Meeting the challenges ahead

Nick McInnes, Director Trade and Investment USA, New York looks at the increasing strengths of the UK/US relationship

I am writing this foreword shortly after taking over as the Director Trade and Investment USA and British Deputy Consul- General, New York. I have returned to New York to take up this posting at an exciting time – at the beginning of Barack Obama’s Presidency – but also at an extremely challenging time, given the global recession.

Trade and investment – and, in particular, the UK’s strong transatlantic economic ties with the US – have never been more important than they are today in the current turbulent economic climate. Two-way trade in 2008 inceased by nearly 9% to £63.3bn ($89.3bn). UK exports to the US increased by 8% to £34.7bn ($48.9bn) whilst US exports to the UK grew even faster by 10% to £28.7bn ($40.5bn).

The UK remains the largest foreign investor in the US. UK investment in the US was worth some $411bn at the end of 2007. British investment supports nearly one million US jobs spread across every State and every sector of the economy. The US is equally the largest foreign investor in the UK, with American companies employing more than a million people. This investment – worth $399bn at the end of 2007 – far exceeds that from any other country.

UK Trade & Investment – the UK government organization that supports British companies doing business in overseas markets and foreign companies looking to invest in the UK – is committed to strengthening the bilateral commercial relationship through its extensive network of offices in the US and its teams in the UK. We provide a range of tailored services for UK firms looking to enter or develop their presence in the US market and expert support and advice to potential US investors in the UK at all stages of their business decision-making. Demand for our services remains at all-time high levels as exporting becomes increasingly important to a growing number of UK companies – with many seeing opportunities in the US – and the UK remaining a springboard for growth for many US companies in the current difficult economic environment as well as in good times.

The UK – like all advanced economies – has clearly been hit by the current recession and perhaps more than most because of the size of our financial services sector. However, the UK will weather the storm and its basic economic fundamentals and resilience will ensure that we are well-positioned to benefit when the recession turns the corner and global growth and demand pick up again.

The UK has some of the world’s most flexible and competitive labor and product markets and is as open as any economy in Europe to trade and foreign investment. Britain has consistently been ranked as one of the best places in the world to start and build businesses. The UK remains the sixth largest manufacturing nation with our strengths very much in sectors – precision manufacturing, pharmaceuticals and aerospace – at the high-value end of manufacturing. The UK also remains a powerhouse for creative industries – often exporting more cultural goods in recent years than any other country in the world. The City of London – notwithstanding the current turbulence – will remain a global hub for financial services.

The UK government is committed to supporting innovation and knowledge-based industries. Unprecedented sums are being targeted for investment in the UK’s science and research base. The government has adopted a 10-year science and innovation program to make research more relevant for, and accessible to, businesses. It has identified specific resources to help companies build relevant R&D excellence and to collaborate with UK companies and research organizations. And its tax credit scheme – which now provides business with an extra £600m ($846m) to spend on R&D – is one of the world’s most attractive, with allowances of up to 150% of qualifying spend.

The consequence of this is that the UK has become one of the most attractive locations in the world to undertake business research and development. Many US companies are already growing their networks of UK partners to help them deliver innovative products and services. I have already seen the effectiveness of BritishAmerican Business in action and look forward to working with them – a key stakeholder for UK Trade & Investment – to strengthen further the bilateral trade and investment relationship.

For more information, contact the
UKTI team to find out how we can
help your business grow:
See page 30 for contact details of
UKTI’s US offices
Tel: +44 (0)20 7215 8000
Visit: www.uktradeinvest.gov.uk

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