Group is an initiative supported by the Department for Transport and Department for Business Innovation and Skills that aims to strengthen the capabilities and competitiveness of the UK railway supply chain to grow business at home and abroad. So these are all initiatives that the UK has taken forward to help our engineers, and by default our companies remain innovative, competitive and strong.

If UK engineers and planners are involved at the outset of a project like for example the Etihad rail project, does that mean we’re more likely to win business for that supply chain?

The organisations that provide this advice for overseas governments or contractors as consultants will act independently, so they would not be linked to the UK supply chain. Obviously what tends to happen is that these organisations will specify first class solutions and by default a lot of British companies will offer the equipment needed for those first class solutions. The key is remaining impartial - they will specify the output but British companies will often have the capabilities and products to meet the requirements. Is this a global renaissance in rail, do you think?

In a way it is. Governments nowadays are realising that a good quality rail system is sustainable, cleaner, more energy efficient and is obviously a mass transit system. So as you tend to see roads being gridlocked around the world, a rail system helps to unlock those roads in a clean sustainable manner - long may it continue. How do governments and rail contractors overcome the challenge of getting people onto the railways in the first place?

One of the things you’ve got to consider is interoperability and connectivity. It’s very important that you have a first class modern transport system in a city. While obviously a good efficient metro and commuter system is important, it’s also about linking those with an efficient bus transit system, good interchanges and where appropriate cheap parking at railheads. If we look at modern stations and metro stations nowadays they are also good community business areas; there are lots of shops going into these as well so people don’t necessarily need to take their car on a separate shopping journey. In Hong Kong, the lines are partly financed by development so the shopping centre, residential areas and other facilities are all clustered around a station.

A Southeastern High Speed Javelin Electric Multiple Unit at Broadstairs Station. These trains provide a fast commuter service from East Kent to London

How do the challenges and the styles of putting projects together differ from region to region?

The local work force, for example in the Middle East, may not have had many opportunities to be involved in rail projects so training the work force is one thing. Different business practices, local

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Transport

culture and local business practices is obviously a key aspect and what you’d want to see in an ideal market in transparency. Obviously UK companies are governed by the bribery act which is a very positive thing. If you’re working with a UK company you will know that company is dealing in a transparent and honest manner. Many projects involve large consortia. How do they come together and how do British companies get involved in some of these consortias to create these larger projects?

Some companies may have already worked together so they will form a consortium or they will take the lead, probably the main contractor, and then seek to find business partners to join the consortia. How important is UKEF [UK Export Finance] in perspective of getting UK companies involved in rail projects?

It’s an important government department and the word needs to get out more that their services are

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Railway Industry Association

available. We want to encourage rail companies to take up more of their offers as they are very keen to work with rail companies and do more. How do smaller companies become involved in overseas projects?

The traditional route is by having a local agent or partner, or by working with tier 1 suppliers. The other way is to visit the market and talk to the Authorities . A lot of SMEs tend to have innovative products that are appealing so sometimes you need to go and visit the market and build that relationship. RIA as a UKTI Trade Challenge Partner runs trade missions. We’ve been involved in approximately 30 exporting events in the last 14 months. We also administer a grant scheme for UKTI called the Tradeshow Access Programme, which helps SMEs visit trade fairs. For example, we are taking a pavilion at Middle East Rail next March with 40 companies, and have 20 grants available worth £2,500 for an SME. We will also have 2 or 3 pavilions at InnoTrans which

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Transport

Railway Industry Association

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Railway Industry Association

Railway track maintenance

is a major trade fair in Germany. It’s important to mention that the work we do is not just open to members but it’s open to all UK companies. How else can you help UK organisations who want to get involved with some of these projects around the world?

We supply our members with considerable marketing intelligence, but other companies can access opportunities via the UKTI Portal. It’s not just projects though. Remember that a railway involves a great deal of ongoing work, consumables, maintenance etc, even when a system is not expanding. So there’s a large amount of general supply going on everywhere that has a railway along with continued requirement for asset management. RIA has a membership of around about 200. There are familiar names, like Atkins, Balfour Beatty, Bombardier and Hitachi. But there are many smaller specialists too, often with world-leading innovative products. As well as manufacturing members offer professional services, for example planning and designing, to software and legal, covering everything from feasibility studies to pedestrian management. How big can rail can get around the world?

In terms of the UK, we’re on the biggest rail modernisation programme since the Victorian era. More people travel on UK railways than ever before. Rail freight is up by 75% since privatisation and Britain’s railways are among the safest in Europe. Passenger numbers are increasing all around the world – part of it is about getting people off the

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‘Our aim is to help more UK companies export and to try and help the government achieve its targets.’ roads, but rail is also a sustainable safe way of transporting people around. As population increases, governments will look at ways to try and make sure cities don’t become gridlocked and rail is a perfect solution in our opinion. There are even personal ‘pod’ systems being developed, with the first in use at Heathrow. So the UK has innovative companies and innovative solutions, and we think that skills we’ve learnt here and abroad are ideal to help governments overcome these issues around the world. It’s a good time to be in rail and there many markets around the world that provide ample opportunities, so companies have the luxury of deciding which markets they want to pursue. But obviously our aim is to help more UK companies export and to try and help the government achieve its targets.

Further information www.riagb.org.uk

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BOXARRTM

Simplifying the complex BOXARRâ&#x201E;˘ software allows sophisticated interdependent systems to integrate seamlessly, say CEO Alasdair Pettigrew, and Dr Robert Smith, Chief Scientific Officer

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Transport BOXARRTM IMAGES BY ALASDAIR PETTIGREW. TAKEN AT LE BOURGET PARIS AIRSHOW 2015

IMAGES BY ALSDAIR PETTIGREW. TAKEN AT THE FARNBOROUGH 2014 INTERNATIONAL AIRSHOW

n an increasingly technology-based world, the aviation industry ranks as one of the most complex. With sophisticated supply chains, individualised systems and ever more demands on aircraft performance, manufacturers are turning to one-stop software systems to manage the different processes in order to speed up production. In 2003 BOXARR™ (formerly Plexus Planning) founders Professor Jim Scanlan of Southampton University, Dr Robert Smith of University College London, and Ian Poccachard of Rolls-Royce identified fundamental weaknesses in current process and programme management tools for large and complex projects. They used their combined experience in industry and research to develop the concepts for a solution to these deficiencies with BOXARR™. The BOXARR™ solution has been implemented

ALASDAIR PETTIGREW Alasdair has extensive experience in business development, and has a passion for helping clients improve their ability to innovate and enhance their competitiveness, through the use of the latest IT solutions to improve the ‘manufacturing-to-delivery’ process. He joined BOXARR™ from IBM where he was Business Unit Lead for the Rational Systems Development tool-set and gained 15 years experience of the challenges of delivering complex systems in aerospace, defence, electronics and automotive industries. He has a degree in Engineering and worked initially in aerospace, where he worked on miltary aircraft design at BAE Systems.

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DR ROBERT SMITH Dr Robert Smith is Chief Science Officer, Senior Research Fellow, University College London (UCL) and President, RESystems Consulting. Dr. Smith conducts research and development efforts in complexsystems-based artificial intelligence, including evolutionary algorithms, machine innovation, knowledge representation, evolving agents, and cooperative computation. He is a former Director of The Intelligent Computer Systems Centre at The University of The West of England, and former Associate Professor of Aerospace Engineering at the University of Alabama.

Opposite: Dassault Rafale Above: Airbus A350

by many of the world’s leading manufacturers in the aerospace and defence industry including Boeing, G.E, Raytheon, Rolls Royce and the US Navy. “It’s what we call an InterDependent Systems Management Tool, a really complex system of systems that interact with one another,” says Rob Smith, now Chief Science Officer at BOXARR™. “On one level what BOXARR™ does is capture knowledge of subject matter experts. It is basically easy in, easy out, allowing data to be accessed from other data sources very easily. The second component of the tool is a built-in analysis framework, supporting many different kinds of analysis including schedule optimisation, critical path analysis and value chain analysis. The third layer is accessibility - the boxes and arrows approach that people draw on the back of napkins. “So you get this network visualisation that shapes itself, is easy to understand, doesn’t have all the fiddling in a PowerPoint document but at the same time does real calculation that’s turned into a real picture, and one that large organisations are using to support the complexities of their structures”.

Complexity in aircraft production According to Alasdair Pettigrew, BOXARR™ Chief Executive, complex products are becoming more complex. “The process of delivering products is becoming more convoluted as there is an increasing prevalence of software being key to the products’ performance, both externally and internally embedded within the product.” Offsetting also contributes to the wider equation as countries require that local content and domestic input be built in to large contracts. Add to this increased customer demand that drives complexity, and suddenly there are layers upon layers that

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IMAGES BY ALASDAIR PETTIGREW. TAKEN AT LE BOURGET PARIS AIRSHOW 2015

BOXARRTM

Transport BOXARRTM

require piecing together seamlessly to maximise profit and streamline processes. “A good example of this is in aircraft production,” Alasdair says. “The way complexity has increased is multifarious and the market place has changed - it used to be that everybody ordered pretty much the same plane, because planes were simpler inside with no entertainment systems and fewer classes of seats. You didn’t have the interdependence within the plane to the extent you have now. It was all mechanical and hydraulic, whereas now it is mechanical and electrical, all controlled by an integrated software system. “These days every plane is more or less unique. Add to this the production volumes - Boeing have 3 new aircraft every day coming off the line, as do Airbus, both up to 45 a month - with a global supply chain of tens of thousands of parts coming together to form an aircraft, meaning there is an enormous amount to manage seamlessly.” Boeing already uses the BOXARR™ system, both in supply chain and production, and Airbus has now rolled out the system live to map their supply chain. “When you move capacity from place to place it affects not just a single product but multiple products, so there may be an impact on key performance indicators that are above the single product level,” says Alasdair. “For example recently there was an earthquake in Japan and a fire in Spain. These potentially very disruptive supply chain incidents were solved within minutes where before it would have taken a couple of weeks to work out. So even just on the efficiency of the engineers and supplier managers there is an easy return on investment.” As the number of items on the supply chain increases - Airbus has four million and Boeing are looking at multiple-millions in the future - then the software has to be capable and adaptable. “I am really confident that complexity will not disappear over time; the problems we are dealing with are only going to get worse,” Alasdair thinks. In the aviation industry BOXARR™ currently has solutions for solving complexity in supply chain, systems engineering, process and project in the OEMs. But it can also see the benefit to large

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Above: Boeing 787-9 Dreamliner

infrastructure projects such as the Al Maktoum Airport in Dubai, the largest in the world. As Alasdair says, “Any big project has a scheduling problem, a mammoth and increasingly dependent system and a system of systems, for example modelling the flows of baggage around the airport to be as efficient and as effective as possible, modelling the flows of people round the airport, the supply chain of parts for maintenance as well. Everything starts to be controlled by software - lighting, heating, procuring, entertainment, security and you need to know what those interdependencies are. It’s a massively complex task that we feel we could monitor.” The US Navy has adopted BOXARR™ for the design process of ships in the preliminary phase and it is expanding its usage in a variety of ways as it has many complex interdependent systems and supply chains. “Soon energy plants on the ships will be critical to every system on the ship in a way it wasn’t previously as the Navy upgrades its weapons,” says Rob. “This also makes the design, human resources and ultimately the operation of the ship very complex and that’s where BOXARR™ fits in.”

Understanding the complexity of airports The company sends experts to the client to train up a team who will manage the systems. The team will also develop the widgets that are necessary to make the web tool component carry out its tasks. BOXARR™ plans to consolidate its work in the defence and aerospace industries before branching out to oil and gas, construction and automobiles. The distributor in Dubai is Exponentia Solutions and the company is hoping to demonstrate the capability of their systems soon. “If I were running an airport I would want a tool that allowed me to model and understand the complexity of the airport,” Alasdair says. “So far no airport has this tool, but when the first operator adopts it they will make a huge leap forward in the planning and modelling, as well as the running, of the world’s largest airport.”

Further information www.boxarr.com

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G4S

| G4S has been recognised as the top airport security provider in the prestigious Emerging Markets Airports Awards reflecting our strong presence in the Middle East region, says David Stockton, Chief Executive Officer of G4S UAE

Top Flight D

uring the recent fifth annual Emerging Markets Airports Awards (EMAA) conference held in Kuwait G4S won the prestigious Emerging Markets Airport Awards (EMAA) Airport Security Services Provider of the Year award. The EMAA panel assesses all airport security providers across India, Middle East, Africa and CIS, and nominations are sent for independent collation, auditing and verification. It is the first time G4S have won this award and it is a reflection of the excellent work done in these regions by G4S’ airport teams, further cementing its position as a leader in delivering airport solutions. With operations in six countries and a deployment of over 4,000 staff, the Middle East is a key location in the G4S global aviation footprint which serves over 200 customers worldwide. Each of the four major service lines that G4S offers across the business is in evidence across the region’s airports. From the traditional manned security and cash solutions to facilitation and electronic systems, there has been significant growth in recent years.

DAVID STOCKTON David Stockton is the Chief Executive Officer of G4S UAE. He is responsible for business in the UAE, overseeing 11,500 staff proving solutions in manned security, electronic security, cash processing and transportation, event security, facilities management, people recruitment and outsourcing. Before joining G4S, David spent six years as Chief Commercial Officer for Pourshins – Supplair, and worked for British Airways for nine years.

G4S has 20 different aviation customers and over 30 different service lines in the Middle East alone. For Saudi Arabian Airlines, G4S has more than 1,800 staff across six airports, making it the region’s largest aviation customer. Baggage handling, aircraft cleaning, wheelchair services, porters and cargo handling are just some of the services provided. The relationship with Dubai Airport, which commenced back in 2011, has now grown to over 1,000 staff, with the most extensive list of services, ranging from the ‘May I Help You’ customer assistance staff at every touch point, and also including pre-boarding document screening, trolley services, traffic marshals, baggage handling support, lost and found service and escorting of inadmissible passengers. Etihad Airways are the most recent addition to the list of aviation customers, with aircraft cleaning services being provided at Abu Dhabi Airport. In Qatar, G4S provides access control and customer service through a workforce that is now over 800 strong at Hamad International Airport, with cash services and escorting of valuable cargo also included. Manned security and Access Control / CCTV Security Systems operations in Kuwait, Oman and Bahrain complete the portfolio as it currently stands. In 2015, G4S launched its very own online General Security Awareness Training (GSAT) course, which provides an internationally recognised, convenient and cost-effective method of training staff from all airport companies in the basic understanding of security at airports. With ICAO Aviation Security Professional Managers, G4S has the international expertise to compliment its local presence.

Further information www.g4s.com

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Transport

G4S

Above: G4S was awarded â&#x20AC;&#x153;Best Airport Security Services Providerâ&#x20AC;? at the recent Emerging Markets Airports Awards (EMAA) conference held in Kuwait

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Universities UK International Unit

What can we teach the world? The International Unit is part of Universities UK, which represents UK Vice Chancellors, and is the definitive voice for universities in the UK. It provides high quality leadership and support to its members, to promote a successful and diverse higher education sector. It was established in 2010 because of a growing realisation that UK universities’ activities were increasingly international, so it exists to support UK universities in achieving their international aims. This is achieved by promoting British universities abroad, providing trusted information for and about them, and creating new opportunities through its ability to act at sector level. UUK runs a small number of specific programmes, including one to encourage UK students to study abroad, and administers several scholarship schemes on behalf of other governments around the word, including providing a very high-quality and individualised postgraduate support service.

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When did the IU begin to see demand from UK Universities to open up campuses or transnational programmes overseas?

TNE isn’t new: some universities have had transnational education style arrangements for over a hundred years. Some examples of long established overseas campus style provision include the University of London International Programmes (ULIP), which was incorporated into the University of London in 1969, the University of Nottingham Malaysia which recently celebrated its fifteenth birthday and Middlesex University Dubai which is ten this year. Much more TNE is delivered through partnerships, blended learning and distance provision than campuses. Whilst this is not a new phenomenon, UK TNE student numbers have grown by 65% since 2008 and the vast majority are studying for their first degree. The IUs ‘Horizon Scanning’ report published in 2013 predicted mass growth in TNE and that is already being realised. In order to support our sector to meet this demand the International Unit set up a programme called

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Universities UK International Unit

VIVIENNE STERN Vivienne Stern is the Director of the UK Higher Education International Unit which represents the UK higher education sector internationally. Prior to her role in the Unit, Vivienne was Head of Political Affairs at Universities UK where she was responsible for developing and implementing the political strategy for the membership body representing 134 UK Universities. She previously worked in the UK Parliament for the Chair of the Education and Skills Select Committee, and as a Policy Advisor for Universities UK, specialising in quality, student experience, innovation and university-business links. She is a graduate in English Literature from the University of Cambridge.

HEGlobal. This is a joint initiative between the International Unit and the British Council and was established to address the questions and challenges surrounding TNE. For me, one of the exciting things about this area is that the majority of transnational education is collaborative. That means that UK universities and universities from other countries are now working together on a considerable scale to jointly deliver higher education. That creates enormous opportunities to learn from each other and build on respective strengths. These, I believe, can play an important role in developing higher education quality and capacity in host nations as well as back in the UK. How does the IU ensure a high level of expertise is consistently present within the international work of the UK Higher Education Unit?

Our strength is in our networks. We are a relatively small team but we put a huge amount of our time and effort into building connections with the UK sector. We run a series of regional and thematic ‘Communities of Practice’ to help us understand the interests of people in UK universities who are trying to develop international activities, and the challenges we face. And we use these networks to create opportunities for people in the UK university sector to hear firsthand from experts and representatives of other university systems around the world. Overseas we work in a similar way – our energy goes into building relationships with people who are really knowledgeable and well connected in their own higher education systems. To give an example, we have recently developed a strong relationship with ANUIES – the Mexican rectors’ association. Through them we have access to a huge amount of information, advice and contacts within the Mexican system that we could

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Where are the UK’s primary strengths in education overseas?

The UK university sector is one of the best in the world – according to a wide range of international indicators. Our universities have a well-deserved reputation for quality, underpinned by a robust quality assurance system. They rank second in the world to the US for the quality of research and, in fact, the UK has recently overtaken the US to rank first for the impact of our research as measured by citations. This is particularly important because in the UK the majority of research takes place within universities. So research strength contributes to the teaching in our universities quite directly, which is not always the case elsewhere. We also have a system in which teaching is remarkably student-centred. Students have a voice in decision making in most universities and their views, as captured by our National Student Survey, systematically influence the way that universities try to improve what they do. I think that is quite unusual. For us it is also easy to forget that the way UK universities teach is quite different to many other HE systems. The UK higher education system is one that encourages active instead of passive learning where students are encouraged to question, think creatively and work independently. Alongside all this, the UKs higher education sector is home to world renowned teaching staff, research and facilities. These are some of the reasons why so many UK universities appear prominently in the international rankings. However I don’t think rankings do justice to some of the gems of our system. Postgraduateonly institutions like Cranfield University or the many world-leading specialist institutions like the Royal College of Music don’t appear in rankings because of the criteria that are used. So one of my jobs is to help overseas partners find those institutions which are absolutely fantastic at specific things, where the rankings don’t reflect that.

Why is the UK so popular with international students?

The UK’s universities and UK qualifications are recognised across the world for their excellence, range and quality. Having a UK university listed in their resume will give students an edge when competing for a job, proving to employers that they are competent in English and capable of independent thought, research and self-discipline. UK Universities work hard to ensure that all students, including international students, have a positive experience across all elements, from teaching and learning to living and support. Ensuring that international students have a positive experience both inside the classroom and out is vital to the success of our universities and they invest great time and resource to continuously improve the student experience. In fact, we recently published a report comparing International students’ perceptions of study in the UK with their colleagues who chose to study elsewhere. On almost every measure we outperform the competition in terms of student satisfaction and the quality of teaching and learning opportunities. We are very proud of that fact, and our universities work hard to maintain and improve their reputation for quality. I would add that international students make a huge contribution to the UK society and to academic life in the universities in which they study. We must continue to make sure that our message about genuine international students being welcome in this country continues to be heard loud and clear. Our ability to attract international students and academics from around the world is central to the success of universities – both in terms of teaching and research. Is there significant disparity in demand in the international sector between undergraduate, postgraduate and vocational courses?

It is interesting that the patterns of demand vary quite considerably by country of origin but to generalise, we know that for EU students undergraduate courses are more popular (HESA 2013/14) and that for non-EU students postgraduate is more popular. UK postgraduate qualifications are of course extremely high quality and typically shorter than in other English speaking countries. So, for example, a UK one-year Masters is quite a cost-

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Universities UK International Unit

effective way of getting an internationally regarded qualification in less time and at lower cost than in many other higher education systems.

never hope to develop on our own. We also work extremely closely with other UK agencies overseas, including the Embassy network and the British Council. But we are also very lucky in our staff. Because we have exciting, interesting and worthwhile jobs we are able to recruit incredibly bright and motivated staff. They are absolutely essential to our reputation as a really effective team within the UK HE sector. Educational inbound demand for UK undergraduate courses in 2015 has been more popular than ever according to UCAS with 592,290 applications.

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| How important is e-learning as a viable educational tool?

E-learning is very important indeed for a number of reasons. The UK has a long history of providing high quality distance and blended (which combines distance with face-to-face) learning to widen access to universities, which is a challenge all over the world. E-learning is also increasingly used to improve on-campus teaching through the use of virtual learning environments and flipped-classroom approaches. MOOCs have exploded onto the scene and achieved remarkable participation, but there are still many questions about how that story will unfold. I know that the UK’s MOOC platform Futurelearn is starting to achieve some impressive results in retaining students. So in a variety of ways e-Learning offers opportunities to open up and improve access to higher education. It will have a transformative effect – although I am not sure anyone can absolutely predict what that will be. But I don’t think it will replace traditional forms of higher education in which you put people together in a room to learn from their face-to-face interactions with teachers. Does the IU run events and programmes to bring together UK higher educational opportunities and institutions globally?

The IU is committed to building the capacity of the UK higher education sector at all levels from senior management through to practitioner level colleagues within universities. We do this by running events which provide the sector with relevant information/intelligence to help them take advantage of international opportunities, as well as allowing opportunities for expert staff in universities to learn from each other. Our events include our large scale conferences attracting leading international speakers (our International HE Forum is on 1st of March in London), as well as the events we run for our programmes including HEGlobal (which I mentioned earlier) and the Go International programme (which aims to increase the number of UK domiciled

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Universities UK International Unit students who access an international experience as part of their UK higher education). The International Unit also has Communities of Practice for Outward Student Mobility, Europe, Asia, Latin America, and the Middle East, North Africa (MENA) region as well as the Newton Fund Network to bring together professionals responsible for maximising their university’s involvement in the fund. These communities of experts meet two to four times a year to discuss major issues in these areas, share best practice, and hear from experts on relevant topics such funding opportunities in their region. We also create many opportunities for our universities to meet counterparts and potential partners overseas. For example, in the next few months we will take outward delegations to India and Indonesia to meet university leaders and government figures there, and welcome delegations from India, Chile, and Mexico to the UK. As you are engaging educational opportunities overseas, what is your relationship with UKTI and foreign governments in general?

We have strong relationships with our own FCO embassy network, with UKTI and of course the British Council which is an essential partner in what we do. In a small number of places we have established strong direct relationships with other governments and ministries. In addition, we look for bodies like us in other countries so that we can bring what we know about the UK sector together with what our counterparts know about overseas university sectors, for mutual benefit. But I should add that we are pretty focused. We are a small team so we can’t engage everywhere. We concentrate on about 15 countries – with major programmes in just a handful. We couldn’t credibly claim to be expert on every country in the world.

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Universities UK International Unit

Where have you seen the most demand for on –site international campuses borne out of higher UK educational institutions?

Can you give any specific examples of successful bilateral agreements to encourage both inbound and outbound educational opportunities for the UK?

There are now several branch campuses or joint ventures operating in China and Malaysia in particular, as well as some in UAE and elsewhere. But I should stress that branch campuses are still a very small part of UK universities international activities. Much more takes place through partnerships where there is a wider distribution of activity.

We have a UK-India Bilateral Forum which has encouraging reciprocal mobility of students and academics as a specific goal. We are supporting both the Generation UK India scheme, run by the British Council, to encourage UK students to study and spend time in India, and the Government of India’s GIAN scheme to support UK academic mobility to India. Under the auspices of this group we are also working on mutual qualification recognition to ease mobility in both directions. The UK and Indian Governments jointly invest in UKIERI (the UK-India Education and Research Initiative) which supports co-operation and exchange on a variety of levels. We have many similar agreements around the world. And we have the Newton Fund which funds exchange of postgraduate students and researchers, as well as supporting research and innovation projects in India and 14 other countries around the world.

The rise of international students from Asia is widely known with Chinese students representing the biggest single group within UK institutions. Has this translated into similar demand for education to be brought to this region? Do you expect to this trajectory to increase exponentially over the next few years?

According to the HESA 13/14 stats (the most recent data), there are 50,000 UK TNE students in China. It’s second only to Malaysia in terms of volume of UK provision overseas. China considers new programmes for approval every year, and the UK consistently proposes new programmes. There are some very successful examples of programmes delivered in partnership with Chinese universities, on 2+2, 3+1 and 4+0 models, branch campuses and innovative new institutions that have been created through partnership such as the SinoBritishCollege and XJTLU. It’s not possible to say exactly how strong growth will be there, as TNE is now featuring more prominently across the globe, but we’d definitely anticipate growth in the coming years. We expect the relationship with our colleagues in China to mature, with a wider range of universities setting up partnerships with their counterparts in China and with more UK students studying there.

Which region are you most in competition for regarding international students? What does this mean for the future direction of higher UK educational establishments on the global stage?

UK Higher Education is increasingly international; the UK is the 2nd most popular destination in the world for international students (to the United States). The figures below shows the share of the world’s internationally mobile students in 2012. However it’s not just about students. Universities around the world are increasingly developing their international networks to work together to tackle global issues through joint research and sharing knowledge and expertise to help create a new generation of graduates with a global outlook. The UK continues to be one of the top destinations in the world for academics. l 24% of all academic HE staff and 17% of students in the UK are international. l Increasing international research collaboration: 48% of articles have an international co-author. l 600,000 students currently enrolled in UK courses outside the UK. l 75% of UK universities offer courses overseas. Our universities are made better by the international mix of their students and staff. For UK higher education institutions, internationalisation is normal, even necessary and I see the UK playing a leading role on the Global HE stage in the years to come. So for me it is less about competition for student recruitment in a particular region, than expanding our network of connections to a broader range of countries, and on a broader range of levels.

Further information www.international.ac.uk

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Arena Group

| Creating the right atmosphere at sporting events not only affects ticket sales but impacts the athlete’s experience, as well as tv, media and sponsorship, says James Anderson, Commercial Director UK & Europe at Arena Group

Spectator first for major sports events

012 marked a golden era for the UK event industry. Those companies that saw the London Olympic Games as a strategic stepping stone have created memories – and business opportunities – that will last a life time. They now have the chance to claim their stake in £5.9b worth of incremental businesses opportunities between 2014 and 2022, becoming part of an industry estimated at $700b annually. Doing just that is temporary event infrastructure supplier Arena Group. Since building the London 2012 Olympic Beach Volleyball stadium the company has provided its temporary seating, structures and overlay to the Glasgow 2014 Commonwealth Games, Sochi 2014 Winter Olympics tand the Brazil 2014 World Cup, all whilst servicing its regular portfolio of clients from the Grand National to Wimbledon. Behind its success is one simple ethos – focus on the spectator experience. The FIFA 2014 World Cup in Brazil saw three million visitors at 12 stadiums across the country. With 55 non-recurring global sports events planned between now and 2022, there are millions of tickets to be sold for World Cups, Olympics, Commonwealth Games and more. James Anderson, Commercial Director UK &

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Europe comments: “There are of course other income streams – media rights, sponsorships etc – but a large proportion of this revenue is made from ticket sales. Making sure that people are comfortable, have great views and get the best possible experience is vital. “The atmosphere you create affects ticket sales for future events, but it also impacts the athlete’s experience, and how the event is portrayed on TV, which in turn can impact media and sponsorship. If the live crowd is having a great time, it shows.” Anderson believes that temporary infrastructure is one way to meet these objectives, whilst ensuring host cities aren’t left with expensive, unused venues post-event. It’s a belief that is proving more than fruitful for the business, whose project management and products are now used globally via its network of 19 offices on four continents. Anderson continues: “Event infrastructure can be the practical commodities – the perimeter fencing, the track way, the toilets, the cable gantries, the marquees. “But it can also be used to open up new revenue streams. VIP seating seamlessly integrated into general admission, or perhaps complete temporary hospitality venues or fan zones. All of this and

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Sports more can be created without relying on existing buildings, or investing in expensive and unnecessary construction.” The BMW PGA Championship 2015 is the prime example of this, enlisting Arena Group to build the BMW Drivers’ Lounge for the first of a four-year contract. Exclusively available for BMW drivers, the two-storey facility featured a slate-walled garden and a glass-fronted atrium, with interior design and finish befitting the ‘exclusive’ ambience in-line with BMW’s brand aspirations. Similar venues have been built by the group’s Middle East team at major golfing tournaments including the HSBC Abu Dhabi Golf Championship.

Innovation With all eyes on Qatar for the 2022 FIFA World Cup, temporary infrastructure is already being explored. In 2014 Arena Group built a first-of-its-kind cooled, open-air temporary fan zone in Katara, Doha to show screenings of the 2014 FIFA World Cup. Contracted by Wasserman Group, Arena Group managed every element of the procurement and install. The fan zone was commissioned primarily to test a brand new cooling system that has been developed ahead of the 2022 tournament, amidst concerns of the stifling heat. Circular in shape, the 2,500m2 venue featured a fully-retractable roof and fabric walling. The perimeter featured giant reinforced fabric ‘sails’, creating an eye-catching sight on the Katara horizon and replicating the traditional Arabic dhow sailing vessels. Nathan Pankhurst, Arena Group’s Head of Overlay Planning, said: “Four cooling columns were strategically placed, keeping it to an optimal temperature below 30⁰. The columns blew cooled air, with a fine water mist, and the retractable roof allowed the client to test this pioneering new

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Opposite: Qatar Fan Zone Below: Arena Group PGA BMW Championship 2015

Arena Group

technology in a range of climatic conditions. “This new technology will not only be used at the 2022 World Cup but will also allow countries of a similar climate to host major sporting events in the future. We were able to put our overlay planning experience into action at a very complex venue and location, working closely with the client to deliver a stunning venue which has set standards for future major events.” Meanwhile at the 2015 Rugby World Cup Arena Group will be a turnkey supplier, providing temporary overlay to all 54 venues, including 13 stadium venues and 41 team bases. Most notable is the Venue Media Centre located at Twickenham that houses up to 600 of the world’s media, broadcasting the latest Rugby World Cup action to countries across the globe. The company’s growth since 2012 has been recognised through various industry awards including Sports Pro magazine’s Top 50 Companies to Watch in Sport and The Sunday Times International Fast Track 200. “No matter where in the world the event is, temporary infrastructure offers organisers a cost effective way to host their event,” concludes Anderson. “But more than that, it can help them to create an atmosphere and environment that can surpasses that even of a permanent venue.” Statistics found at: https://www.gov.uk/government/uploads/ system/uploads/attachment_data/file/211844/evolving-capabilities-for-sports-marketing-and-consultancy-services-in-uk-andglobal-opportunities-to-2022.pdf https://www.atkearney.com/communications-media-technology/winning-in-the-business-of-sports

Further information www.arenagroup.com

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tangerine

Transforming customer experience Appealing to customers’ emotions and understanding their desires is key to transforming their experience, say Martin Darbyshire, CEO and Matt Round, Creative Director, tangerine

t the core of every successful business is a perceptive understanding of the consumer. For UK design house tangerine, the aim is to help clients around the world transform their customer experience through a combination of insight, expertise and innovation. The company’s revolutionary lie-flat Business Class bed for British Airways, for example, was all about transforming the customer experience. Credited with not just turning around the airline’s fortunes but redefining the market, the design proposed a new way to travel. Up to that point, business class cabins featured regimented rows of reclining seats. Consumer insight, however, revealed how passengers yearned for privacy and a proper sleep. So tangerine’s

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design team completely rethought the cabin space and came up with an ingenious yin-yang layout that opened up amazing possibilities. Having seats paired in a forward/rearward formation, along with some very clever engineering and design, meant the cabin had just as many seats as before, but now passengers had their own private space and a seat that became a full-flat bed. “The reaction was ‘wow!’ People thought this is amazing.” BA’s former marketing director, Martin George says. “It’s the best thing our company has

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Architecture

ever done,” BA’s former Chief Executive Bob Ayling agreed. That same combination of customer psychology and design precision also saw tangerine successfully transform the first-class passenger experience on the Heathrow Express train service in the UK. Again, it required thinking about the space in a new way The 15-minute journey between central London and the airport offered little time to make first-class passengers feel special, so tangerine proposed that, instead of three seats across, Heathrow Express would have just one on each side. “Sitting in first class, I couldn’t help but notice there were lots of seats with no one in them,” tangerine creative director Matt Round recalls.

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“So I thought – if we take out just two seats from the carriage and redistribute the luggage racks we would be able to provide a more comfortable, secure and private journey. We should trade carriage capacity for customer privacy and exclusivity.”

Clarity of vision It was a truly radical idea – no British commercial railway carriage had ever been configured with just one seat on each side. Along with other clever changes to layout and signage, the redesign led to a big boost for occupancy levels as well as the Heathrow Express brand. “Now people walk past First Class and think ‘I want to be in there’,” says HEX Engineering Manager Mark Chestney. “Before they’d walk past and think:

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tangerine

Opposite: First Class carriage interior of London’s Heathrow Express, with the inspired single seating configuration Above: tangerine transformed Virgin Australia new A330 & B777 business class cabins to differentiate the service from its competitors

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tangerine

MARTIN DARBYSHIRE

Martin founded tangerine in 1989 and under his stewardship it has developed into a global strategic design consultancy that creates award winning solutions for internationally recognised brands. A design leader on the international stage, Martin combines his work for tangerine with a worldwide programme of keynote speeches and activities promoting the importance of design and innovation as a means to improve business success and human wellbeing. Martin has served as UKTI Ambassador for the UK Creative Industries, a board member of ICSID, as well as a visiting professor at Central Saint Martins. He was recently appointed a trustee of the UK Design Council.

Why do I want to spend the extra money for that?” With studios in London and Seoul, an office in Brazil and design talent from every continent, tangerine seeks to transform customer experience across cultural divides. “Our understanding and insight of consumer attitudes in different parts of the world means we can help businesses expand into new markets,” tangerine CEO Martin Darbyshire explains. tangerine’s 25-year association with the giant South Korean conglomerate LG is a case in point. In the late 1980s, LG was looking to move into Europe market but knew their existing offer wouldn’t cut it with Western consumers. tangerine helped them move from being seen as a low-value Asian label to becoming a desirable global brand. “It’s all about clarity of vision,” Darbyshire believes. We’ve worked on more than 80 products for LG - from refrigerators and vacuum cleaners to mobile phones and tablets. “The challenge was to create a ‘design language’ that would be applicable to different countries, markets, positions and priceentry-levels. The aim was to produce products that consumers want to own because they do what they

MATT ROUND Matt is an experienced international design professional, whose passion for innovation and groundbreaking design has fuelled success for global brands with world leading products and services. Matt has been a key part of tangerine for twenty years and is responsible for helping clients create outstanding experiences for their customers. He leads strategic innovation programs globally in a variety of sectors, helping brands harness the competitive advantage design can bring. Matt serves as a product design juror for the internationally acclaimed D&AD Awards in the UK. He also regularly speaks at events world-wide to promote design internationally.

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want, not just what they need. Our long and happy association with LG is testament to the success of that shared vision.” LG Vice-President and design expert Youngho Kim echoes the sentiment. “Co-working with tangerine, we started to break away from functional design to emotional design – focusing much more on the consumer’s perspective than the product styling.” tangerine has always encouraged its clients to see design, not as a last-minute add-on to an individual product, but a fundamental part of business strategy. When they were asked to design corporate apartments for another South Korean corporation, Samsung C&T, the commission was really about devising a strategy that would transform the way consumer’s thought of the company’s Raemian apartments. The challenge was to bring coherence and offer clear vision – even the client’s chief executive thought the brand lacked differentiation. Working closely with Samsung C&T executives, tangerine in London and tangerine & partners, in Seoul, produced for Raemian – a ‘design spirit’ for their

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Architecture

tangerine

Above: Raemian apartment complex showing street furniture, lighting and entrance gate (left)

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tangerine

apartments founded upon a strategy and philosophy that would set them apart. The apartments are now the number one brand in South Korea and Samsung C&T have introduced a division dedicated to putting ‘design spirit’ into everything they do. “Other rival companies have copied us and set up design teams and design divisions,” says C&T’s former Design Division Director Seung Min Kim. “But I am not offended. Raemian is the thing of which I am most proud.” The word Raemian has become almost Korean shorthand for chic sophistication, and there is even a Seoul gallery dedicated to ‘Raemian style’.

Successful innovation The clever part is creating propositions that appeal to consumers’ emotions, transforming their experience in ways they could not even imagine. It is about true insight combined with attention to detail. A good example of how this approach can revolutionise a product and a business is Snoozebox, a portable hotel room aimed at sporting events and festival. When tangerine was brought in, the offer was functional accommodation inside shipping containers – just a place to put your head down. The proposal was to transform the customer experience into something akin to a five-star hotel. “We worked closely with Snoozebox to create a sophisticated and extraordinarily flexible room,” says tangerine creative director Matt Round. “It

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Smart phone concepts created for LG Electronics

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Architecture involved some innovative design thinking to create the engineering solutions but, above all, it is about transforming the consumer experience.” Everything from the design of the fixtures and fittings to the colour palette and the atmosphere was reconsidered. Fold-down beds, hidden within supersleek metal frames integrated into the walls, were achieved by exploiting specialist laser-cutting and folding processes. The bathroom was designed as a luxury wet room with a flared wall giving a sense of spaciousness but also providing a dry hanging area for towels and clothes. The accommodation came in three finishes to suit different clients, with flooring and fabrics sourced by tangerine from some of Europe’s top design houses. Snoozebox is now a leader in its market, - a premium hotel experience in the heart of the action at sporting events and festivals. The company’s fortunes having been transformed since the redesign. Success is about both big strategic vision and the smallest hinge on a fold-down bed. “tangerine allowed us to take what we wanted conceptually and actually see it realised,” says Snoozebox CEO Lorcán Ó Murchú. “They were just so clever whilst also understanding our commercial parameters.” “One of the problems with conventional market research is that it tends to focus on the negatives – what consumers don’t like,” Martin Darbyshire believes. “What we try to do at tangerine is work out

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British Airways iconic Club World seat

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Architecture

True insight

what they would like. Successful innovation is about unimagined possibilities.’ Inevitably, the secrets of success are often closely guarded, and much of tangerine’s strategic work remains hidden behind the doors of confidentiality. Creative Lead, Yuichi Ishihara explains, “An example is in the automotive industry where we have been quietly working with Japanese automotive giant Toyota exploring the question; what will it be like to travel in cars of the future and how will automated driving technology affect the experience?”

With another Japanese corporation, Nikon, tangerine is running an annual “design immersion” programme in which company executives develop their capacity to take advantage of emerging shifts in consumer attitudes and technological disruptions. “Thanks to the project with tangerine, I began to look at things and think about ideas in a completely different way,” says Hiroki Hosaka, the first Nikon designer to take the plunge with design immersion. “I am sure my experiences with tangerine in London will have an enormous impact and inspiration on the future products and success of the Nikon Corporation.” What all these projects demonstrate is the value successful companies place on ‘insight’. Not just a shallow understanding of consumer habits, but a profound appreciation of the psychology and culture that drives consumer behaviour. What tangerine does is translate that understanding into a business strategy – not only transforming the customer experience but transforming profit margins as well. “I am proud that tangerine is a major exporter of design, with 80% of business coming from outside Europe, notably in emerging economies in Asia and South America,” Darbyshire says. “We believe we have much to offer businesses around the world.” Snoozebox portable hotel rooms with seven flexible room configurations

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Further information www.tangerine.net

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RIBA Stirling Prize 1996-2015

As Burntwood School wins the Stirling Prize Tony Chapman Hon FRIBA looks back over two decades of prize winners

Worthy winners

1999

1996

2002

2005

he RIBA Stirling Prize is the culmination of what is probably the most rigorous judging process in world architecture involving around 80 judges, three stages of judging and visits by three different juries. So winning the prize means a lot. The 2015 winners with Burntwood School in Wandsworth, Allford Hall Monaghan Morris, had been shortlisted three times before, once with another school, once with a health centre and once with an office development. The Director in charge of the project Paul Monaghan said on winning: ‘Schools can and should be more than just practical, functional buildings; they need to elevate the aspirations of children, teachers and the wider community. Good school design makes a difference to the way students value themselves and their education, and we hope that Burntwood winning the RIBA Stirling Prize shows that this is worth investing in.’

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Architecture

RIBA Stirling Prize 1996-2015 1996 Centenary Building, University of Salford by Hodder Associates

1998

1997

1997 Music School, Stuttgart by Michael Wilford and Partners

2000

2001

1999 NatWest Media Centre, Lord’s, London by Future Systems 2000 Peckham Library and Media Centre, London by Alsop & Störmer

2003

1998 American Air Museum, Duxford by Foster + Partners

2002 Millennium Bridge, Gateshead by Wilkinson Eyre Architects 2003 Laban Dance Centre, London by Herzog & de Meuron

2004

2004 30 St Mary Axe, London by Foster + Partners

2006

2007

2005 The Scottish Parliament, Edinburgh by EMBT/RMJM 2006 New Terminal Area, Barajas Airport, Madrid by Richard Rogers Partnership with Estudio Lamela 2007 Museum of Modern Literature, Marbach am Neckar by David Chipperfield Architects

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2008

AHMM are the opposite of starchitects, concentrating on doing ordinary buildings supremely well, something that was highly commended by the 2015 judges led by RIBA President Jane Duncan, who said: “Burntwood School shows us how superb school design can be at the heart of raising our children’s educational enjoyment and achievement.” It takes almost as long to judge a building as it does to build it – and it requires nearly as many people. The regional awards teams sort out all the entries – up to 500 a year - and organize the judging in the regions which leads to RIBA Regional Awards and recommendations for National Awards. These are ratified – or not – by the RIBA’s Awards Group who then pay visits to the best of these to decide which six projects should be visited by the Stirling Prize jury. It is this diversity of judging that gives the RIBA’s awards their unique rigour. We named the prize for Jim Stirling largely because he was recently deceased and therefore couldn’t enter – we thought. The first prize went to a young architect, RIBA President-to-be Stephen Hodder. A year later Jim Stirling won it from the grave, with his business partner Michael Wilford’s help. Wilford waved the £20,000 cheque (not the trophy oddly) and declared, ‘This is for Jim.’ In 2000 we landed the TV deal which meant Stirling had really come of age and it had achieved its avowed aim of bringing architecture to as wide a public as possible. However, the live broadcast of the 2005 Stirling Prize went off air for a minute when pranksters unplugged the cable carrying the signal from the National Museum of Scotland to the outside broadcast van. Past Stirling judges have included some of the most pre-eminent women in their field, including Stella McCartney, Tracey Emin and Janet StreetPorter. Other well-known judges include James Dyson, Antony Gormley and Julian Barnes. Three architects have won the prize twice: Norman Foster with his American Air Museum at Duxford in 1998 and with the Gherkin in 2004; Richard Rogers with Barajas Airport 2006 and Maggie’s London in 2009; and Zaha Hadid with MAXXI Museum of Modern Art in Rome in 2010 and the Evelyn Grace Academy in Brixton in 2011.

Going for gold Dame Zaha Hadid also won the 2016 Royal Gold Medal. Unlike the RIBA Stirling Prize which goes to a building, this venerable prize, presented annually since 1848, goes to an architect for a significant body of work. Oddly it was conceived as a design competition to produce a building to house the recently formed Royal Institute of British Architects. When none of the entries was deemed worthy the prize was re-purposed, with royal approval, as a

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Worthy winners

2011

RIBA Stirling Prize 1996-2015

The judges said of it: ‘Burntwood sets a standard in school design that every child in Britain deserves. It is a culmination of many years of creative toil by Allford Hall Monaghan Morris in designing schools up and down the country. This is their masterpiece.’

medal for architects (and very occasionally nonarchitects such as engineers, planners, architectural historians and writers). Royal approval is still required: the RIBA has to obtain the agreement of the Monarch though that has never been refused. It will be interesting to see if King Charles III will take a more active interest in the identity of the winner.

Unquestionable talent In response to the news she was to receive the Medal Zaha Hadid said: “I am very proud to be awarded the Royal Gold Medal, in particular, to be the first woman to receive the honour in her own right. I would like to thank Peter Cook, Louisa Hutton and David Chipperfield for the nomination and Jane Duncan and the Honours Committee for their support. We now see more established female architects all the time. That doesn’t mean it’s easy. Sometimes the challenges are immense. There has been tremendous change over recent years and we will continue this progress. This recognition is an honour for me and my practice, but equally, for all our clients. It is always exciting to collaborate with those who have great civic pride and vision.” The architect who nominated her, Professor Sir Peter Cook, himself a Royal Gold Medallist with the architectural collective Archigram in 2002, concluded his official citation with the words: “Zaha shares with (previous winners) the precious role of towering, distinctive and relentless influence upon

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Architecture

RIBA Stirling Prize 1996-2015 2008 Accordia, Cambridge by Feilden Clegg Bradley Studios, Maccreanor Lavington and Alison Brooks Architects

2010

2009

2012

2009 Maggie’s Centre London by Rogers Stirk Harbour + Partners

2013

2010 MAXXI, National Museum of XXI Century Arts, Rome by Zaha Hadid Architects 2011 Evelyn Grace Academy, London by Zaha Hadid Architects

2014

2015

2012 Sainsbury Laboratory, University of Cambridge by Stanton Williams 2013 Astley Castle, Warwickshire by Witherford Watson Mann Architects 2014 Everyman Theatre, Liverpool by Haworth Tompkins 2015 Burntwood School London by Allford Hall Monaghan Morris

all around her that sets the results apart from the norm. Such self-confidence is easily accepted in film-makers and football managers, but causes some architects to feel uncomfortable. Maybe they are secretly jealous of her unquestionable talent. Let’s face it, we might have awarded the medal to a worthy, comfortable character. We didn’t, we awarded it to Zaha: larger than life, bold as brass and certainly on the case. Our Heroine. How lucky we are to have her in London.” The Royal Gold Medal is sometimes described as a lifetime achievement award, but some winners - Norman Foster, Richard Rogers, Herzog & de Meuron and David Chipperfield – have been in their 40s. All four have also won Stirling. The way

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the winner is decided could not be more different. Instead of scores of architects and non-architects scurrying all over the place, the winner of the Royal Gold Medal is decided by a panel of architects (and again) non-architects who sit in a room at the RIBA studying and debating the nominees’ work and deciding the winner. White smoke all but emerges from the roof of 66 Portland Place at the end of the day, so important is the decision. The name of the new winner is carved into the wall of the ground floor of the RIBA Headquarters, making it literally a part of the fabric of the Institute and of architecture, taking its place alongside that of almost all the greats: Charles Barry (1850), George Gilbert Scott (1859), Edwin Lutyens (1921), Frank Lloyd Wright (1941),

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PHOTO: HUFTON+CROW

RIBA Stirling Prize 1996-2015

Heydar Aliyev Center, Baku by Zaha Hadid Architects

PHOTO: LUKE HAYES

London Aquatics Centre by Zaha Hadid Architects

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Architecture

RIBA Stirling Prize 1996-2015 DAME ZAHA HADID PORTRAIT BY MARY MCCARTNEY

Le Corbusier (1953), Alvar Aalto (1957); Mies van der Rohe (1959); Berthold Lubetkin (1982), Oscar Niemeyer (1998) and the City of Barcelona (sic – 1999). Or not quite. Because since 2008 we ran out of room on the wall behind the reception desk and subsequent names have been carved into the wall of the Architecture Gallery, requiring scaffolding and a hard hat for the engraver. There should be room enough there to accommodate the rest of the century’s winners.

Global presence The Royal Gold Medal is an international prize: sometimes the best part of a decade passes without a British winner. Because the RIBA is not a trade union for British architects, nor is it simply a UK professional body, it is an international body with over 4,000 overseas members whose remit is to promote architecture around the world. That is why we are setting up a new RIBA International Prize, the first edition of which will be presented in December 2016 to the architects of ‘the building thought by the judges to be the most significant and inspirational of the year. The winning building will demonstrate visionary, innovative thinking, excellence of execution, whilst making a generous contribution to society and to its physical context – be it the public realm, the natural environment or both.’ As such the prize, which is open to all qualified architects anywhere in the world, reaffirms the visionary purpose of the RIBA as stated in its 1837 charter for ‘the general advancement of Civil Architecture.’ As ever the RIBA is building on its past as it to reward the best buildings and architects of the future.

Zaha Hadid, founder of Zaha Hadid Architects, is internationally known for her built, theoretical and academic work with each of her projects building on over thirty years of exploration and research in the interrelated fields of urbanism, architecture and design. Prior to being awarded the Pritzker Architecture Prize (considered the Nobel Prize of architecture) in 2004, Hadid studied Mathematics at the American University of Beirut before moving to London in 1972 to attend the Architectural Association (AA) School where she was awarded the Diploma Prize in 1977.

PHOTO: VIRGILE SIMON BERTRAND

DDP, Seoul by Zaha Hadid Architects

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Architecture

Working with an architect Working with an architect

‘Good design contributes to well-being and behaviours.’

Jesmond Gardens Primary School by ADP PHOTOGRAPHER: ANDREW HEPINSTALL

Working with an architect Architects are highly skilled and professionally trained to turn your aspirations into reality

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etting success out of the construction process can be challenging so working with an architect from an early stage will help you get the most out of your project. An architect can help you answer the big questions of ‘what are the options for the site?’ through to ‘how do I deliver the project?’ An architect can guide you through a whole range of processes – from coming up with an initial design concept to seeing the project through planning and construction to completion. A good architect will help you develop the brief. They will listen and seek to understand your needs, and what you are trying to achieve, so the first thing

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Working with an architect

‘Architects will maintain focus on the user.’

that needs to be talked about is the outcome – what are you looking for? What is the budget? What is the timescale? What are the constraints? An architect will work to support your strategic decision making. From an early stage an architect can assess the site, set out the options, carry out feasibility studies and help you develop your strategy into a project brief. An architect has an holistic view. They are able to think about things laterally and can go through a number of different options which may not have been considered before.

PHOTOGRAPHER: PAUL RIDDLE

Working with an architect

Architecture

Taking the lead

PHOTOGRAPHER: HÉLÈNE BINET

Architects can set up and lead the design team to consult with community, help achieve planning consent and complete the project more effectively and efficiently. They are problems solvers and can develop solutions and efficiencies before and during construction. Architects will propose ways to minimise waste and reduce cost. They will assess the best ways to achieve your aspirations and will present options to you and your stakeholders, enabling you to decide on the best route forward. Architects add value, whether it comes from maximising impact or functionality, bringing about a change of use, increasing capacity or marketability.

Further information If you’re looking for an architect or want more information please contact: Royal Institute of British Architects Client Services Tel: +44 (0) 20 7307 3700 clientservices@riba.org www.architecture.com/FindAnArchitect

‘Architects ‘Architectswill willchampion champion the thevision vision from from concept concept to to completion’ completion.’ Top: Newhall Be by Alison Brooks Architects Above: Astley Castle by Witherford Watson Mann Architects

PHOTOGRAPHER: HÉLÈNE BINET

Left: Love Shack by Sutherland Hussey Harris Architects

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PHOTOGRAPHER: KAREN GUTHRIE

‘Architects ‘Architectswill willchampion ensure the communication vision from concept is to engaging, completion’ authoritative and persuasive.’

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Public-Private Partnerships

Setting the world straight on PPPs John Davie explains why PPPs are so misunderstood, and why he was compelled to share his knowledge in The PPP Book, Public Private Partnerships Unbundled

’m sometimes asked why I chose to write a book about Public Private Partnerships (PPP). The answer to this question is in the introduction to my book: “Alas while PPP is widely talked about, it is also for the most part misunderstood.” The problem with PPPs is that people have strong opinions about them – they tend to be either incredibly pro or anti – and yet most actually have very little knowledge. And it’s no surprise, as neither the press nor politicians – most peoples’ source of knowledge on the subject – help. Both have been quite reckless in their stance either for or against PPPs, without properly examining the facts and realities. Both the press and politicians also ignore the fact that the government doesn’t necessarily do things very well on their own. However, there are positive examples to draw on. But poor government procurement continues, even after years of delivering successful public-private partnerships. The Scottish Parliament building, standing in Edinburgh’s UNESCO World Heritage Site, is a beautiful building designed by a Spanish architect and a very good Scottish secretary. Parliament approved a budget of about £40m, a politically motivated budget to get approval to build it. The actual cost at the time of tender was about £110m, and the final out turn cost was £440m. This is government procurement failing to adequately define its requirement and is typical of what happens in the UK and all over the world when PHOTOGRAPHER: NICK KANE

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Architecture

Public-Private Partnerships

PHOTOGRAPHER: TOM CRONIN

Opposite: Waldron Health Centre, London by Henley Halebrown Rorrison This page: Royal London Hospital by Cottrell & Vermeulen with Studio Myerscough

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Right: Her Majesty's Treasury Redevelopment, London by Foster + partners Below: Southmead Hospital by Willis Newson and Fresh Arts

PHOTOGRAPHER: NIGEL YOUNG

What is PPP? So what exactly is PPP? Is it a financial instrument? Yes. Is it a legal exercise? Yes. Is it a design exercise? Yes. Is it an operational exercise? Yes. Is it long term? Yes. It’s a complex mix of all of these things, and bringing them together is extremely difficult. In the UK, PPP is a way of bringing private sector discipline to the British Civil Service to make it a responsible client – taking some level of responsibility without being open to corruption. And indeed, I’m sometimes asked if PPP is a British invention. But it’s not; we simply evolved it. The concept of non-recourse finance goes back to the Phoenicians, Romans, and Greeks. A little like an insurance-backed idea, where a group of people come together on the project, in a PPP the banks get security from the future project cash flow

PHOTOGRAPHER: MAX MCCLURE

Public-Private Partnerships

Bottom left: Crisis Centre, Grays by Featherstone Young SERICC

the discipline that PPP imposes is ignored. In PPP, provided everything is done properly, the private sector cannot ask for more money unless the government changes its mind after commissioning a project. Let me give you another example of government procurement that is not PPP. Some years ago we privatised the management of the Passport Office. (Or rather, we outsourced the management of the Passport Office because the Home Office still owns and is still responsible for it.) That year, many people were waiting far too long to get their passports to go on holiday, and they blamed the privatisation for the delays. However, the tender had gone out when all children were still added to their parents’ passports. Shortly after letting the contract, the Home Office announced that children should have their own passports – a requirement that the Home Office must have been aware was not included in the tender. The truth behind the chaos was that it was just poor coordination by government.

IMAGE COURTESY OF FEATHERSTONE YOUNG

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Architecture Left: The Bridge Academy, London by BDP Below: Idea Store, Whitechapel, London by Adjaye Associates

Public-Private Partnerships

JOHN DAVIE John Davie is chairman of Altra Capital. He has a background in project management of major infrastructure developments with extensive experience of finance, management and operations. John has been working in the PPP arena for many years as an advisor, practitioner and teacher of the subject. He has a global knowledge of the subject having advised in many countries. John Davie is a Visiting Professor at the Guildhall Faculty of Business and Law, London Metropolitan University where he is course leader for the Advanced Diploma in PPP. He served two three-year terms as chairman of the UK Government’s Export Advisory Board on public private partnerships, as a member of the UK Financial Services Sector Advisory Board and as Chairman of British Expertise.

PHOTOGRAPHER: DAVID BARBOUR

and not from the balance sheet of the sponsoring companies. In the UK we created a legal requirement for Compulsory Competitive Tendering, where state organisations were corporatised and offered the chance to bid against other people. We built the capability to run the government services, and it was a logical step to move to the private finance initiative (PFI). People may think that PFI costs a lot more, and indeed, if you compare only the capital cost of building, say a university, to the cost of building, maintaining and running it for 25 years, you are not comparing that same thing at all. However, when you look at operating costs in most countries you’ll find that the government usually spends a lot more money than the private sector doing it properly, especially when you’re locking in the maintenance for the entire period. The National Audit Office (NAO) data confirms this. PPP is temporary because you’re allowing something to happen for a period of time. And it’s an important point. The state is not ceding ownership under PPP; rather it’s ceding the right to deliver service for a predetermined amount of money for a set period of time. Privatisation is permanent and can only involve an existing asset/ service.

While my book may have my name on the cover, it’s actually a collaboration of a number of people, including Steven Harris who I have worked with since we were beginning to think how PFI (British PPP) would be useful for export. At the time, Steven and I were both looking at the same thing – the skills of British advisors, bankers,

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PHOTOGRAPHER: EDMUND SUMNER

The PPP Book

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Public-Private Partnerships

PHOTOGRAPHER: TIM SOAR

the cost might be for something, and what the out turn cost actually is – and eradicate optimism bias. We want to export the UK’s huge wealth of knowledge and skills so that other countries can get benefit from it too. So many counties I visit want some of the magic they perceive Britain as having, but until they’re prepared to look at their basic legal framework, and adjust it so as to be conducive to long term lending, they will not enjoy the benefit that the UK has. Pension funds and banks are not philanthropists nor gamblers and need certain conditions to be allowed to invest. We wrote this book to help people around the world get a better grasp of exactly what PPP is and how it works. You’ll never get become ‘good’ at PPP simply by reading it, but you will be at the position where you can find the right questions to get there. It took most of us years to know what we’re doing, and there wasn’t anybody to tell us what we need to do. It’s not just about PPP; it’s about doing business well; it’s about thinking well and bringing the government and the private sector together and realising that we’re not fighting each other. Instead, we can all work together for the greater good.

John Davie is chairman of Altra Capital. He has a background in project management of major infrastructure developments with extensive experience of finance, management and operations. John has been working in the PPP arena for many years as an advisor, practitioner and teacher of the subject. He has a global knowledge of the subject having advised in many countries.

The PPP Book logically

covers the core components of PPP. It opens by looking at the circumstances that led to PPP, explaining how public authorities can reduce capital expenditure dramatically and convert the costs of infrastructure into affordable operating expenditure spread across an appropriate time scale.

John Davie is a Visiting Professor at the London Guildhall Faculty of Business and Law where he is also a Course Patron for the MA in International Business. He served two three-year terms as chairman of the UK Government’s Export Advisory Board on publicprivate partnerships, as a member of the UK Financial Services Sector Advisory Board and as Chairman of British Expertise.

It then looks at the factors that influence project financing. This is followed by some thoughts on the most significant aspects of attracting institutional finance; identifying and then managing risks and risk transfer. Next, it considers the impact of regulation and service delivery. A subsequent section looks at organising a PPP unit and how it should act as the strategy unit that provides a national co-ordinating framework. The final sections deal with the legal and legislative environment for successful PPPs and the need for standardisation of documentation and guidance for the implementation of PPPs. The PPP Book closes with a discussion about procurement and contracts.

Altra Capital specialises in the provision of procurement, management, capacity building, legal and financial advisory services for the private financing of infrastructure in all sectors, especially to support public sector clients in the international market. The team was created to bring together global PPP experts, all of whom have been active in the evolution of PPP since its inception.

PPP Book Public-Private Partnershi

ps Unbundled

Of course there is no substitute to spending time with John as he brings the case studies to life. However, this book is the next best

experience matters.

I have spent 25 years engaged in PPPs and I know that I always get a new perspective

when I spend time with John. I hope this book gives a taster of what John and his team have to offer.

John DM Davie

Graham Olver, Chief Operating Officer, WYG December 2014

engineers and operators – and wondering how we could export the skill that we’ve created in the UK. Shortly after we met, we realised government agencies didn’t completely seem to understand this opportunity so we set up an organisation, the UKTI PPP advisory board, and ran it for six years. In that time, between us we went to 60-70 countries and learned that people wanted to listen to Britain. Just as importantly, we saw why things weren’t happening. We gained a huge amount of knowledge and experience, which we put into practice working with governments and the private sector in different countries. We were constantly being asked to write down a little of what we’d done. We were delivering training and seminars, but PPP is such a complex topic that people struggled to take it all in. After being approached by a minister while working for the government in Abu Dhabi, we prepared a few pamphlets and the book just grew from there.

Exporting the UK’s knowledge

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IMAGE COURTESY OF SITA

The UK is good at every aspect of PPP but has data to work from. The NAO is an independent body reporting to Parliament and is able to measure performance properly and report thoroughly. In the UK, we can look at the reality between what we think

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PPPs are complex and inevitably involve change and compromise in seeking to balance the needs of the different stakeholders in the context of the project or programme. It takes

thing and shows why understanding the overall dynamics of a PPP helps every professional discipline to contribute in context, every developer to help shape new and innovative solutions as PPP evolves and for every government thinking about PPPs to ask the right questions from the very beginning.

PPPExperts

9 780993 163104

Service transformation lies at the heart of John’s book on PPPs. After a long distinguished career at the heart of public-private partnerships John has decided to share his knowledge and experience, not only with his studentpractitioners but to a wider audience. There is something for everyone in the text, whether as a professional looking to find a new perspective or someone looking to join the different elements of a project together.

the deft hand of an old master like John to pick out the essence of the key elements of a transaction and bring them to life. Whether it is the establishment of a PPP unit, advisor selection, the sourcing of funds, the structuring of financial and dynamic econometric modelling or the handling of risk John provides a roadmap and identifies the potential potholes.

The PPP Book is intended to share knowledge and to help government officials and professional advisors learn more about PPP.

The author can be reached at: Altra Capital Limited Token House

12 Tokenhouse Yard London EC2R 7AS www.altracapital.com info@altracapital.com

The

The PPP Book

The PPP Book is considered to be one of the definitive guides to the multifaceted and integrated ecosystem required to deliver successful PPP projects. To order your copy go to www.pppbook.co.uk

John DM Davie

The PPP Book has been written to explain the conditions for successful PPP in plain words. It is for people that are new to PPP and also those that wish to broaden their knowledge of the subject.

Further information

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Architecture

Public-Private Partnerships Opposite (top): Westminster Academy, London by Allford Hall Monaghan Morris Opposite (bottom): Isle Of Man Energy From Waste facility by Savage & Chadwick SITA Left: Bijlmer ArenA Station, Amsterdam by Grimshaw

PHOTOGRAPHER: GER VAN DER VLUGT

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Tesco

F&F, Tesco’s hugely successful clothing range, aims to export its products and reputation for great quality, affordable fashion by opening franchise opportunities with retail partners in new countries, says Richard Price, CEO of F&F

Global partnerships

esco’s clothing arm F&F was launched in the UK and Ireland in 2001, and has since become one of the UK’s largest volume clothing retailers. As well as selling F&F branded clothing in the UK, the retailer also has franchise businesses in a number of international markets in Europe, the Middle East and Asia, and plans to turn F&F into a major global brand. CEO Richard Price is a former Managing Director of BHS, and has 25 years’ experience working with some of the biggest clothing multiples in the UK. He is bringing this experience and expertise to bear on Tesco’s plans to expand the F&F global partnerships model in to many more markets. “We have been really pleased with the way

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that our franchising business has taken off,” says Richard. “We are currently running in fifteen countries and operating in a number of other markets. We’ve just opened in Croatia, which has gone off very well, and we are looking to expand as quickly as we possibly can.”

Innovative model The innovative F&F franchising model sees Tesco working with local partners to bring F&F clothing to customers in a flexible range of settings, including stand-alone stores within shopping malls and units within department stores and hypermarkets. “F&F has also opened in Germany, partnering with REWE, Germany’s second largest retailer. It is the confidence in the brand and success in launching in some key retail markets that gives F&F it’s worldwide appeal.” “We are trading in all of the markets that the Tesco brand trades in, and with partners in markets as diverse as Iceland, Switzerland, Saudi Arabia and Vietnam,” explains Richard. “Our model and

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Retail

Tesco

RICHARD PRICE Richard has over 25 years buying and merchandising experience across a variety of high street retailers including Next, M&S, BHS and now Tesco (F&F). For the past 2 ½ years he has been managing Director for BHS, prior to which he was Trading Director for menswear of M&S.

us down. The huge varieties in the collections are fantastic, we have every key summer catwalk in one. The level of quality always stuns me compared to the price point- real aspirational trends.”

Franchise partners

approach lays the foundation for our future growth in existing and new markets.” “Our Managing Director of the Global Partnerships division spends a lot of time networking, building relationships and working out the markets the F&F brand will translate strongly in to perform well in.”

Affordable fashion Richard believes the key to F&F’s overseas success is because its strategy around affordable fashion exports so well. “I think value is important in all markets,” Richard says. “However, affordable fashion, great quality and great customer service is also a vital part of the ingredient within F&F. We basically want to offer the whole package to the markets that we trade in.” As well as an impressive reputation for good quality, affordable fashion, the F&F brand also has a great reputation for its design and style. Vogue Retail Editor Rose Lander reported on the more recent range, “The collection overall it gets better each year. F&F are setting the style agenda. The brand moves forward each season with such confidence it’s a breath of fresh air.” And Tracey Lea Sayer, Fashion Director of Fabulous Magazine said: “One of our favourite brands at the magazine, F&F never lets

‘I think value is important in all markets, However, affordable fashion, great quality and great customer service is also a vital part of the ingredient within F&F’

So what makes a good franchise partner? “Obviously partners that understand their market well have access to the store locations that will land a successful business for both parties, and ideally have experience of working with other brands on a franchise basis,” explains Richard. A dedicated F&F franchise team allows partners to benefit from the business’s scale, design, buying and marketing expertise. The flexibility of the brand means that franchise businesses are supported and grown in market-leading malls, street locations, department stores or hypermarket environments. “We try and keep the proposition as consistent as possible,” Richard adds. “Obviously we do make tweaks to the range depending on key local market trades within the country we are trading in. There is a small group of people who are responsible for those needs.”

Brand integrity F&F are also careful to ensure the level of customer service from their franchise partners matches up to Tesco standards. “We are constantly engaging with our franchise partners to ensure they understand the brand integrity and the needs of the brand, and making sure they have the set up to deliver those brand credentials,” says Richard. “Good store standards, living the brand and making sure that we have a consistency across the world to ensure the integrity of the F&F brand.” Long term, Richard would like to see F&F turn into a major global brand that is recognised throughout the world. “The F&F franchise is very independent from the UK supermarket business, he explains. “It is about finding the right franchise partners in countries we believe the F&F brand will trade particularly well in, and taking that out to further customers around the world.” F&F won the Drapers International Retailer Award 2015

Further information www.tesco.com

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Tesco

Tesco’s wholesale business may be in its infancy, but the retail giant’s experience in product development and supply chain capability means Tesco branded products are flying off the shelves in overseas supermarkets, says Matt Simister, Commercial Director, Fresh Food and Commodities, Tesco

Wholesale success T

esco is one of the biggest retail brands in the world with nearly 7,000 stores and franchises operating in 11 countries.The company has strong retail roots going back nearly 100 years when it was founded in 1919 by Jack Cohen as a group of market stalls in London’s East End. By 1939 the business had grown to over 100 stores across the UK. Since the 1990s, Tesco has diversified from a grocery retailer into areas such as the retailing of books, clothing, electronics, furniture, toys, petrol and software, financial services, telecoms and internet services. When the worldwide recession hit in 2008, like many multinational stores Tesco struggled to find new avenues for growth and had to scale back some of its international plans. Tesco is now working with local businesses to grow its wholesale business. “Strategically we wanted to go into retail,” says Matt Simister, “as we feel we have a huge capability in terms of resources, supply chain, and product development that we can offer countries where we don’t need to invest in assets such as stores and distribution centres.”

Local customers

whole portfolio is open to any of the stores to order, but they also develop their own products for local customers too. Wholesale, the whole Tesco portfolio is available to other retailers.” Tesco currently sends private label products to 27 export markets overseas, and also has F&F franchises – Tesco’s hugely popular clothing range – in over 20 overseas markets. The company uses its history and infrastructure in retail brand development to get buy-in from local stores abroad. “We have a lot of capability in our product development and in our technical resource. We insource from over 70 countries and have a very wide transport network and supply chain capability, and these are capabilities that not every retailer can afford. It is often easier for retailers to lean on our capabilities to offer the range to customers.” Tesco has vast experience operating in a diverse range of markets. “We send our products wherever other retailers require them,” says Matt. “It’s where other retailers find offering our products gives them a competitive advantage, where they can offer a better range of quality products at good prices.”

Matt explains that excellent contacts and knowing your local market is key to success. “You need to be local in retailing, local customers, local colleagues and a local offer. We send the Tesco brand to our international stores whenever they require it, so the

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Retail

Short term, Tesco is concentrating on turnaround at home in the UK. “We are growing our wholesale business; it is still immature because it is only in its third year,” explains Matt. “In the longer term I see that it isn’t strategically necessary for Tesco to have assets in lots of different countries, but we have great products, so for us to provide them in different countries is a great strategic opportunity.” Tapping into local markets is one of Tesco’s key areas of success. “Retailers are always looking for some competitive differentiation and advantage in their home markets,” observes Matt, “and often the partners we work with find they can sell a wide range of Tesco branded products and they are the only people to sell them in the market. They offer their customers great quality and they can often pioneer into new markets themselves. For example Tesco Organic or Free From or special baby range products that are quite innovative in developed markets, but ahead of the curve in developing countries.”

Brand strength The core range of Tesco’s wholesale goods is Tesco branded and reflects those seen in UK shops, including Tesco Finest brand, standard, and Tesco Value, as well as healthy eating and organics. Wholesale customers are offered all of these brands, although not the option of white-labelling Tesco goods and rebranding them as their own. “We haven’t chosen to go down that route,”

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Tesco

MATT SIMISTER Following his graduation from Sheffield University and a short spell working for a London marketing agency, Matt started working for Tesco in 1995. He spent his first 10 years working in the UK, in corporate marketing, health and beauty, household, dairy and meat, before his appointment to Category Director for Meat, Fish and Poultry in 2002. After a brief spell as Category Director for Household, Cookshop and DIY, Matt then set up the International Buying Office, which developed and bought a regional range of grocery products for Central Europe whilst also initiating our Business Unit relationships with multinational suppliers across the Group. In 2007 Matt was promoted to Commercial Director for the Czech and Slovak business where he spent 3 years living with his family in Prague, before returning in 2010 to develop and set up the Group approach to sourcing, regional procurement and inbound supply chain management for fresh food and own label products. Matt is now Commercial Director for Fresh Foods and Commodities for Tesco.

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‘“There is a paperwork and supply chain process, but again it is something that we are quite familiar with our own businesses.’

says Matt. “We are looking increasingly at what we can do in food services which is less about the branding and more about the product itself. So we can offer increased diligence down our supply chains and core products at very good prices. We have good synergies with our existing supply base, and we can get a business that works for both retail and food service. For instance, we can serve the straight cucumbers into retail stores and the wonky ones into restaurants. It sounds quite simple but there are actually opportunities to work with the best suppliers in the world to take more of the crop, and then send the whole crop three different channels.” Operating in overseas markets can have its problems. SMEs expanding overseas often experience difficulties with translation and taxation; however Tesco has managed to avoid these pitfalls. “Typically our partners are already established in those markets markets where we plan to operate, but there is still a process of getting the product through to that customer,” explains Matt. “There is a paperwork and supply chain process, but again it is something that we are quite familiar with our own businesses. Usually with the combination of a local partner and somebody that has experience of exporting products, we can get to a situation which is beneficial to all. From the initial conversation to

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get a product up and running takes on average about three months, depending on specific circumstances.”

Win-win partnerships So what next for Tesco? At the moment the retailer’s priority is the UK market. Challenges in the domestic market have been well documented, with Tesco Chief Executive Dave Lewis admitting in April 2015 that “It had been a very difficult year for Tesco.” “We must turn around our performance in the UK and that will be our primary objective,” admits Matt. “We are interested to talk to anybody from any territory. The important thing for us is finding an opportunity that is going to work for both partners, a business that is established but also shares our values and standards: one that wants to embrace a win-win partnership.” The ability to work well with partners is crucial to this success, believes Matt. “It’s really important to work with partners to get the message across, and to make sure it’s really clear about what service we can offer and where we can help develop. We will work with all the partners available to try and get the best out of everyone’s capability.”

Further information www.tesco.com

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Marks & Spencer

| As part of Marks and Spencer’s global strategy to ensure a greater brand accessibility to more customers around the world Venu Nair, Managing Director of their Indian operations, talks to Global Opportunity about M&S’s position within India, the consumer dynamics shared between the UK and India and the importance of corporate responsibility while operating in the world’s largest democracy

Looking behind the label

n 2001 Marks and Spencer began its foray into India with its first store initially operating as a franchise business. “In April 2008 we signed a Joint Venture with Reliance Retail to capitalise on the growth opportunities in the Indian Market- the joint venture partnership has helped us transform our position in the market and expand our store presence rapidly. Reliance Retail has strengths in property, logistics and experience of operating in the India market,” says Venu Nair. Indeed India represents a unique opportunity for M&S in term s of demographic and economic strength. “India is experiencing tremendous growth

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and has a young population that aspires to live better and look their best. A brand like M&S has immense potential to be part of the Indian lifestyle with it’s outstanding quality, its innovations and the wide offering across price points for the complete family.” Additionally the role of the UKIBC in aiding and developing the Marks and Spencer brand within India has also been critical to it’s strong commercial presence and subsequent success. “The UKIBC convention is a prestigious platform that enables dialogue between the UK-India businesses, giving them the opportunity to share their learnings, discuss concerns and share success. As members of the UKIBC for the last two years it has helped us access various stakeholders and connect with a number of our customers, who are also members of the UKIBC.” With India universally noted as a crucial

Top left: Marks & Spencer, Bandra; Top right: Venu Nair

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Retail

commercial market, Mr Nair has acknowledged the importance of M&S’s membership within the UKIBC. “Marks & Spencer is an iconic British fashion brand and India is one of our priority markets, so we are keen to work together with out other British businesses to grow in the market.” With brand recognition generally considered stronger in South Asian markets as demand for quality heritage rises, Cool Britannia enjoys large success in retail. According to Mr Nair, “M&S has built a unique position in India as a quality, British fashion brand. As one of the largest international retailers in India with over 600,000 sq ft of selling space across 18 cities, customers recognise that quality and style are art the heart of our clothing offer.” An expectation of British excellence in manufacture has ensured a brand loyalty that M&S has traditionally enjoyed within the UK. “Our commitment to deliver the M&S difference that

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Marks & Spencer

VENU NAIR Mr. Nair was appointed as the Managing Director for Marks & Spencer Reliance (M&S) in January 2012. Prior to this role, Mr. Nair joined Marks & Spencer in 2004 and was responsible for setting up M&S’ Regional Sourcing Offices in South Asia where he held dual responsibility as M&S’ Head of Sourcing for South Asia and Director of Buying Operations for M&S stores in India. Before joining M&S, Mr. Nair was the Regional Head for Madura Garments (Europe). Prior to that, he started his career with Arvind Mills. Mr. Nair has over nineteen years of experience in the retail and clothing industry, across South Asia and Europe. Mr. Nair did his MBA from SP Jain Institute of Management and Research (Bombay University) and holds an engineering degree from National Institute of Technology, Calicut.

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‘Colour is really important to Indian customers, which is why we sell four times as many colours of polo shirts and twice as many colours of linen shirts as compared to the UK.’ customers expect and to exceed their expectations on fabric, fit and finish has kept customers coming to us consistently. Our on trend styles that incorporate out best innovations such as machineswashable suits, and Drop-a-Size Dresses among others have helped up build a loyal customer base.” Moreover the challenge of translating Mr Nair’s desire to build a brand synonymous with quality and style within the Indian market has proved minimal. “Wherever we trade we find that our customers look for quality and style. Indian’s travel across the globe and have access to latest fashion trends, so our British style works very well with out Indian customers.” Localising these offerings is also an important issue. “We have edited our offer to cater for the needs of our customers in India. Over 60% of our offering is sourced locally which ensures out pricing is competitive and helps us to ‘stretch the seasons’ to sell linen all year round in hotter Indian cities such as Chennai, Hyderabad and Mumbai, whilst selling knitwear and coats in colder cities of North India in the winter.” The sales figures reflect the cultural dynamic. “Colour is really important to Indian customers, which is why we sell four times as many colours of polo shirts and twice as many colours of linen shirts as compared to the UK.” Large companies that operate within India are also expected to engage positively within the local community. “We believe it is extremely important for all businesses, whether small or large to adopt ethical practices to mitigate their impact on the environment and the society.” Mr Nair has translated this into tangible action. “Launched in 2007, Plan A is our ethical and environmental programme to help protect the planet by sourcing responsibly, reducing waste and helping communities. Having achieved our major aim of making our owned businesses carbon neutral, we’ve not introduced Plan A 2020 with the ultimate goal of becoming the world’s most sustainable major retailer.” Mr Nair feels confident for the future. “India is a priority market for M&S and we are focused on growing our store presence in India. We have opened 12 new stores in 2014/15 and will continue to grow our presence across Tier I & II cities in the country in 2015/16”.

Further information http://global.marksandspencer.com/in/

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Red Ant

Consumer powered Embracing technology is vital if retailers are to keep up with the competition. Connected customer experience is a must, says Dan Mortimer, CEO Red Ant

onnected customer experience is a hot topic - most retailers agree that it is key to success in a highly-competitive climate which is becoming increasingly driven by technical advances. In a fast-moving, technicallyenabled world where customer behaviours are rapidly evolving along with their expectations, context-appropriate, consistent experiences can only be achieved by developing a mobile-first strategy that connects data capabilities across the business. That means using mobile to bring together all business areas from customer service through to stock management, giving a single view of customer activity that drives efficiencies, delivers excellent customer experiences and increases sales. So why havenâ&#x20AC;&#x2122;t more big-name businesses taken the plunge when it comes to connected retail? Here are some home truths for those who have yet to face the future.

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Home truth 1: Itâ&#x20AC;&#x2122;s time to wake up to what ROI really means One of the most frequent objections to making an investment in a connected customer experience is the misconception that measuring ROI is difficult. However, now that business analysts are waking up to the importance of offering something more than the bare minimum to customers, evidence is beginning to stack up in support of committing both cash and resource to developing a superior customer experience, enabled by technology. Research by management consultants McKinsey and MIT indicates that retailers who use big data and analytics to provide a relevant and personalised customer service outperform their peers by 5% in productivity and 6% in profitability. Forresterâ&#x20AC;&#x2122;s Customer Experience Index puts a cash figure on it, suggesting that taking steps to offer a better than average customer experience

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Retail results in an increase in revenue of more than £130 million for the retail industry. And customers themselves are saying it loud and clear – according to global customer management company SDL, 60% of shoppers aged 18-36 across the US, Germany, Norway, Australia and the UK ‘expect a consistent experience whether online, instore or on the phone’ and ‘expect to engage with a company whenever they choose and via whatever channel they select. [They] don’t pay heed to where they are or what device they are using when interacting with a brand…’ In short, traditional methods for measuring ROI don’t necessarily work on their own any more – it’s time to redefine the parameters to take the ‘people’ part of retail into account, which leads to home truth number 2.

Home truth 2: Don’t underestimate the importance of your staff Connected retail relies on joined-up knowledge and staff empowerment. Retailers need to make use of their most valuable asset – one which they can immediately take steps to deploy to maximise customer experience. Equipping staff with technology that delivers the same kind of information, knowledge and sense of brand connection will have a profound and rapid effect, not only on customer experience but also on sales, operational efficiency and employee satisfaction. Our own research among 1,000 shop floor staff shows that the majority believe technology can improve employee enthusiasm, efficiency and productivity. 74% said it would have a positive effect on morale and productivity, while 63% said that tablets would help them increase sales by up to 30%. 41% said they use mobile devices and apps every day, and would be very comfortable doing so for work purposes.

Home truth 3: Those technical barriers that you’re worrying about aren’t really barriers at all While proving ROI goes a long way to overcoming board-level fears, there will undoubtedly be a number of other perceived barriers on the path to adopting potentially disruptive technology. However, if you apply the desire to give customers what they want, to stay ahead of the competition and have a positive impact on profits and combine it with sound business logic, these barriers tend to become far less significant and much easier to conquer: l Barrier: multi-stakeholder projects involving established systems can strike fear into the hearts of retailers – they believe they will be big, slow and expensive. Some retailers may think the risk to existing operations is too high. l Solution: the key is to break the project down into manageable chunks with swift results. It’s possible to run quick pilots of small initiatives - modern software has a small minimum viable product, with agile development and fast speed to market. Retailers and their technology partners have the ability to choose

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Red Ant

a product which is simple to develop, pilot it to show business benefit, then use it to prove the case for building further developments. l Barrier: legacy systems in retail can be ‘locked in’ – closed by design. The perception is that it’s not possible to get data in or out, and businesses tend to think there’s too much risk even in simply building a new silo, let alone opening up and integrating/ converging data across departments. l Solution: the way modern technology operates means there is always a way to integrate, as long as it’s logical. It’s time to move on from the ‘computer says no’ mindset by providing an obvious customer journey via a new ‘quick win’ platform, using middleware to bridge the gap between legacy systems and end data user. l Barrier: the perception that this kind of upgrade in customer experience is not necessary – some retailers are happy with their business silos and ‘swimlanes’ for channel management. l Solution: when retailers bury their heads in the sand, it tends to not work out well for them.

‘Retailers need to make use of their most valuable asset – one which they can immediately take steps to deploy to maximise customer experience.’ A number of big-name businesses (Blockbuster, Zavvi, Woolworths and others) fundamentally misunderstood how to maintain a high street presence in an online/ecommerce age – their stores don’t exist any more. It’s a case of acknowledging the fundamental need for a mobile-first, crosschannel, joined-up customer experience, because your competitors have already done so. Sometimes all it takes is a common-sense, fact-based approach to enable people to take the leap of faith necessary to do something which will truly revolutionise their method of working. This has never been more true than in the adoption of technology to connect business silos – the idea that ‘crossing the streams’ of data within a business will lead to disaster is clearly outdated, and we have the facts to prove it. Once businesses open their minds – and their data systems – to a joined-up, crossdepartment approach which both empowers sales staff and improves sales, they will be able to deliver a truly connected experience which will increase sales, satisfaction and customer loyalty.

Further information www.redant.com

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Innesco

Communicating value Brand awareness and market perceptions are crucial to any major property and retail project’s success. Expert marketing agency Innesco utilises the full power of brand, marketing and communication to add considerable value to such projects across the region, says founder and MD Dan Innes

here are several key factors that decide the success of a property or retail project. Planning, construction and investment are essential, but just as significant is the communicative journey of the particular development. Managing perceptions and generating understanding can play a crucial role in the outcome of a project, and add considerable commercial value. In the Middle East this can be particularly beneficial; handling communications can bring international support and recognition to even heavily localised projects. INNESCO is a British-HQ’d marketing and communications agency with emphasis on real estate and the built environment. The focus stems from founder Dan Innes who originally trained in Town Planning and ensures the company has expertise from the earliest stages of property development onwards. The aim of the company is simple: to unlock a project’s potential through a deep and thorough understanding of the development’s aims and objectives. One of the most high-profile projects for INNESCO was managing the B2B communications for Westfield Stratford City in London. This project gained worldwide exposure three years ahead of launch, through its opening and the London Olympics. It was a huge project – the largest urban mall in Europe - and INNESCO managed the transferral of the brand culture from the earlier Westfield mall in West London. “We wanted to present Westfield as the most dynamic and innovative retail centre in the world,” says Dan Innes. “A key aspect was projecting Westfield as the key delivery partner for international retailers entering the UK. We promoted Westfield’s now-famous attention to detail in order to maximise rental values,

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pushing key messages at important milestones in its construction and development programme.” The project was a runaway success, with INNESCO driving hundreds of competing media opportunities, and generating circa $10 million USD in PR value in the final 12 months up to launch alone. Subsequently, INNESCO supported Westfield with the remainder of its European portfolio of schemes and developments, including Westfield London. This cemented Westfield’s position as the leading player in the retail construction industry and one of the strongest retail property brands in the world.

Work in the Middle East By definition these Westfield sites are international in nature, drawing a new generation of savvy customers from all over the world and meeting their expectations for the best shopping and dining experience. INNESCO is keen to use this expertise to expand its work abroad and particularly in the Middle East. The success of Westfield has given foreign organisations confidence that a London-based marcomms agency can handle their communication journey. One of INNESCO’s major Middle Eastern projects is the luxury Galleria shopping hub on Al Maryah island in Abu Dhabi. Working alongside the related and Gulf Capital joint venture - Gulf Related INNESCO was appointed to launch the first phase of development to international audiences, and through marketing and PR has generated well over $3 million USD worth of coverage. INNESCO continues to support the leasing and marketing teams on key announcements, events and content marketing. Raising the international profile of schemes like The Galleria is crucial to bringing valuable retail occupiers to these projects and, as an international organisation, this is what INNESCO can provide. By managing the international communication of the project and raising awareness around the world, INNESCO played an important part in Macy’s and Bloomingdale’s agreeing to open department stores

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Retail DAN INNES Dan is one of the sector’s most experienced marketeers. He has worked on well over 150 major property schemes, developments and events across the globe, including Dubai, Abu Dhabi, Egypt, UK, France, Norway, Sweden, Russia and Brazil. He and the wider INNESCO business have gained the trust of numerous clients including AXA, Blackrock, CBREi, Gulf Related, Henderson/TH Real Estate, Hammerson, Hermes, Land Securities, Bouygues Development, Pradera, IKEA Shopping Centres Russia, British Land, Ivanhoe Cambridge, Westfield, Palm Hills Developments, REM-Sellar Properties, Tishman Speyer, and Unibail Rodamco. Today the INNESCO portfolio includes some of the world’s most respected real estate businesses, with a phenomenal network across the world. Dan also sits on the International Council of Shopping Centres marketing committee.

The Galleria on Al Maryah Island, Abu Dhabi

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at the site. This was a hugely significant step as the store will be Macy’s first store outside of the U.S. “It was a fascinating project for the team. The key is awareness and promotion in the right regions, and understanding how media is consumed in the global occupier markets. We provided some important consultancy advice and generated some great coverage, including extensive coverage in Centros Commerciales, Shopping Centers Today,

Innesco

Economia Immobiliare and the Financial Times, both newspaper and online, for the Macy’s deal - just a small indication of the global coverage we can bring,” explains Dan Innes. “As an international, multi-lingual agency, we also deliver best-in-class brand and marketing content – completing the campaign and augmenting the brand.” Integration is a key aspect of how INNESCO unlocks latent value, with completed work in the UK, France, Germany, Sweden, Russia and Poland as well as Egypt, Dubai and Abu Dhabi. INNESCO most recently supported the RLI Global Connect conference in Dubai, notably using social media to raise awareness to international markets. The confidence gained through this and other recent Middle Eastern projects means INNESCO is eager to push on. The Middle East region is a key and growing market for major real estate projects and INNESCO is well-placed, not only to develop brand equity and awareness for these projects to the rest of the world, but also to manage the market’s response to each one. Brand, marketing and communications remain the most powerful tools for unlocking the value and raising awareness of major real estate projects and, with large projects such as The Galleria in their resumé, INNESCO is confident of managing any progressive project wherever it may be in the world.

Further information www.innesco.co.uk

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An unrivalled economic diversity and impressive commercial dynamism are key to South East Asia’s economic growth. UK companies must remain ahead of the curve to take full advantage says Ross Hunter, Executive Director at the UK-ASEAN Business Council

UK-ASEAN Business Council

Roaring into life

With an annual economic growth rate averaging 5%, the dynamic region of South East Asia and the 10 nations that comprise it is celebrating its status as a thriving economic, trading and cultural hub. With state-provided infrastructure buckling against today’s economic growth which has seen consumption soar, tthe region’s infrastructure challenges are accompanied by a growing consumer demand for the UK’s education and international commercial acumen. The UK ASEAN Business Council (UKABC) strives to present real opportunities for UK business in a region that is

entering a new era of economic integration . The advent of the ASEAN Economic Community (AEC) will provide exciting commercial benefits to UK companies who are looking to export to, or invest in, the region as trade barriers within ASEAN are removed. With the region representing the third largest trading partner to the EU, UK companies at all levels of the supply chain must ensure they remain ‘ahead of the pack’ if they are to take full advantage of the region’s growing economic prowess.

Which markets make up ASEAN?

The 10 states that comprise the region are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

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| Left: Ho Chi Minh, Vietnam Below: Sule Pagoda, Yangon, Myanmar

UK-ASEAN Business Council

a heavy reliance on their external markets. Malaysia is hot on the digital heels of Singapore with an advanced, developed economy. Thailand is ASEAN’s second largest economy and although growth has slowed, government spending is increasing. Vietnam and the Philippines have been the darlings of ASEAN over the past couple of years with by far the strongest growth across the region. At the end of 2015 ASEAN became a trading bloc. Leaders in the region have been quick to stress that the new ASEAN trading bloc, the AEC, will not be an ‘ASEAN Europe’. Instead ASEAN will be unified through consensus with no political interference, militarisation or single monetary policy. Its purpose is solely to improve trade relations between ASEAN’s markets which house a population of over 630m people, a sizeable market of potential customers by any standard. Although the United States and Western Europe remain the UK’s largest export markets, it is predicted that by 2030 over half of the world’s trade will stem from Asia with ASEAN becoming the fourth largest economy in the world. We must therefore ensure UK companies begin to look east and consider ASEAN’s high growth markets.

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Which of these are the largest commercially?

The region boasts an impressive average growth rate of 5%. Given the economic stagnation that has encapsulated other global markets over the past 10 years, the opportunities in the world’s seventh largest economy remain impressive. One could describe the region as a ‘box of chocolates’ with the 10 economies at vastly different stages of development but all sharing immense growth potential. The ‘frontier’ markets of Cambodia, Myanmar and Laos are growing above 5%, playing catch-up with the more developed markets of ASEAN. Indonesia is ASEAN’s powerhouse economy, with its 250m population fuelling consumer demand. Brunei is in the process of diversifying its oil based economy. Singapore is arguably one of the most technologically advanced countries in the world with

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Are UK companies lagging behind our competitors in the region?

Other European countries have always had a significant presence in the region, but Japanese and Chinese investors remain present across the whole of ASEAN. The UK enjoys shared histories with some of ASEAN’s markets, but this is no guarantee of future commercial success. Customers want innovative, quality products and this is where UK companies can excel. ‘Brand Britain’ has never been stronger in ASEAN, with the Union Flag seen on fashion accessories to cars. The UK government is playing a key role with a number of high level ministerial visits to the ASEAN with David Cameron visiting the region July 2015. The Prime Minister visited Indonesia, Malaysia, Singapore and Vietnam in four days – an impressive feat, but also politically very important. It was also the first ever visit of a UK Prime Minster to Vietnam. These high profile visits significantly strengthen the UK – ASEAN relationship whilst installing a confidence in UK businesses that wish to engage with the region.

Right: Jakarta, Indonesia Below: The Petronas Twin Towers in Kuala Lumpur, Malaysia are the world’s tallest twin tower

What is the level of infrastructure in the region?

There is a significant infrastructure spend in the region and an even bigger planned spend. It’s difficult, however, to indicate particular industrial sectors as the opportunities are so diverse across the region in scale, sector and complexity. Examples are plentiful, from the construction of numerous dams in Laos to a major rail network currently being implemented from Kuala Lumpur to Singapore. With its severe congestion, Indonesia alone requires an underground transport system 10 times larger than that of London. Given the high calibre of UK expertise in construction projects around existing infrastructure, there is significant opportunity for the UK to share its expertise and win business. How can UKABC help companies engage with these opportunities?

exchanging business cards. However, times are changing and the email should not be the only form of communication with a potential client. Texting (yes the humble text) a potential client is a good way to build rapport and also using apps such as WhatsApp to communicate can result in faster responses. It’s hard for a UK company not to send the traditional email, but supplement it with other communications and build the relationship. Don’t forget the two ‘FFs’ – Food and Football. Food across ASEAN is amazing

The UKABC is reactive to ASEAN’s opportunities with a proactive outreach programme of events across the UK and supporting webinars. With 10 high growth markets we are lucky to host a regular flow of delegations to the UK. These government and private sector delegations present their opportunities to UK businesses. We recently hosted the Indonesian Maritime Minister and, in conjunction with UKTI we offered 10 British maritime companies an interactive session with the minster, something they found extremely valuable and are already in the process of following up. It is hard to do business with ASEAN from behind your desk, so we partner with organisations such as the London Chamber of Commerce and Industry (LCCI), to take groups of UK businesses to the region to explore opportunities and hopefully return to the UK with new business. How important are cultural sensitivities when doing business in ASEAN?

Although there are small cultural nuances that one should be aware of, business remains business. This includes shaking hands, sending emails and

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UK-ASEAN Business Council IMAGES: WWW.SHUTTERSTOCK.COM

and will form part of any successful business relationship. Football is big in ASEAN –the English Premier League is avidly watched across the region and is normally a good icebreaker. Are UK companies frightened of engaging with these markets?

The UKABC aims to ‘demystify’ the region, bringing ASEAN to the UK. However, there is no substitute for actively visiting the market and experiencing the commercial culture first-hand. The difference between operating in Ho Chi Minh City, Bangkok or Manila and European cities such as Paris or Rome is the level of raw energy and commercial drive contained within these emerging economic hubs. Having visited the region recently, the hunger and drive of the emerging younger generation is incredibly impressive. Which UK companies are the ‘trailblazers’?

There are smaller companies represented on the UKABC Board that have relished the opportunities the region affords. ‘Adelphi Digital’’ is a digital company that has ventured into and subsequently based itself in Singapore, one of the world’s most digitally advanced countries in the world. It has then used its position as a springboard into ASEAN and now boasts a physical presence in Thailand. Successfully growing, it is currently investigating its next ASEAN commercial adventure. A number of UK companies have done this in the region– they identify a market to win their first contract and then expand into the wider ASEAN market and beyond.

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ROSS HUNTER Ross Hunter is the Executive Director UK-Asean Business Council (UKABC). Created out of UKTI’s 2011 ‘Britain Open for Business’ initiative, the UK-ASEAN Business Council’s key role is to highlight to UK companies ASEAN’s fast-rising high growth markets, helping them make to an informed choice about their investment/export strategies.

How will the UK and UKABC role change in next 5-10 years?

The UKABC is based in the UK to raise awareness and present opportunities within ASEAN to British companies. This process will become ever more sophisticated in matching specific opportunities to UK capabilities. We cannot work in isolation, though, and we have fantastic delivery partners based in ASEAN designed to help.The UKABC’s partners in ASEAN include the British Chamber of Commerce across the region, which has an excellent business network across all the sectors. We also work closely with UKTI and the other ASEAN trade and investment promotion organisations based in ASEA and the UK to help British companies gain a commercial foothold.

Further information www.ukabc.org.uk

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| Global Opportunity 2015

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Last Word

Lanre Akinola

Scaling up Africa needs to see strong growth across the sectors that most impact citizenry, says media professional Lanre Akinola

he need for large scale infrastructure is ubiquitous on the continent, but it will be worth keeping a close eye on a few key economies. The likes of Nigeria, Kenya and South Africa are among the most important drivers of growth across the continent, and offer the most compelling investment opportunities. From transport, to real estate and communication, to a dire need for more energy infrastructure, all are urgently needed. In the wake of the election of President Buhari in 2015, Nigeria may be the most interesting country to watch. There is no shortage of sectors that are in dire need of more investment across the continent, but their ability to impact the lives of the majority of citizens varies. The natural resource space, for example, attracts vast amounts of capital, but creates virtually no jobs, and contributes only marginally to private sector development. We need to see growth across all sectors to be honest, but wherever possible, there should also be a focus on those sectors that have the strongest impact on the majority of citizens. Some key sectors in this regard are finance (with a focus on promoting access to finance) agriculture and services such as the hospitality industry. These have the potential to generate large numbers of jobs (one of the most important challenges facing Africa) and are more conducive to private sector development. It is also critical that we see meaningful development of the power sector across the continent - some 600m Africans still do not have access to electricity. Addressing this deficit is fundamental to unlocking the commercial potential of African economies. While the rhetoric coming out of Paris is to be welcomed, and marks an important step towards formulating a global response to climate change, it is difficult to see how many nations around the world are going to meet their energy needs without continued reliance of fossil fuels in the short term. The core issue is the tension between the need for

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Global Opportunity 2015

| Issue 02

growth, while ensuring some sort of environmental sustainability. This is a challenge for many countries across the globe, including developed markets, but the pressure is more acute in developing and frontier economies. It is almost inevitable that many countries in Africa will continue to rely heavily on fossil fuels, but there is mounting pressure on governments to develop concrete strategies for sustainable development. This is already happening in some important economies, including Kenya and Morocco. The COP 22 outcome must be welcomed as an additional incentive for countries to adapt new growth strategies. The climate for such policy innovation has arguably never been better. There is no doubt that investment into renewable energy and “green growth” will ramp up substantially in Africa in the next few years. Governments are increasingly prioritising the shift away from fossil fuels, driven in part by global trends, including the redefining of the energy industry, which is at least talking the talk around becoming part of the solution on climate change. Backed by advancements in technology, the ‘green’ sector looks set to take off it is a good one to look at in Africa right now. It’s great news that Africa’s economies are seeing sustained GDP growth, which is in turn fueling unprecedented investment across the continent. That said, the ultimate purpose of growth and investment ought to be having some material (ideally positive) impact on the majority of citizens in a given country. In order for this to happen in Africa we need to see labour intensive and enabling industries grow significantly. These include agriculture, retail and finance, but if you can only pick one, the energy industry will arguably have the single biggest impact. Nothing puts more of a constraint on Africa’s economies and its citizens than the absence of power. Providing the majority of people on the continent with access to electricity - even if nothing else changes - will be nothing short of a revolution.

Lanre Akinola is a media professional, based in London. He formerly edited the Financial Times’ This Is Africa publication. He is currently the editor of African Business, works with the Business Council for Africa, and is a 2014 Desmond Tutu Leadership Fellow.

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