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Cameron’s mission for SME trade with India

It may have been the helicopters and metro system deals which grabbed the headlines, but among the hundred British businesses represented on David Cameron’s barter mission to India this week, 30 were small businesses.
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Sceptics might wonder if any extra sales that SMEs win could justify the costs of such a big junket – Britain’s largest ever. Delegates do pay their own way, and for smaller firms that’s more laudable, but it’s the public purse that makes the whole thing possible. Taxpayers might like to know whether it’s cost-effective.

A recent study by researchers at the University of British Columbia found that despite Canada’s hefty programme of trade missions, there was no evidence that they boosted trade. After being quizzed on Thursday about this by BBC’s John Humphrys, the former trade minister Lord Digby Jones could only argue that you cannot prove a negative. “The effects of the prime minister’s presence couldn’t be quantified because how would we know what trade would have happened without him?” he said.

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Getting in the top brass certainly worked for one British innovator. William Beckett, director of Hip Impact Protection, says that without David Cameron the top CEOs and chairpersons of India’s healthcare outfits wouldn’t have been there. Did it boost sales? Let’s just say Mr Beckett will be spending a lot more time in Mumbai.

However, it may be that Indian entrepreneurs blaze an even brighter trail over here. In’The Immigrant Exodus, Vivek Wadhwa’, guru entrepreneur of Duke University in the US writes that 52 per cent of fledgling Silicon Valley businesses from 1995 to 2005 were founded by immigrants who went there to study. On average, they started their first company 13 years after arriving: “They didn’t come as entrepreneurs. They came to study in American schools and caught the bug.”

So, Cameron is probably right to ease visa rules for Indians studying in Britain. A crackdown on student visas – at London’s Metropolitan University, for example – saw 10,000 fewer last year. And there’s little tradition of British students travelling to Indian colleges; the latest British colonisation of Indian markets seems motivated more by untapped potential than by studying their entrepreneurial ways.

Len Schlesinger, president American MBA factory Babson College, argues that business teaching here fails to encourage study of enterprise skills. “An entrepreneurial education shakes students out of a world of passive learning into one where they must stand on their own feet as decision makers.” He believes that the British tendency towards reliance on corporate employment is irresponsible when there’s a jobs crisis simmering even in fast-growing economies like India.

The India trade jolly, according to the government, aims to dovetail India’s strategic growth with ours. In a glossy booklet produced by the British High Commission in New Delhi, the government airily suggests that the two countries can somehow “complement each other through trade”. Nebulously, the booklet says they can “work in partnership” and collaborate to mutual benefit. However, one country has an average per capita income many times higher than the other, so margins for our exports will have to be pretty thin to make money there.

The government is also spending £8m on a network of Business Centres providing support for British firms in India. The deals cited by the department for trade are modest; 20 Wolverhampton jobs linked to British Health Care’s GP project Delhi, 25 architectural jobs in Benoy’s Newark offices for Indian skyscrapers and shopping malls, while in Hampshire, Porvair’s workers will make filtration equipment for the Jamnagar refinery. Modest or not, that’s missing the point. Current thinking is that it’s the smaller business sector that will get our economy growing again.

Nigel Lang runs Flitabout, a clever ideas implementation company that helps British startups in India. “It’s important for small firms to expand overseas because the UK market is limited and competitive, whilst somewhere like India has a vast hunger for British skills and products, with massive growth potential.” William Beckett says timing is crucial: “We have a five year patent licence to develop a market for this material, so we want maximum scope to do that, and India is huge.”

That chimes well with the government’s growth plan, launched by Vince Cable two years ago, in which the coalition pledged to make Britain an ideal European base for starting a business. Ask Mr Lang why the government has such faith in small enterprises, and he has no doubts: “There are a lot of them and they are more nimble, flexible and therefore resistant to downturns and market forces.”

So, while Debenhams opens ten new Indian stores, and Brylcreem starts selling glossy styles to hirsute Indians, this nation of shopkeepers and the nation of “slumdog millionaires” will hopefully trade their way out of recession. With the small business mantra of SPQR –small profits; quick returns – hope that the Whitehall mandarins deliver a new economic prosperity to a generation of Angles and Asians.

Bruce Whitehead’s column on Real Business explores the latest political developments and their effects on UK businesses.

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