Business Weekly

Thrilled by the strength of the region, EEI chief executive, David Riches

 But with a neat sense of timing he has inadvertently become its biggest cheerleader through his trade visits to China and India – the world’s fastest growing economies and two giant figures on East of England International’s radar screen.

EEI is the international business support organisation for the region, funded by EEDA and UKTI. 

It works with regional companies seeking to grow their businesses by exporting services or products and assists overseas-owned companies setting up in the region or already here. As such, it is that rarest of beasts in the UK and Europe – a genuine one stop resource for two-way trade.

EEI has worked hard in recent years to foster close trade relationships with both India and China, which have each pledged to build global economic growth from a knowledge platform and embraced the East of England as an exemplar.

The region’s progress to date in winning new inward investment from these and other global territories has never been less than steady and has occasionally been spectacular. But a new phase has now been entered in the region’s growth strategy and one can reasonably expect the stride to lengthen and the pace to quicken as various forces converge to enhance the attractiveness of the East of England to overseas investors and companies.

Certainly East of England International’s new chief executive, David Riches, will not be found guilty of underplaying a hand crammed with aces and face cards. One of those aces was dealt by the Prime Minister as he opened the door to billions of pounds of investment from China by encouraging its state investment arm to take stakes in British companies.

As China’s sovereign wealth fund – with a capitalisation of £100 billion – comes to London and starts scouting the UK for investment opportunities in the areas of hi-tech and R & D it doesn’t take a Confucius to work out that Cambridge and the East of England should benefit hugely from the impending windfall.

For David Riches, a resident in the region and a Cranfield MBA, leveraging the East of England’s many assets to secure more inward investment while helping local companies boost exports is “a wonderful challenge” and one he intends to optimise.

His philosophy is to build bridges rather than burn them, preferring to turn even perceived competing regions into potential trade partners wherever possible. A competitor today can be an ally tomorrow depending on the circumstances.

Riches is encouraged by the fact that the majority of investments into the UK are knowledge-driven, pivoting on a fulcrum of R & D, innovation and creativity, and by access to key growth facilitators – access to the right capital, access to the right skills and principally world-class academic institutions.

“This has probably been the case for the last five, perhaps even the last 10 years, but this has become stronger, especially for many of the emerging markets such as China, India, Brazil and parts of Europe.

“I truly believe the East of England has all the ingredients for success in a highly competitive international marketplace and a far stronger proposition than any other region in the UK. We are punching our weight and fit nicely into the flow of world trade.”

Figures for trade between India and this region and India and the UK support his argument about knowledge-driven economies. India is one of the top five global  investors into this region and Britain as a whole.

Information & Communications Technology investments into the East of England have grown and on his short-term agenda, Riches would like to see EEI capture more successes from India’s burgeoning ICT segment.

Over the longer term, there is an opportunity for this region to attract more investment from major Indian companies seeking to nudge themselves higher up the value chain.

These opportunities are likely to emerge in a range of sectors such as automotive, ICT, Pharma and broader Life Sciences as well as in the areas of innovation and creativity.

This is a scenario in which EEI’s holistic approach to international trade really can pay off.

Riches says: “One of the greatest attractions of this region is that we really can claim to be a one stop shop for international trade and investment advice, attracting inward investment but also securing export success for local companies in new markets.

“This two-way, give and take approach holds considerable benefits when building a relationship with countries such as China and India.”

Acutely aware of the need to nurture emerging markets without sacrificing that ‘special relationship’ with our strongest trade partner – the US – Riches also believes that Europe could prove even more fertile territory than in recent years.

“The level of inquiries we are seeing from Europe is tremendously encouraging and Europe is a very important trading bloc for our region. France and Germany both figure in the top five inward investors and we will be pressing strongly to build on these possibilities.

“The growth of services across Europe to and from Stansted and the opening of the new St Pancras rail hub have given this region unprecedented access to potential investors from continental Europe.

“There is already evidence that a lot of French firms will use access through St Pancras as a rationale to look east from London towards this region to set up operations.

“German companies, too – especially in sectors such as automotive and environmental services – promise to be another source of potential investment.”

Regardless of the markets EEI targets, Riches is looking to exploit a strong regional brand rather than simply play the Cambridge card.

To this end, he believes the growth of Stansted, foreign investment in  sea ports from Norfolk & Suffolk to Essex, the growing environment sector just up the A1/M in Peterborough, Ipswich’s strength in ICT stemming from the Adastral Park nexus, Norwich’s financial services and food research strengths plus a whole host of other factors make the brand extremely powerful and potentially irresistible.

“It is a branding message we must get right,” says Riches. “The world of inward investment has changed. You are selling an integrated investment proposition to overseas companies and organisations and the people you are selling to are buying access to your markets, your finance, your skilled people and all the other factors that render your clusters essential for those looking to establish a presence outside of their home territory.

“Looking at all of these, we perform very strongly. We have to ensure that this message is reinforced.”

Riches believes infrastructure improvements can be vital tools to aid a region’s growth but that infrastructure should never be used as an excuse for lack of progress. “Statistically, 30 per cent of investment into greater London goes into the Heathrow Airport area and Stansted can have the same effect for this region.

“Despite historical complaints, I don’t believe this region’s infrastructure is a handicap to growth. The A11, A12, M11 and A1/M have been clearly identified as growth corridors and we have spoken about the advantages the new St Pancras could give us with fast rail links from this region and the tremendous impact Stansted, Luton and Norwich airports can have on our growth strategy.

“We can get too hung up about distance. To companies from many territories overseas, travelling 50 miles between Cambridge and London – considerably less if they are based in Essex or Hertfordshire – or 30 miles down the A14 to set up in one of the market towns is no great obstacle when back home your nearest district office to headquarters is hundreds or maybe thousands of miles away.”

Educating companies about other markets is a central plank of EEI’s strategy, whether that be foreign companies looking inwards or local businesses scanning foreign horizons.

On the trade side, Riches makes a powerful case for the East of England to maximise the international potential of thrusting young companies with exciting technology – Silicon Valley calls them ‘Born Globals.’

He says: “There are almost certainly many more ‘Born Globals’ in the East of England than many people realise. Silicon Valley has excelled in scaling up companies that may only be in their second funding round with 50 or 60 people and seeing them hit the heights like Google.

“If you have strong technology and a good proposition in one marketplace, the chances are it will also scale in others. We can help local companies move fast to identify other prime markets for their product, prepare highly targeted market intelligence reports and set up meetings with key contacts, networks and potential distributors – and we can do it incredibly quickly and cost effectively. We will help our companies navigate the markets that once seemed so remote to them.

“The key is in the initial research and the focus. It is one of my major ambitions with EEI to help more of our exciting young technology companies become Born Globals and grow much faster but on a sustainable basis.”

Riches would also like to see more mature companies in the region make a stronger case for growth within the East of England if they have been acquired by a foreign business. There was widespread concern when US companies such as WorldCom and Millennium Pharmaceuticals moved into Cambridge in recent years with rich promises and ended up slashing headcount and axeing their local operations.

Riches says: “In a commercial world, one accepts that some foreign parents will take a numbers decision. But I see this whole situation as another opportunity for this region. What this region has to offer overseas companies is fantastic when you put together our brainpower, our access to growth capital, all our wonderful resources and so on.

“I’d like to see more executives locally make that case when their business is acquired. Rather than acquire the technology, go back home with it and start trimming headcount or closing facilities based on a decision made 3,000 miles away, just think of the fabulous long-term payback you will be missing out on.

“There is much more to be gained from staying within this region and taking advantage of its excellent science & technology, its people skills and world-class clusters in wireless technologies, biotech, stem cell sciences, renewable energy, nanotechnology, photonics, plastronics, inkjet technology, digital convergence and so on. We have seven world-leading universities in the region and that gives investors unrivalled access to the best Intellectual Property.”

EEI’s new chief executive sees a terrific opportunity for the East of England in the digital convergence space as cutting edge technology interfaces with innovative new media and creativity. This is an instance in which the complementary strengths of this region and London would provide a powerful joint branding message, Riches believes.

“Silicon Valley has fabulous technology and access to lots of Venture Capital but the top media and creative companies are down in Los Angeles. The East of England has so many world-class technology clusters and there are prime media and creative partners just 50 miles down the M11 in London. Take our strengths and London’s strengths here and you have a powerful proposition.”

The London-East of England axis should also bear fruit via the London Olympics, which is forecast to trigger a construction boom unprecedented along the region’s major road corridors into London.

The building of the Olympic site is scheduled to start taking shape by the end of this year and Riches sees the Games as “a huge opportunity for the region” – but only if the event leaves a lasting legacy.

Again, he sees opportunities for the region’s wireless and display technology companies in what is being tipped to become the first digital Games.

International conglomerates paying anything from £50m to £100m to sponsor the Games aren’t likely to have their spend or brand diluted by the BBC’s ‘no advertising’ shackles, for example. Digital displays will become essential – and Cambridge, especially, has world leaders in the field –  just as Cambridge wireless technology could help solve a massive potential bandwidth headache for the world’s media covering the Games.

And, as for other elements of the legacy, Riches says: “It is important that we build facilities that have a lasting benefit long after the Games have gone – like the equestrian reception and training centre being planned in Newmarket for Olympic teams.

“Afterwards it can still be used for equestrian sports and the presence of a world-leading equine hospital on-site is also likely to prove an attraction internationally.
“The London Olympics also represents a lifetime chance to promote the region around the world. EEI wants to work with companies who come into the UK for the Olympics and persuade them to stay here.

“This goes far beyond an infrastructure opportunity: It has been cited that only 10 per cent of London’s growth up to 2016 will have been directly attributable to the Games. There are other attractions, like the financial markets. We have to add this region’s strengths to the weight of that argument and persuade companies here for the Olympics that they can share in the region’s long term growth success.”

Academia could play an important role here, as well. Riches sees our universities as vital in promoting the brand of the East of England as the ‘Ideas Region.’

He says: “Cranfield, Essex, Herts, Cambridge and many more institutions locally have such strengths and we can sell their strengths around the world. There are companies which would love to establish facilities physically on university sites, bringing the commercial world onto our campuses.

“We also want to tap into the alumni from these universities. They are producing bright people and many of them are going home to various parts of the globe and starting world-class companies in places like China, Brazil and so on.

“We need to persuade more of these alumni to bring their new companies to the East of England where they have already enjoyed their time and benefited from our knowledge base and networks.”

Much has been made in various surveys in the last few years of how the East of England suffers by comparison with Silicon Valley as a commercial centre on grounds of sheer scale and also in the numbers of ‘Big Gorillas’ it can get into the marketplace from its start-up community.

Riches believes that direct comparison is probably unfair. “We work in many partnerships with Silicon Valley but we also have strengths that Silicon Valley doesn’t have, which may illustrate why so many Californian delegations have beaten a path to this region in the last year to engage with our universities and technology clusters.

“A lot of Silicon Valley companies are finding tremendous difficulty in getting staff who operate in their specific cluster. They can get their Venture Capital at home and become global very quickly – but now they realise that they can use the UK to develop their products here through collaboration. Increasingly that could be in collaboration not just with UK brainpower but also with the partners we make from india, China and Europe in our increasingly international clusters as they evolve.
“What hit me most coming into this job was just how strong the East of England is: We are first for this technology, first for that invention and the list of firsts goes on and on. It excites me to be have the opportunity to promote that in an even stronger manner overseas.”
 

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