BritishAdvantages

The UK Offers Access to EU but is Free of Stifling Regulation  

There is a strong relationship between the United Kingdom and New England, built on the wealth of our many historic, academic and cultural connections. But this relationship is also firmly based in the present, and a shared commitment to innovation and technological advance.

The UK is focused on encouraging innovation by organizing and funding its science base. The British government recently rolled out a 10-year science and innovation investment framework to increase the level of ‘R&D to GDP’ from 1.9 percent to 2.5 percent by 2014, resulting in an increase in U.K.-based R&D by around $29 billion. The government’s vision is to support skilled scientists, engineers, technologists and entrepreneurs who in turn will deliver benefits to businesses, health and the public services. The U.K. is focused on commercial use of its academic output and has extended tax breaks to businesses conducting R&D activities — support that is now worth more than $890 million a year.

Our government agency, U.K. Trade & Investment, understands that corporate success in the 21st century is dependent upon growth through knowledge and technology, underpinned by R&D. So we have committed to bring down the barriers to success in order to speed up market entry and growth. And we can achieve this through corporate partnership.

In an increasingly changing world, businesses that fail to exploit opportunities overseas are at a competitive disadvantage. Evidence on both sides of the Atlantic shows that firms that internationalize have higher rates of productivity, better overall performance and less chance of failure. The old divisions between traditional exporting and direct overseas investment are breaking down. New forms of partnering are emerging that will enable companies to develop overseas markets more effectively than ever before. The U.K. is at the center of today’s global marketplace. Foreign investors employ two million people in Britain and we receive around 40 percent of all U.S. investment into the E.U. The U.K. remains the top destination for Foreign Direct Investment and is the leading gateway to the European market.

The U.K. is one of the most agile and competitive economies in the world. Economists predict that our record eight years of growth should continue well into the next decade.We have generated a dynamic business culture. The U.K. government works closely with foreign investor partners.We identify their corporate requirements for success and respond accordingly to provide the flexibility that they need to maintain growth in the U.K. and in Europe. It’s a partnership that’s working incredibly well. Last year, more than 30 percent of all foreign investment in the U.K. came from the expansion of existing investors.We’re a springboard to growth.The U.K. offers foreign investors access into the European market of more than 450 million consumers. Yet we’re free from many of the regulations that have stifled corporate growth within the E.U. Our flexibility is key to corporate success. Partnering with investors delivers the essential voice in government and flexibility that is key for growth.

If now’s the time for your business to exploit trans- Atlantic opportunities, please contact a U.K. Trade & Investment professional.We offer a free and confidential service, aimed at giving you all you need to know to set up or expand your company’s operation in the U.K. As you will see, our U.K. Trade & Investment officers have business and sector expertise that can help you and your business succeed internationally.

Cynthia Bouthot is the British consul for trade and investment. She can be reached at
617-245-4507 or cynthia.bouthot@fco.gov.uk

UK Hard to Top in Many Sectors

HEALTH CARE

The U.K. health care industry has its base in a wide range of scientific disciplines and industrial sectors including engineering, informatics and biotechnology.With a strong academic and industrial culture, the U.K. forms the ideal base for converging technologies to develop innovative products for marketing across Europe and beyond.

A CULTURE OF EXCELLENCE AND EXPERTISE

Research and development facilities are concentrated in clusters or knowledge-based geographic areas centered on universities such as Oxford, Cambridge and Imperial College London, as well as regional universities. They make excellent support facilities offering expertise and consultancy, and provide a skilled pool of professionals for recruitment. In addition, there are more than 40 science parks located throughout the U.K.

OPPORTUNITIES FOR GROWTH

The National Health Service is not only the largest customer for healthcare in the U.K., it is also one of the biggest consumers of health care products and solutions globally. It generates a huge demand for goods and services and has an annual budget that will rise to more than $158 billion by 2008. It’s estimated that approximately $30 billion is spent annually on goods and services.

Both the public and private sectors are also experiencing increasing demand for health care products and services. The role of the private sector is developing in the U.K. and has particular expertise in residential and nursing care. Care services are valued in total to be more than $26 billion and have grown rapidly over the last decade at about 9 percent per year.

LIGHT REGULATION

The health care sector in the U.K. is one of the world’s most liberalized markets. It maintains a minimal regulation policy while ensuring that public safety is preserved.

More recently, health care industry regulations have been negotiated at European Union level and Mutual Recognition Agreements are in place with many thirdparty countries. These allow bodies based in third-party countries to perform assessment against E.U. requirements and vice versa.

Anne Avidon Trade & Investment Officer anne.avidon@fco.gov.uk Tel: 617-245-4572

SOFTWARE

The U.K. software and computer services sector continues to be at the forefront of development and growth. For the first time ever, all four segments — packaged software, support services, project services and outsourcing — have registered growth.

The U.K. accounts for more than 21 percent of the European software market and 6.9 percent of the global computer services industry. Project services consist of a vast number of small companies, with low barriers to entry, while the outsourcing market currently outperforms all other segments — as domestic suppliers acquire or partner with offshore suppliers.

A BROAD AND DIVERSE SECTOR

The U.K. has some of the world’s leading players such as BT, Eidos, iSoft, LogicaCMG,Microsoft,Misys, Oracle, Sage Group and Xansa, as well as being home to more than 100,000 smaller software companies. Major venture capital firms that have invested in the sector include 3i, Barclays Ventures, Carbon Trust, JPMorgan Partners and London Ventures (Fund Managers) Ltd.

A CULTURE OF RESEARCH INNOVATION

The sector remains committed to cutting-edge R&D, supported by government and strong links between business and academia — demonstrated by its success in earning commercial returns on R&D investment.Many U.K. universities are involved in software and computer services research, including the Universities of Cambridge, Edinburgh, Southampton and York, and in London, King’s College, Imperial College, and Queen Mary, University of London.

Highly specialized and skilled U.K. companies offer consultancy and development services.Many of these companies, such as the IBM Research Centre in Hursley and Programming Research Ltd., are among the most advanced in their field globally.

Kirsten Chambers Trade & Investment Officer Kirsten.chambers@fco.gov.uk Tel: 617-245-4509

PHARMA/BIO

The bioscience industry is a British success story. From the discovery of the double helix structure of DNA 50 years ago in Cambridge, Britain has been at the forefront of bioscience — and its pharmaceutical and biotechnology industries are major global players.

As the worldwide market continues to grow, the U.K. offers a dynamic yet stable investment environment for biotechnology and pharmaceutical companies both large and small, as well as for those providing specialist services to them. The U.K. offers world-class research and development
(R&D) and an abundance of skilled staff, combined with a sound approach to regulation and strong government support.

This success is founded on the U.K.’s strong science base. The U.K. is home to a number of world-renowned research institutions such as the Sanger Centre, a leading player in mapping the human genome, and the level of government funding for health research and development is second only to the U.S.

With the National Health Service, the U.K. is also home to one of the world’s largest purchasers of medicines and a world-leading platform for conducting clinical trials.

The U.K. has a strong track record in pharmaceutical and biotechnology manufacturing, with bulk pharmaceuticals and finished medicines production being carried out across the U.K. This huge manufacturing base has helped the U.K. industry to its position as the world’s biggest exporter of pharmaceuticals.Major manufacturers include AstraZeneca,Merck Sharp & Dohme, Abbott, GlaxoSmithKline, Pfizer, Eli Lilly and Aventis. The U.K.’s strong contract manufacturing sector includes leading international players such as Patheon, Rhodia Chirex, ACS Dobfar and Lonza Biologics.

David Tharp Trade & Investment Officer David.tharp@fco.gov.uk Tel: 617-245-4504

FINANCIAL SERVICES

More than one million people are employed in the U.K.’s financial services industry, which is crucial to the local economy of London and key areas around the U.K. Ambitious and well-supported clusters in Scotland and throughout England are playing important roles in national and European financial services markets, ensuring that the sector continues to extend its reach and lead on a worldwide scale.

An economic powerhouse contributing more than 5 percent to the overall GDP and $30 billion a year to the U.K.’s balance of payments, the industry is actively working with the government to sustain this success. Adding to a strong and agile financial regulatory framework, the government is harnessing growth in global capital flows through a deliberate open-door policy to foreign ownership and deregulation of the U.K.’s markets.

ACHIEVING ADVANTAGE

The U.K. is proud of the quality of its innovative products and services. It is also aware of the substantial value added by its highly regarded professional services. Providing a valuable source of comparative advantage, these management consultancy, legal, actuarial and accountancy services have helped the U.K. establish its position as Europe’s gateway to the global financial market.

LONDON: LEADING THE WORLD

London is Europe’s financial capital and the world’s leading international finance center, in both size and scope. Universally acclaimed for its innovative, competitive and internationally focused markets, this flagship financial cluster is home to the country’s principal financial institutions, financial and commodities exchanges as well as more than 260 foreign banks and 200 foreign legal services companies.

FACTS AND FIGURES

• Twenty percent of international bank lending and 23 percent of international bank borrowing is arranged in the U.K. — the world’s largest single market.
• More than 75 percent of European-based hedge fund assets — a total of $219 billion — is managed in London.
• London is the world’s leading market for international insurance with the U.K.’s worldwide premium income standing at $273 billion.
• The U.K. has a 43 percent share of the global over-the-counter derivatives market.
• London is Europe’s largest international banking center, with an estimated 41 percent of all the E.U.’s financial services.

David Bell Trade & Investment Officer dbell@fco.gov.uk Tel: 617-245-4583