| I would like to thank the Members of
the Chamber for inviting me to lunch and providing me with the opportunity
to speak to you today. It is a real pleasure to be in Thailand and to have
the chance to meet you in such a famous hotel.
As the Minister responsible for Trade and
Investment, and for the UK’s relations with Asia, my visit to the region –
I am also visiting Cambodia and Laos – is primarily focussed on the UK’s
business relationship with the region.
But I can’t make any speech without referring to
the recent tragic events in London. One of the many strengths of living in
a global village is that we learn from each other, share wisdom and build
a common language of understanding. Yet one of the challenges of our world
is that negative ideas based on fear, misunderstanding and distrust can
spread just as easily and find manifestation in the bombings that we saw.
There is and can be no excuse for such acts and I would like to thank all
of our friends in Thailand who have expressed such support and warmth for
the people of London.
London is unbowed by such acts of terror and
continues to lead the UK in attracting inward investment from overseas. So
I would like to take this opportunity to tell you more about our position
on inward investment and how you can grow your business in the UK as well
of course as commenting on our bilateral trading relationship.
On June 29 this year I had the pleasure of
announcing the results of UK Trade and Investment’s Annual Review - UK
Trade and Investment being the lead government organisation for inward
investment and UK export related issues. I am very pleased and proud to
say that I was then, as I am today, the bearer of good news.
Between 1 April 2004 and 31 March 2005, over 1000
foreign companies chose to invest in the UK, creating nearly 40,000 new
jobs.
That’s 31% more investors than the previous year.
55% more new jobs created than in the previous year.
It’s a great result for the UK and I’m sure
everyone here today will appreciate its significance.
And it matters because foreign investment is
important for the long-term health of the UK economy.
International investors are some of our biggest
and most innovative manufacturers and service companies.
They bring not only jobs and wealth creation, but
often new skills and technology, and they can help revitalise local
economies, and contribute to regeneration at a regional level.
We live and work in an increasingly global economy
and it’s simply not viable for established economies like the UK to
compete on the basis of low labour costs.
As Professor Michael Porter has said – and I think
it is now widely accepted – the challenge for Britain is to compete on
unique value and innovation.
That’s why we need to focus on high-skill products
and services. To build on our reputation for creativity, innovation and
technical excellence. And to ensure we make the fullest possible use of
our considerable R&D expertise.
With this in mind, it’s particularly pleasing to
note that many of the new inward investment projects in the UK are
knowledge-driven and from the Asia Pacific region. For example:
Telekom Malaysia Berhad recently opened their
Headquarters office in the London area, creating a number of key jobs in
the telecoms service sector;
Emerio Corporation PTE. Ltd (Singapore) has opened
a regional Headquarters in Nottinghamshire, dealing with software
consultancy, creating over 200 local jobs.
Last year the Asia Pacific region performed
strongly, with the total of number of projects rising 43%. And the types
of new project reflect the changing shape of the UK economy as a whole.
Many are in rising sectors such as creative
industries, pharmaceuticals and biotechnology, where technological
innovations are creating new waves of opportunity for entrepreneurs.
But the truth is that new technologies are
transforming every product and every service - every part of the
production process, and every sector of the economy. This includes
manufacturing.
As we move forward towards a knowledge driven
economy, manufacturing doesn’t disappear – instead, it changes, as the
focus shifts to the higher value end of the spectrum. That means more
sophisticated products, more efficient processes and higher skills. In
fact nearly a third of the total jobs last year from inward investment
came from manufacturing projects.
The UK is undoubtedly one of the best places in
the world to do business. And this is not just our opinion. In February
this year, EU Commission President Manuel Barroso urged the EU to become
more like Britain and that it should copy the UK’s Business-friendly
policies.
And it has not just happened by chance.
It’s because of the long-standing British
commitment to intellectual freedom. Our scientific creativity. Our
openness to new ideas, and our outward looking internationalism -
qualities that made us the first industrial nation, with - even today - a
global reach that is the envy of many.
And of course we shouldn’t forget a strong, stable
economy. A highly-skilled, flexible workforce. Or the lead we’ve taken in
deregulating and opening up markets to competition at home and from
overseas. It is that competition that keeps our markets and our economy
strong.
Government is promoting these strengths. The work
of the UK Trade and Investment team in London, their partners in the UK
Regions, and in Embassies and Consulates around the world – who promote
the UK as a place to do business, attract inward investment and contribute
to innovation and prosperity in the UK.
Among the Thai companies already experiencing the
benefits of investing in the UK are Bangkok’s Landmark Hotel Group, which
owns several hotels in London, the TCC Group, which owns Inver House
distillery and Siam Winery Trading, which owns Red Bull energy drinks.
It’s important that we maximise opportunities to
work together. The UK’s openness to investment will continue to be key to
its prosperity and I want to take this opportunity to extend the UK’s
welcome to prospective investors here today.
Of course investment is not the only side to the
competitiveness agenda. The other important part of our economic
relationship with Thailand is trade.
Thailand and the UK are increasingly important
trading partners for each other. The UK is Thailand’s largest export
market in Europe; and the UK is the second largest EU supplier of imports
into Thailand. UK exports to Thailand grew by over 11% last year, on top
of 7% growth in the previous year.
I should add that the balance of trade is still
firmly in favour of Thailand by a factor of 3 to 1. So I am keen to see
British companies re-double their efforts to do business in Thailand.
Britain trades effectively on its reputation for
quality and lifetime value of its goods and services and it is interesting
to look at the areas where British companies are succeeding. Our top five
exports to Thailand are: electrical machinery; specialised industrial
machinery; medicinal and pharmaceutical products; beverages, and transport
equipment
This illustrates the diversity of the sectors in
which we are successfully doing business with Thailand. But actually the
opportunities are endless. The Commercial Team at the British Embassy in
Bangkok have a Business Plan which concentrates on 10 Sectors, ranging
from Agriculture to Engineering, from Education and Training to Software
and Computer Services.
Only yesterday I witnessed a contract signing
ceremony between a British company, Power Technology Ltd, and the
Electricity Generating Authority of Thailand. Through our experience of
privatisation of the electricity industry in the 1980s we are in a good
position to help Thailand to develop its own successful strategies and
management techniques as ownership is partially transferred to the private
sector.
The power sector in general is a priority for many
countries around the world. We have all been hit by the dramatic rise in
the price of oil. The Government of Thailand has rightly been working on
strategies to develop alternative sources of energy. There are many
British companies, which are at the cutting edge of new developments to
produce renewable energy from many sources, such as processed waste,
biomass and biogas. Earlier this year I was delighted to hear that British
and Thai partners had signed a joint venture to introduce new gasification
technology in Thailand to produce energy from waste. This innovative
project is a success story both in terms of exports and investment: the
Thai partner is investing in demonstration plants here and in the UK for
technology developed by a British University which will provide a platform
for its sale in Thailand and China.
This kind of project illustrates very effectively
the strong links between investment and trade. It shows that successful
collaboration between nations which are committed to a strong agenda of
enhancing competitiveness through investment and innovation can create
benefits all round.
Tesco Lotus, the very generous sponsors of this
lunch, are a huge success. The total investment by Tesco UK in Tesco Lotus
operations in Thailand is expected to be around 942 million Pounds by the
end of 2005.
But, of course they are not the only success story
for British investment in Thailand. There are many household names from
the UK which have invested and are doing good business here: Standard
Chartered, Boots, British Gas, GlaxoSmithKline, Shell, Unilever, Grampian
Foods, Cadbury Schweppes, to name but a few.
Their success here is a two way street: they
provide jobs and export opportunities for Thailand. At the same time they
provide a good return on investment and a competitive edge for the parent
company in the UK.
And we in the UK are in a strong position with a
framework that supports decent business and decent standards for
consumers. Only last month the World Bank placed the UK top in the world
amongst major economies in terms of regulatory quality. I hope that this
will increasingly lead to investment flows in the other direction too.
The facts speak for themselves. The UK is the
number one location choice for companies wanting to get into the European
market.
Last year we saw around 300 inward investors
expand their operations in the UK – more than ever before – which shows
that investors not only chose the UK but stay, grow and prosper. And UK
exports to Thailand and to markets like China and India are growing as
well.
So where do we go from here?
We’re proud of our achievements. But we’re not
complacent, and want to build on them further.
The UK needs to maintain its competitive position
by identifying and building on what we do best. This means a continuing
focus on our science base. On our research, design and development
capabilities. And on skills, knowledge and innovation.
As a Government we can do some of the work. But it
is businesses that create wealth. We want to encourage more Thai
businesses to come and invest in the UK and we want more UK companies to
do business here. Trade and Investment are vital for future growth and
prosperity of both our countries and I look forward to seeing that trading
relationship go from strength to strength over the coming years.
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