Everyone recalls the outstretched finger of Field Marshal Lord Kitchener, who died 100 years ago next month. ‘Your country needs you’ was a compelling message that conveyed a sense of common purpose.
Today we need a similar clarion call to business. As we debate our position in the EU, and whether a legacy industry such as steel can be sustained in today’s global market, there’s a clear need to rally our business around a new mission — focused on accelerating growth by going global.
I know from experience just how important a call to action can be. In 2011, I was one of a group of entrepreneurs who, working with Downing Street, devised and launched the StartUp Britain campaign to inspire people across the UK to pursue entrepreneurship. It was one part of a nationwide groundswell, and the upsurge in business creation was one of the pivotal factors that helped lift Britain out of recession. In a short time the UK went from being a relative backwater for enterprise to become a world capital for business creation. In the 2014 Global Entrepreneurship Index we rose from 14th to fourth in the ranks of the world’s most entrepreneurial economies.
Now the focus needs to shift to the next phase of enterprise. And this is the message that needs to be broadcast loudly and clearly: start-ups, your country needs you to scale up. Sherry Coutu, the ‘angel investor’ and founder of the Scale Up Institute, has estimated that unlocking the UK’s scale-up potential could be worth 150,000 jobs and a £225 billion boost to the Gross Value Added measure of UK goods and services by 2034. That is a huge economic prize — and after all the progress and innovation of the past half-decade, the UK is perfectly positioned to pursue it.
Politicians often like the analogy of the global race for growth. But this is no canter. If you want to start scaling, you need to start sprinting. I spoke at an event at London’s Digital Catapult Centre recently with Saul Klein, a renowned tech investor, who said: ‘Building a scale-up is like sprinting up a mountain.’ Given the UK’s relatively small domestic market, a big part of that sprint must involve entering international markets. Going for growth will often mean going global and being bold about it.
At a recent conference focusing on the Aim market, I interviewed Charles Rolls, who in 2005 co-founded the premium drink-mixer brand Fever-Tree — one of the great British growth stories of recent years. This business trades today in more than 50 markets, with over 70 per cent of its revenue coming from exports.
When considering exports, many entrepreneurs get worried about different cultures, languages and business practice. But the Fever-Tree message is that simplicity always translates. What’s simpler than the idea that if three-quarters of your drink is going to be a mixer, you may as well make it a good one?
I was taken by Charles Rolls’s example of how his business broke through in the US: not with its tonic water, as he had expected, but with ginger beer. Unexpectedly, they were in the right place at the right time to capitalise on the Mad Men-inspired renaissance of classic cocktails. There’s a thought: in Moscow mules the length and breadth of the Eastern Seaboard, it’s a British brand that is slaking American thirsts.
Other exporting entrepreneurs advise that careful selection of new markets is key. In 2005 Sara Murray founded Buddi, a British location-tracking and health-monitoring firm. She soon found she had a global product on her hands. Now three quarters of the company’s revenues are from overseas. By the end of this year she believes that figure will be 85 per cent.
Her advice is that you need to pick your markets carefully and go for countries where you can recreate the circumstances that worked in a domestic context. Buddi has found success in overseas markets where the needs of its customers are similar to the UK: Commonwealth countries including Australia, New Zealand, Canada and Malaysia. ‘Don’t just go anywhere,’ she cautions. ‘Identify a market where there are some of the same factors that worked for you the first time.’
Like any other commercial endeavour, you’ll need the right mix of risk appetite and reality checks. Take bold steps, but not before you know where your feet are going to land. Companies need to be supported with the right advice, and more could benefit from the services offered by the likes of UKTI, the government’s trade agency, and its near-relation the ‘Exporting is Great’ campaign. On the private-sector side, Emma Jones’s Enterprise Nation has run trade missions which can help companies to take their first global steps. Let them know you are here.
Of course, mention exports and you light one of the blue-touchpaper issues of the EU referendum debate. Does our membership enable seamless trade with Europe or inhibit it with the rest of the world? Should we be protecting the trade agreements we already have, or extricating ourselves to start again with a blank page?
The reality for business is less clear-cut than many Leave or Remain campaigners would have us believe. To accelerate a scale-up, you will generally need markets both within Europe and beyond it. Whatever the referendum result, the reality of European countries as key trading partners will not go away. They will be as necessary as they ever were; which is to say, one important part of a bigger picture. We need to trade with Europe and with the rest of the world, and the focus should be on how to enable that, and not on a false dichotomy of one or the other. In or out of Europe, we need scale up businesses to blaze a trail that supercharges our export-import balance sheet.
The past five years has been a story of far more than mere business numbers — it has also been a tale of pioneering new technologies and industries in which the UK has quickly become be a world leader.
Industries like financial technology, in which UK firms such as Funding Circle and TransferWise are taking a lead in ‘replumbing’ the global financial infrastructure with more efficient and consumer-friendly systems. Like artificial intelligence, where British scale-ups including DeepMind (founded in 2011) and SwiftKey (2008) have been acquired by Google and Microsoft respectively. Or cyber-security, where our GCHQ heritage has helped spawn success stories such as DarkTrace, founded in 2013 and already valued at $100 million.
The UK can become a scale-up success story not just as a platform for brilliant businesses, but as a proving ground for industrial evolutions and revolutions of global importance. Growth sectors and growth companies — your country needs you.