START-UP companies are being urged to embrace the lucrative opportunities that are available in China, despite concerns about the outlook for the world’s second-largest economy.
Stewart Langdon, the newly appointed chairman of the Asia Scotland Institute’s business advisory council, said the country offered “eye-popping” prospects for fledgling firms such as software outfit Administrate, which is targeting China after building a strong presence in North America.
Langdon, an Edinburgh-based partner at social investment fund LeapFrog, told Scotland on Sunday: “There’s a bit of negative press around China at the moment in terms of slowing down economically and it can be seen as a difficult place to do business. But in truth China will grow at somewhere between 6.5 and 7.5 per cent this year.
“You’re talking about a $9 trillion (£5.4 trillion) economy that has doubled in size in the last five years.”
The not-for-profit institute has invited Mark Tucker, the chief executive of Asia-focused insurance giant AIA, to talk about China’s position in the global market at the Edinburgh Centre for Carbon Innovation on Tuesday.
Buoyant exports and declining imports pushed the country’s trade surplus to record levels last month, signalling that domestic activity may be weakening, but annual economic growth in the three months to June edged up slightly to 7.5 per cent.
Langdon said: “The opportunity that China presents is eye-popping. Given the quality of products and services that Scottish companies produce, it’s a market we should be very excited about and be approaching with confidence.”
Administrate, based at the Edinburgh technology incubator CodeBase, develops software to help clients such as PwC and the University of York run online training programmes. The firm generates about 25 per cent of its revenues in North America, and while chief executive John Peebles said the firm has so far focused on English-speaking regions, he is now looking to broaden its horizons.
Peebles, who was born in the US, said: “I grew up in China and one of the things that’s really interesting about many Asian countries is they don’t have enough higher education, so they’ve developed a very strong vocational training sector. We feel there’s a huge opportunity in Asia for a product like ours.”
One of the darlings of Scotland’s tech scene, Skyscanner, opened its first office in Edinburgh in 2004 and eight years later expanded into Beijing. The flight search engine has other bases in Glasgow, Barcelona, Miami and Singapore.
Skyscanner co-founder and chief executive Gareth Williams took part in an event in the capital last week, organised by CodeBase and start-up “accelerator” Seedcamp, which saw young companies pitch for the chance to secure a place at Google’s Campus in London.
CodeBase managing director Jamie Coleman said: “There were over 200 applicants from all over Europe and they eventually got whittled down to ten. I was really pleased that we had one Swedish start-up and a Dutch one coming over.
“All of these companies are global and need to be in order to survive. That’s the beauty of software, as it means we can deploy this technology via the internet pipes we have coming out of Edinburgh.”