World business leaders select UK as the second most desirable country in the world for businesses to expand into - narrowly behind US
The UK has been selected as Europe's most desirable country, and second in the world, by companies looking to expand their business overseas, according to The art of connecting global business, an international report published by BT.
The report surveys 1150 business decision makers based in 13 regions around the globe, exploring the reasons for international expansion, which markets are desirable and why, the effects of being a 'digital first' economy and barriers to expansion.
BT is launching the report to mark the opening of the International Festival for Business (IFB) 2014, a 50-day festival taking place in Liverpool, UK, in June and July. It will be a global showcase for great UK industry, bringing together business leaders from 125 countries to release the potential of economic growth. BT is an official partner for IFB 2014, the biggest business event of the year.
The survey finds that an overwhelming 80 per cent of business decision makers believe that international expansion is highly essential for the success of their organisation. Seventy-five per cent say that growth opportunities are the main reason prompting them to look to expand overseas. The survey also highlights several technology factors that businesses look for when expanding into other countries, with 62 per cent of respondents flagging the quality of IT infrastructure and services, 60 per cent the quality of digital and communications infrastructure and 52 per cent the IT skills of the workforce as being important in decision-making.
Luis Alvarez, chief executive officer, BT Global Services, said: "It's great to see so many executives around the world aiming for international growth. Those countries rated as highly desirable places to expand into not only have economic potential but the right blend of business culture underpinned by an extensive digital infrastructure, skills and sound regulation. In this environment BT is delighted to play a key part in helping take UK business to the world and in bringing world business back to the UK."
Despite the rise of the 'BRICS' (Brazil, Russia, India, China and South Africa) and 'MINT' (Mexico, Indonesia, Nigeria and Turkey) economies, the report finds that established markets remain the most desirable to expand into.
Overall, the US is the most desirable for expansion (33 per cent), followed by the UK (30 per cent), China (29 per cent), Hong Kong (27 per cent) and Germany (26 per cent). The top three countries were ranked highly based on their potential customer base and the average affluence and disposable income of their citizens.
The UK is widely cited for the perceived quality of its governance and regulation around IT security and data protection. Thirty seven per cent of respondents highlighted this as an attractive characteristic, reflecting the importance of the quality of IT infrastructure to expansion plans. More than half (51%) of respondents in India see the UK as highly desirable.
The survey also highlights the countries that UK businesses believe to be highly desirable for international expansion. The US comes out top (33 per cent), followed by Germany (29 per cent) and then China (28 per cent), with their potential customer bases being cited as the most important reason.
Significantly, 91 per cent of businesses say that if a country is a "digital-first" economy then this is of "great help" when expanding into it. "Digital-first" economies are those which have a ubiquitous, nationwide, high speed internet connection.
The challenges that organisations face when they are looking to expand internationally are also emphasised. Thirty seven per cent of firms globally still don't have the technologies needed to achieve their international ambitions. This is the top internal barrier to international expansion, ahead of personnel issues (31 per cent), logistics (30 per cent) and regulation and tariffs (29 per cent).
Alvarez continued: "It's clear that many firms aren't equipped with the communications and IT networks needed to deliver success. Networks can transform the environment in which businesses operate, at home and abroad, allowing entrepreneurs to orchestrate their business and bringing people together to help them share skills and solve problems. They help identify opportunities and allow us to deliver great business outcomes."
Crispin Simon, chief executive officer of UK Trade and Investment (UKTI), said: "We are making the UK the best place to start and grow businesses and I am pleased that this report reinforces our position as the number one location for inward investment in Europe."
"The UK has always thrived on openness and we realise that the welcome we extend to those who invest here is critical to securing our country's long term future."
"Inward investment from high growth markets such as China is at an all-time high and UKTI will be working hard at the International Festival for Business to encourage more international firms to set up and grow their businesses here, creating jobs and growth for the UK economy."
Max Steinberg CBE, chair of IFB 2014, comments: "The International Festival for Business will be the perfect time to showcase the optimism and investment opportunities that Britain has to offer. BT and UKTI are working hard to demonstrate Britain's competitive advantage. This research shows the rapid rise of our status in the global economy. It leaves me hugely confident for the connections and export growth that will occur as the world's business community gathers in Liverpool this summer."
