Adam Smith’s An Inquiry into the Nature and Causes of the Wealth of Nations (1776), is one of the most influential books ever written. In those days importing goods from abroad was seen as bad because national wealth (gold and silver) had to be used to pay for them while exporting goods was seen as good because that wealth returned in exchange for those goods. Adam Smith, in contrast, argued that in a free exchange, both sides became better off. Imports are just as valuable to one country as its exports are to another. Thus, mutually beneficial trade increases prosperity as much as any other economic activity: no longer its stock of gold and silver but the total of its production and commerce being the true measure of a nation’s wealth.
And so this week to Krakow, the first stop on a UKTI Emerging Market Mega Mission, a five day, five city introduction to the huge trade opportunities of the markets of this region. Over 60 UK companies are on the mission, exploring for themselves what the market has to offer and to meet potential trade partners and distributors. I was there to take part in a panel discussion on the practical aspects of doing business in Poland, looking at legal, real estate, logistics, recruitment and financial issues. In one sentence my conclusion is that this is a great market provided you have done your homework. You need to be slightly more careful than you would be at home which means, above all, having suitable signed agreements in place. In my experience, alas, folk tend to be slightly less careful than at home and therein lies the road to ruin (alright then: disappointment, frustration and expense).
Not before time, you might think, HMG is now taking exporting seriously. The target is to double total UK exports to £1,000 billion in value by 2020 and to increase the number of UK companies exporting to 100,000. While the largest companies have always been able to look after themselves and attract suitable diplomatic support, SMEs need more help. To this end there is a new approach. Put simply, this means trying to pull the exporters out of the UK by identifying specific opportunities and making initial contacts rather than waiting for the exporter itself to ask about, and to be sold an expensive report on, the market. As part of this initiative, there is a programme to devolve more of the basic trade support to those chambers of commerce able to do it effectively (which includes the British Polish Chamber of Commerce – thank you for asking) leaving embassies to concentrate on commercial diplomacy. A splendid new British Business Centre has opened in central Warsaw and similar centres are springing up elsewhere in the region, each of which provides a place to meet contacts, find out more about the market and generally to be enthused about trade opportunities.
One of the first fruits on this new approach is current export marketing initiative for British food and drink to Poland. Under the UKTI “Great” campaign and run by the BPCC, a three stage market entry programme has been launched. Designed to take UK producers from market analysis, to testing which products will appeal to consumers and on to placing them on the shelves, this is the biggest campaign of its type ever and a clear demonstration of the benefits of a carefully thought out and focused approach. It may, to some eyes, be nothing more than common sense but it’s surprising just how uncommon common sense is when you look for it – especially in government. Be that as it may, I have just come back from the first tasting session and I look forward to seeing these excellent food and drink products – particularly cheese – more widely available here. The UK has much to offer in this sector but has hitherto been pretty feeble in bringing these products to new export markets.
Of course exports, like man, cannot live on bread (or cheese) alone but it is a welcome addition to the UK export product range. As I have written before, the UK has more varieties of cheese than France and yet French cheese is everywhere whereas British cheese is quite thin on the ground. That needs to change. The Polish economy is expected to grow strongly this year. The UK is already Poland’s second largest export destination after Germany but is only in 9th position in the list of Polish imports. There is therefore plenty of scope to send British goods to Poland for those UK companies prepared to seize the opportunity.
There has never been a better time for UK companies to trade with Poland: don’t delay, do it today.