Nick Freer: Internationalisation pivotal to growth

At an annual corporate awards ceremony in Glasgow last week, some of Scotland's most successful exporters were celebrated at a standard black-tie night in a hotel ballroom among the great and the good of the business scene.

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Nick Freer says internationalisation translates to economic growth. Picture: Stewart AttwoodNick Freer says internationalisation translates to economic growth. Picture: Stewart Attwood
Nick Freer says internationalisation translates to economic growth. Picture: Stewart Attwood

More exciting than the format was the chance to hear about some of our hidden business champions, including a small Moray craft brewery that exports over 80 per cent of its beer, although the overall conclusion was that we could be doing even better as an export nation.

Scottish Enterprise chief Bob Keiller had some illuminating words and figures. While only 3 per cent of Scottish companies are exporting, this is a red herring when the vast majority are self-employed.

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A more telling figure is that as many as 3,000 Scottish companies that aren’t exporting could be. Keiller came in for a bit of criticism from a fellow columnist in The Scotsman a while back but I can’t think of a much better person for the top job at Scottish Enterprise.

Not only is Bob a nice guy, more importantly he also led a FTSE 100 multinational, Wood Group, as CEO and I think we can be pleased to have that kind of experience and skill‑set at the helm of our main enterprise agency.

What we all agree on is that better internationalisation translates to economic growth. Recent studies indicate that half of our companies who want to export don’t think their products or services are export-ready and that’s got to be a concern. In UK terms, SMEs drive the economy and over 80 per cent cite overseas expansion as their number one priority. So there’s a gap to make up here.

Not infrequently, it is the companies with non-traditional business models who succeed best in international markets. The UK’s largest tech incubator, CodeBase in Edinburgh, celebrated its third birthday last week and is home to many fast-growing companies who export from their inception.

Administrate, who sell software to workplace training providers across the globe, won its first contract in the Middle East and last year opened an international office in Beirut to serve an increasing client base in the region. Health tech start-up Relaymed is now partnering with Siemens, Europe’s largest manufacturing and electronics group, with a software solution to ease the administrative burden faced by physicians across North America. The web allows SMEs like Administrate and Relaymed to go multi-national from day one, so-called “micro-multinationals”.

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A micro-multinational can also be a micro-brewery, like the Keith Brewery in Moray whose fortified beer is the tipple of choice for Taiwanese businessmen out for a night with their workmates. Whether in the food and drink industry or on the tech scene, innovation is the name of the game.

I met a founder recently whose team has built an online tool poised to help global tech titan Alibaba combat counterfeiting on its site. Given it’s a site used by almost half a billion active buyers and with China’s own record of innovation, it’s cool that a small Scottish company could end up partnering the “Chinese Amazon”.

There’s also a nice tale surrounding the genesis of Scottish daily fantasy sports tech phenomena FanDuel that illustrates the importance of understanding your customer in a foreign market. Co-founder Rob Jones sat in a coffee shop in San Francisco for a week with a spreadsheet of baseball fixtures and players, a sign asking patrons to predict results and on day one signed up 30 people. The feedback from those 30 people helped guide the development of FanDuel’s first product.

A Bob Keiller story to finish about the importance of understanding cultural differences in new markets: when you’re trying to sell to a Muslim delegation from Brunei, which he once did in the Aberdeen HQ of Wood Group, remember not to serve ham sandwiches at the buffet!

• Nick Freer runs communications and business advisory agency, the Freer Consultancy