BRIC countries to boost UK exports

Citation

(2011), "BRIC countries to boost UK exports", Strategic Direction, Vol. 27 No. 7. https://doi.org/10.1108/sd.2011.05627gab.001

BRIC countries to boost UK exports

Article Type: Competitive horizon From: Strategic Direction, Volume 27, Issue 7

Accountancy giant Ernst & Young has issued a report predicting a decade of growth for UK exports. During this period, annual expansion of 8.5 percent is forecast. The report, as published by the Engineer (www.theengineer.co.uk), claims that BRIC (Brazil, Russia, India and China) countries will mainly drive this growth. At present, 5 percent of UK goods and services are exported to these markets. To 2020, Ernst & Young forecasts that the value of UK exports to BRIC countries will increase by 11.7 percent each year. Weakness of sterling is cited as a key reason for the greater competitiveness that will also inspire increased activity in more traditional overseas markets like Europe and the United States. Over the next five years, it is estimated that exports will account for 0.5 percent of GDP growth in the UK. However, the report does suggest that regulatory barriers may impede export activity to BRIC economies and other emerging nations. It is therefore suggested that the UK government should help firms by building positive relationships with their counterparts in these countries.

World urbanization set to increase demand for copper

Statistics show that around half the world’s population live in urban areas. It is estimated by the United Nations that this figure will rise by 1.5 billion by 2030. According to a report published by Mineweb (www.co.za), this will significantly impact on copper consumption. Much of the anticipated greater demand will be driven by India and China, countries accounting for a sizeable percentage of global population. Growing urbanization in these countries will require massive infrastructure upgrades. In India, 340 million people are currently city dwellers but by 2030 the number may swell to 590 million. Power production will need to increase by up to 20 percent each year, meaning a huge rise in the demand for copper. Even by 2012, annual consumption is expected to more than double to almost 1.5 million tons. Urbanization in China is currently lower than in most developed nations but the government intends to markedly increase the rate of migration from rural areas. The effect on copper consumption will be equally substantial and by 2020 present demand is forecast to double.

Improved business environment by 2014 is South Korea’s aim

South Korea has announced a three-year plan to significantly upgrade its business environment, a report published by the Korea Times (www.koreatimes.co.kr) points out. A desire to attract more foreign companies and investors into the country is behind the initiative. The government plan will focus on removing bureaucracy to make land acquisition a more straightforward process for firms. Improvements to labor relations are also on the agenda, as is a pledge for better protection of intellectual property rights. The aim to attract investment will additionally include providing foreigners with better education and healthcare amenities. Financial backing from overseas investors and organizations is seen as crucial to the completion of several costly building projects involving such as industrial plants and commercial nuclear reactors. South Korea is expecting to confirm free trade agreements (FTA) with the European Union and the United States in 2011. The report notes that attracting investment is therefore seen as crucial to electronics, automobiles and other industries likely to benefit most from these agreements.

How to best service existing customers

Evidence indicates that it is up to five times cheaper to retain an existing customer than to secure a new one. Nevertheless, each year the average firm will lose around a third of its patrons. But improving customer service can help address this problem, as a report published by www.business2.com points out. To start with, it is vital that companies are aware of customer needs and the way to find out is by listening to them. A good idea in this respect is to conduct random surveys of regular clients. Involving employees in these processes is recommended as it encourages them to accept greater responsibility for solving customer issues. Effective communication and a rapid response are both vital though, otherwise customers will become disillusioned and look elsewhere. The report also notes the importance of delivering on promises, and the risk inherent in making unrealistic ones. Things will inevitably go wrong sometimes but how a company reacts to its mistakes is what matters. Any party affected must be kept fully informed and the firm needs to swiftly make amends in a way that is most appropriate to the customer.