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New! 2014 Edition

Country Commercial Guide - Doing Business in the UK

Introduction to the UK Country Commercial Guide 2014

The Country Commercial Guide (CCG) is a comprehensive annual review of the United Kingdom's commercial, economic, political and investment environment.  The information contained in the CCG will assist U.S. companies who wish to do business in the UK.  Below you will find the introductory chapter of the CCG, which includes the UK market overview, its challenges, opportunities and market entry strategy.  The remainder of the CCG consists of the following chapters:

  • Political and Economic Environment
  • Selling U.S. Products and Services
  • Leading Sectors for U.S. Export and Investment
  • Trade Regulations, Customs and Standards
  • Investment Climate
  • Trade and Project Financing
  • Business Travel
  • Contacts, Market Research and Trade Events
  • Guide to Our Services

Download the full 2014 guide with easy access to Chapters above: 

UK Country Commercial Guide 2014.pdf

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Market Overview

  • The United Kingdom (estimated 2013 GDP of $2.5 trillion) has the sixth-largest economy in the world according to the CIA’s 2013 World Factbook, the third-largest economy in the European Union, and is a major international trading power.
  • While the United Kingdom is geographically relatively small (about the size of Oregon), it has a population of more than 63 million people.
  • Highly developed, sophisticated, and diversified, the UK market is the second largest in Europe and the sixth largest in the world for U.S. goods exports. The United Kingdom is the second largest market in the world for U.S. service exports.
  • With few trade barriers, the United Kingdom is the entry market into the European Union for more than 43,000 U.S. exporters.
  • U.S. exports to the UK of goods and services combined were estimated to be worth nearly $105 billion in 2013.
  • Major categories of U.S. exports include aerospace, automotive, electronics, healthcare, information technologies, telecommunications, and safety/security equipment.
  • The United Kingdom remains the number one overseas market for travel to the United States with more than 3.8 million UK travelers estimated to have visited the United States in 2013.
  • The U.S.-UK investment relationship is the largest in the world with a cumulative bilateral stock in direct investment valued at nearly $1.1 trillion in 2012. Over two million jobs, approximately one million in each country, have been created over the years to manage and drive this investment.
  • More than 7,500 U.S. firms have a presence in the United Kingdom which is also the top location in Europe for U.S. regional headquarters covering Europe, the Middle East, and Africa.
  • A major international financial, media, and transportation hub, London is also headquarters to the European Bank for Reconstruction and Development (EBRD).

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Market Challenges

  • The UK economy grew by 1.7% in 2013, reflecting a gradual recovery from the recession. The economy is showing signs of picking up steam in 2014 with forecast growth of 2.5%.
  • The continuing difficulty in accessing credit, particularly by SMEs, still represents a challenge for many businesses.
  • Weak consumer confidence and broadly static wages continue to dampen retail sales and several well-known high street brands have disappeared as a result of severe financial difficulties. There are signs, however, that as the economy and the local housing market pick up, consumer confidence is returning.
  • The pound has strengthened against the dollar in recent months, making London one of the world’s most expensive cities to do business in.
  • As UK and third-country suppliers represent strong competition, U.S. exporters need to offer differentiated products at competitive prices.
  • Complex EU technical/regulatory requirements can be burdensome.
  • “Devolved Administrations” present some differences in policies and regulations among England, Northern Ireland, Scotland and Wales. Scotland will hold a referendum in September 2014 on whether to leave the United Kingdom.
  • The UK government has introduced deep cuts to public sector spending, affecting many businesses and, more broadly, consumer confidence. Despite an improving economic picture, the government is committed to reducing its deficit and the cuts are likely to continue.
  • A debate has arisen about the UK’s future membership in the EU. The current government is committed to offering an in-out referendum on EU membership if it is still in power in 2017. The Eurosceptic UK Independence Party secured 27.5% of the vote in recent European parliament elections.

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Market Opportunities

  • The United Kingdom is a highly sophisticated market with strong demand for products and services that improve productivity, including ICT software and services that lower costs and improve business efficiencies.
  • There is ongoing, strong demand for a wide range of equipment and services related to safety/security and, in particular, for cyber security.
  • The United Kingdom’s commitment to low-carbon targets is driving market demand for U.S. products and services in the area of renewable energy, energy efficiency, low carbon/green technologies, smart grid technologies and e-vehicles.
  • The proposed U.S.-EU Transatlantic Trade and Investment Partnership (TTIP) has the potential to cut tariffs and address market barriers, thus creating additional opportunities in the UK for U.S. exporters.

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Market Entry Strategy

  • Demonstrate a clear value proposition and competitive advantage (i.e. price, quality, branding).
  • Pay close attention to both the obvious and subtle cultural differences between the United States and the United Kingdom and adjust marketing strategies accordingly.
  • Evaluate prospective partners carefully and choose an experienced, well-established local distributor.
  • Be flexible working with a UK partner during this challenging and prolonged period of economic recovery.
  • Express commitment to the market with a long-term perspective.

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