You also have UKTI experience, so you are keenly aware of the commercial imperative. British business is punching below its weight across this region - as an investor and as an exporter.
I’m no business historian, so I don’t want to speculate on the reasons, but I must acknowledge that there’s a huge opportunity in across this region which we’ve not taken up yet. Across CEE – in Poland in particular – there are some strong British companies which have done great business here. [You can read about some of them in this issue of Contact Magazine Online – ed.] The opportunities for others to come here are very great indeed. Our Germans friends and competitors have been able to achieve success in these markets since the end of communism. How we going to get more British companies coming to do business in Poland and CEE? The biggest challenge among British SMEs is their lack of knowledge of this region. Many are new to exporting, or else are non-regular exporters. Many are familiar with the markets of Western Europe or English-speaking countries and feel more comfortable there. This is a big barrier.
What needs to be done to tackle the UK's growing trade deficit in goods and services - with Poland? Who's role is it to encourage UK exporters to take a closer look at this market and make more of the opportunities that exist here?
Who should help? Government does have a big role. Responsibility? The British Government is using the GREAT campaign to encourage SMEs to look overseas, to try their hand at export. Compared to our continental neighbours, a low percentage of British SMEs sell their goods or services abroad. So it’s about encouraging and enabling them to look overseas. Step two is to persuade them to look at opportunities in CEE. The GREAT campaign has been building up a strong brand to support British exports, and UKTI and BIS events – and increasingly the internet – are driving interest in CEE markets. The Government’s aim is still to double the number of British companies that are exporting by 2020, starting from a 2012 baseline. The prospects are good – as soon as we start talking, we find they’re extremely keen to come here. With the help of Embassy and the BPCC’s Trade Team – British business can find partners and make money. Across the region, the British Embassies have 80 people promoting business; we have six business centres targeted at SMEs – in Warsaw, Prague, Budapest, Bucharest, Bratislava and Ljubljana.
We’re helping bigger companies too. They are more able to make analyses of where they want to trade, and they’re likely to get referrals from those larger British businesses that are here already. The Embassy, with its contacts in government, is well-placed to help British firms win contracts where opening doors is needed – sectors such as defence, energy or infrastructure. We have identified high-value opportunities for UK businesses in six such strategic sectors across the region. Our embassies hold regular planning sessions looking at these strategic sectors, reviewing the best opportunities. Dedicated teams linked to each of those sectors work across the region. British embassies are an ideal partner. A big UK company comes in to the region and benefits from our advice. We can offer them a competitive advantage. There’s a different business culture here to the one found in countries in which British companies tend to have done business before.
UKTI is active across the UK regions. It takes part in trade fairs and bumps into a lot of good British companies around the UK. Representatives of the Overseas Business Network Initiative [OBNI – of which the BPCC is a member] also travel around the UK and recruit British businesses who are looking to enter export markets. Together, we are building up a database of business-to-business and business-to-consumer export opportunities, through the UKTI business portal. The idea is to flag up what UK exporters have to offer, and what foreign markets are looking to buy. The database acts as a kind of dating agency, introducing companies to one another across borders – and when that works – we hope in due course, this will result, to stretch the analogy, in profitable children!
It’s about breaking habits and customs. Companies often say that they are happy with their current supplier, be it from Germany, Japan or wherever. But we may well be able to find them a supplier that’s cheaper or better – or both – from the UK. By giving companies the facts, they may well end up sourcing from Britain. These are the challenges of the globalised world – the geographical element is receding. The supply wagons from Poland to the UK are coming back empty. Because of Poland’s trade surplus with the UK, there are many transport companies who are have great deals on shipping costs from the UK to Poland. What many are bringing back to Poland at the moment is waste, which gets used for waste-to-energy – low-value commodity – taking advantage of cheapness of transport. But this is also an opportunity for manufacturers making higher-value products.
British businesses should come to take a closer look at Poland. The large number of low-cost air routes and the fact the flying time is just over two hours, means you come and go in a day – and you can do a lot of business in a day.
I’m happy that Poland’s exporting to UK. As a rule, investment follows trade. Good Polish companies are beginning to internationalise and the UK is best place for Polish companies to go global. The UK is a place to find business contacts and financial expertise – it’s a great springboard to world markets, the best place to start from. A company from Poland that sets up in the UK can use the Made in UK badge and is eligible for UK Government export support services. I’m very interested in Polish companies taking a look at the UK from the point of view of setting up there – very interested in Polish companies employing people in Britain, paying taxes in Britain, thriving, exporting all over the place – the UK has much experience in markets such as the Middle East, North and Latin America, Africa, the Far East – places that are far less well-known to Poles than to UK-registered companies.
Public procurement in Poland is criticised roundly by many foreign investors striving to win contracts here. One problem mentioned by them is the focus on 'lowest price' rather than total cost of ownership. Another is the poor standard of professional training offered to public administrators engaged in procurement. Contracts worth billions of euros are at stake - funded by taxpayers across the EU including those in the UK. What can the British Government do to help improve Poland's public procurement?
Deputy Premier Morawiecki has outlined his plans for reform, and his blueprint for growth does cover elements around procurement. He acknowledges the weakness of the lowest bid approach and is looking at encouraging a greater emphasis on value for money. We keen to offer British experience and best-practice in this area. We’d also hope to talk about other aspects of his blueprint as well – innovation and start-ups. Our relationship is good enough for us to be able to offer experience.
Winning the big procurement projects is about spotting the right opportunities at the right time. We are set up better to do this now. It’s no coincidence that a priority area for the Embassy’s work is around infrastructure and energy – renewable, traditional or nuclear – to find those opportunities around the big project. Not always is the lead contractor that’s British. It’s equally important to get UK firms into the project supply chains – into the winning consortia – hence the importance of intelligence around those tenders. When this works, it results in very big wins. British project management expertise is internationally recognised.
You mentioned professional training. British professional bodies such as CIPS, RICS, ICAEW, ACCA etc are present in Poland and the services that they supply, training, examinations, certification, all help enhance the quality of Polish professionals as well as being business wins for the UK. As a member of CIMA, I can see how British professional services act as bridges – the quality of institutions can contribute not just commercial benefits.
Should the British nation decide to leave the EU, how would Poland react? What would be the impact on migration, trade and investment and geo-political relations?
It’s not useful to hypothesise at this moment. The result of an ‘in’ vote will mean implementing the deal that David Cameron negotiated at the February meeting of the EU Council. We need an organisation better fit for the 21st Century, we need to tackle thorny institutional issues. But above all, we should be talking about business – about boosting the EU’s global competitiveness. Should the vote to remain happen, we will be looking to make the most of that opportunity to improve the Single Market for trade – creating a genuine single market for services – and in particular digital services. This is the future of trade, the UK is a leader in digital services, we should make sure EU will be ready to compete.
Moving away from matters economic - this year marks the 400th anniversary of Shakespeare's death. The UK leads the world in the 2015 Soft Power Ranking by Comres/Portland Group/Facebook. How will the global celebrations of Shakespeare help boost Britain's global appeal? How important is soft power – influence over others not using economic nor military coercion – today?
Soft power counts. It sets an atmosphere or image – when Poland thinks of the UK, the more positive that image, the more it will help us. Business already has positive image of the UK as a modern country with great culture, whizziness and reliability. It is the sort of image – this mixture – that we can enhance to show a 21st-Century offer of the UK to Poland. There’s Tech City and the games and apps and B2B communications and online security products that are made there – there’s the celebration of Shakespeare – there’s the strong sports heritage which chimes with some people – there’s fashion – in each of these areas, there’s GREAT branding which extends our image – the parts of us that we want to stress – shoes and lasers, footballers and the stage of the Globe Theatre. The 400th anniversary of Shakespeare’s death creates another opportunity to show another element of our culture, following on from the 2012 London Olympics, the premiere of the latest Bond film – the big exhibitions – our high tech and expertise – each one moves us along, but all together they help Britain. It helps raise their [Poles’] eyes their from near-neighbours to alternatives – it helps to get them thinking about the UK – positively.
Finally, a few words about yourself for the members. What’s Jonathan Knott like?
I have a young family – this is first and foremost my joy. I like to spend as much time with them as I can. I take an active part in sports – I play five-a-side football, I run – I will be taking part in the forthcoming Constitution Run, I swim regularly, I play tennis. In Hungary, I took up water polo – the national sport there. I’m looking to try handball here in Poland, though I fear it may be too much of a contact sport for me. I also enjoy watching sport. The Legia stadium is next door to the Embassy, I look forward to seeing a game here. And this summer, there’s the Euro 2016 football championships in France. I hope that England meets Poland in the final – and I hope that Poland comes second!