NRI/PIO businesses in European Countries: Achievements and Constraints
First of all, thank you for having me here today and for giving me the chance to speak on such an important subject.
As our world gets ever smaller, when entrepreneurs can set up businesses wherever they like in the world; when Indians, Brits and many other nationalities can take their skills to all corners of the globe, I think it is worth asking ‘why Britain, or why Europe?’ Equally important is assessing, what successes Indians in Europe have had and what barriers do they now face that is preventing further success?
These are very big questions, and I only have a few minutes, so as a Government Minister and spokesman for the Department of Business, Innovation and Skills I hope you don’t mind me focusing my remarks on the UK.
The Indian community in Britain have achieved unparalleled success. To put it in perspective, South Asians make up just over 3% of the British population, but contribute around 6% of the UK’s GDP; 50,000 businesses generating 60 billion pounds every year.
Internationally recognised names like Lakshmi Mittal are joined by international brands like Tata; our national rich list is topped by the Hinduja’s and families like the Agarwal’s and many others who have excelled in Britain.
So why have so many people of Indian origin flourished in this country?
Well I think the answer lies in this country’s values; values that entrepreneurial Indians desire:
• A strong legal system that upholds the rule of law;
• A culture that prioritises education, small businesses and trade;
• A Government that supports trade and entrepreneurs, but also supports those that are in need; and
• An outward-looking nation that is open for business, including inward-investment and selling our goods and services abroad.
Since this Government came to power in 2010, Britain and Europe have gone in opposite directions. The Eurozone has staggered from one crisis to another and growth is almost non-existent; even the German economy is showing worrying signs of slowing-down.
Here in Britain we’ve had some remarkable success; record numbers of people in employment, unemployment rates at an unprecedented low, inflation was this week revealed to be at 1.2% and with predicted growth this year of 3.2%, we are the fastest growing major developed economy in the world.
However, to come to the second part of today’s topic, there are still a number of constraints that are preventing further economic success, for Britain as a whole but also for British Indians. I’d like to touch on 5 that I think are particularly significant:
1. The first constraint that is holding us back is exports, particularly the exporting levels of small businesses. In 2012 –when I was still a backbencher in the Lords- I established a cross-party committee to look into what more the Government can do to get SMEs to export. The Committee took evidence from a number of businesses and groups, and produced a list of recommendations, most of which the Government have acted on.
But one significant thing that we can’t change is the number of SMEs that never consider or think about exporting their goods and services. There are thousands of SMEs owned by British Indians across the country who don’t realise that, with their heritage, culture and language skills, they are in a prime position to export. Culturally, we have to change the perceptions and risk aversion of our SMEs and get them trading across the globe. If they did so, studies show they’d likely receive huge increases in demand and growth.
2. The second constraint is one I’ve already touched on, which is the Eurozone economy. Without a serious change in circumstances, we may be heading into a very serious period of economic inactivity across the continent. This will not only have an effect on the Indian businesses already operating here that trade with Europe, it may well encourage the next generation of entrepreneurs in India to look elsewhere. This would be a huge loss for Britain and Europe.
3. The third constraint we have is the lack of access to lending and bank finance. My Department have made this a priority since 2010, but I still hear of so many businesses who want to expand or entrepreneurs who want to create something new, but who simply can’t get the backing of the banks. Over 80% of business lending still comes from the big four banks; we desperately need the new challenger banks like Aldermore, Metro bank and Cambridge and Counties to succeed, and for other sources of finance like peer to peer lending to grow.
4. The fourth constrain is our planning system. I’ve despaired for years at how expensive and difficult the planning system in this country is, and I hear from businesses that it still isn’t improving. If we want businesses to base themselves here and to grow, we have to ensure we have the ecosystem to support them. Our tax system is now competitive, our infrastructure is improving, but I do worry that our planning system is not at the same level.
5. The fifth and final constrain I wish to mention is a double-edged sword; immigration and visas. Both of these are perception problems. In India, I hear time and again that British visas are difficult to obtain. But if you want to study here or set up a business here, and you have all of the necessary documentation, I don’t think it has ever been easier to get a British visa. It is simply wrong to say otherwise.
The other edge to this sword is that people think that Britain is becoming anti-immigrant. I simply don’t think that is the case. I think the problem is something quite different, which is that the British like fairness. They feel that too many people have moved to this country and got an easy ride. If you want to come here, work hard, create jobs, integrate with your local community and pay your taxes, then you’ll be welcomed.
I’ve lived in this great country for over forty years and I wouldn’t live anywhere else, because I know that you don’t get a free pass. It isn’t written anywhere, but there’s a simple rule to succeeding in Britain. You have to put effort in to be able to take something out; it is, I believe, a very fair and honourable way of living.
So those are my thoughts on the achievements and constraints of Indians in Britain. I haven’t touched on everything, but I’ll be happy to take questions at the end.