UK Trade and Investment (UKTI) is looking to link start-up businesses with US venture capitalists as it looks to plug gaps left by the UK financial services industry. Speaking to Insider in Bristol, chief executive Nick Baird said that private equity needs to take over from the banks.
Baird said: "We’ve had to look at the capacity here in this area. The banks do not have much flexibility because it’s high-risk capital, so we need to get businesses in front of more venture capitalists and private equity players. We’re getting start-ups in front of US VCs who they’d never get a chance to meet without support."
Baird was in Bristol for the regional final of the Export for Growth prize, which was won by local business Nu Desine. The company's Adam Place is the inventor of the AlphaSphere, a new electronic musical instrument which can be used with music software and synthesizers to make the process of producing electronic music a ‘playable’ experience. He will now benefit from £5,000 in support from UKTI, PwC and HSBC.
UKTI’s regional director Russell Jones said: "The South West is a positive place right now – there are certainly plenty of companies coming to us who know that growth will come through exports. This region has more applicants than any other for our Export for Growth prize. Ninety per cent of our customers are SMEs and we’re keen to work hand in hand with as many as possible to maximise export values."
Baird was similarly bullish on what UKIT can do with those looking to enter new territories, although he warned that it’s not purely a matter of supporting manufacturers. "The reputation of UK financial services in the growing territories is consistently high and the big banks continue to succeed. Our accountancy and law firms are acknowledged as world leaders. We do need to support manufacturers – and they will play a bigger part - but not at the expense of services. There won’t be a massive shift.
"In high-end manufacturing, particularly around the Bristol area, there have been huge successes, showing that those who said in the 1990s the UK had no manufacturing future were wrong. The likes of Tata, Shanghai Automotive and BMW wouldn’t invest heavily here otherwise – Nissan uses its UK supply chain to support Japan, it has such faith in it."
However, Baird did acknowledge that it is harder for manufacturers, especially smaller businesses, saying: "It’s true that restrictions and barriers to market are stronger for companies with physical goods, the service economy operators who can cross borders virtually do find things easier."
PUBLICATION: Insider - 26 March 2012