Business secretary says there are 'exciting' opportunities in emerging markets because their economies are doing better than those in the developed world
Lord Mandelson today said that the global recession had been a "wake-up call" that should encourage British firms to do more business in countries such as China and India.
The business secretary said there were "exciting" opportunities in emerging markets because their economies were doing better than those in the developed world.
He made his comments in a speech that coincided with the publication of a government survey showing that almost two-thirds of UK companies expect to earn more than 20% of their revenues from emerging markets within the next five years.
Some 60% of the 540 senior executives from 19 business sectors questioned in the survey said they expected to reach this level by 2014, almost doubling the 31% who say they have already done so.
Some 77% of the companies questioned said that they expect the prospects for the world economy to improve during 2010-2011, with emerging markets providing support for global profitability.
Addressing the Economist newspaper's emerging markets summit in London today, Mandelson said: "UK businesses should be strategic about their exports and plan for the long term. Many emerging markets are outperforming developed economies, and are expected to grow strongly for years to come. This represents an exciting opportunity for UK business providing greater diversity for the exporter."
Today's report, entitled Survive and Prosper, notes that emerging economies outperformed those of recession-hit developed countries in 2009.
China was cited as the preferred investment destination over the next year by 45% of business-owners questioned, followed closely by India (43%) and other Asian nations (35%).
But half of respondents said that political risks – including the dangers of nationalisation and expropriation – were the main obstacle to doing business in these new markets.
Mandelson said: "The global recession was a wake-up call for companies to diversify their export base and seek out new opportunities in the emerging world. UK business needs to adapt its strategy accordingly to reap long-term rewards."
The UK's bilateral trade in goods and services with key emerging markets has doubled from £58bn in 2000 to £104bn in 2007, according to business department figures.
Today's survey suggests that UK businesses are looking beyond the so-called Bric countries (Brazil, Russia, India and China) for new markets, with Vietnam ranked as the next most interesting destination, followed by the United Arab Emirates, Mexico, South Africa and Malaysia.
Copyright Speakers Corner 2016