SMEs given a “headstart” to set up in south-east Asia

A service to provide practical support for SMEs to export to high-growth markets in south-east Asia has been launched at the UK-ASEAN Business Council (UKABC). 

Trade and Investment minister Lord Green launched the initiative, called Headstart. “We want to see another 100,000 businesses exporting by 2020. Helping more small firms to do so is vital to securing a return to long-term and sustainable growth”, he said.

The initiative will help SMEs seeking to export to Asian markets for the first time, offering access to local business networks, introductions to already established UK companies, and temporary office space with the local British Chambers of Commerce (BCC).

The initiative is available to companies with up to 250 staff and maximum annual turnover of up to £25m. This is at a nominal fee, between £220 and £550 collected by the local chamber yearly.

Headstart will initially be offered as a six-month pilot in Singapore, Thailand and Indonesia. If successful, it is to be rolled out to other countries in the region.

“This pilot is a perfect example of the practical support which the UKABC is providing to UK small and medium sized enterprises, enabling them to make the most of opportunities in south-east Asia,” said UKABC chairman Lord Davies. “There are many more British businesses who could be exporting to south-east Asia and we’re here to support them as they take that first step on the ladder.”

The service is a partnership between UK Trade & Investment (UKTI) UKABC and the BCC in Singapore, Thailand and Indonesia. Headstart is built on a model developed by UKTI’s delivery partner in China, the China Britain Business Council.

“Many more British companies could be exporting, but we know that striking out into new and unfamiliar markets can sometimes look daunting,” said Lord Green. “Headstart will help small and medium-sized companies seize the many opportunities in fast-growing economies of south-east Asia by connecting them with local support quickly.”

In comparison to France and Germany, British international trade is low, representing only 20 per cent of all UK business export. But the south-east Asia region has seen a steady sustained economic growth of between five and six per cent per year – three times the EU’s two per cent. The ASEAN middle classes also have strong appetite for branded western goods. Some 50 per cent of the population own a smart phone, a figure estimated to rise to 70 per cent by 2020 as handsets become more affordable.

The ASEAN market is a huge opportunity for SMEs, but also a great challenge. Exporting companies have to overcome numerous hurdles, some unexpected. Problems range from cultural barriers, time, distance, to infrastructure and corruption. However, SMEs can learn from large international organisations, such as Boots and Tesco, that are already established in the world’s hyper-growth region.

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