Nottingham woos trade with Germany31 July 2012
.The Invest in Nottingham Club is targeting Germany for trade links. Lufthansa has stepped up its German destinations from Birmingham and Manchester, adding the German capital Berlin.
And UKTI (UK Trade & Investment) believes the East Midlands has real strengths in healthcare and engineering to sell to Germany and beyond.
UKTI figures show exports of goods from the East Midlands to Germany increased in each of the last two years - in 2011, it was up 54 per cent from £1.34bn to £2.1bn.
Paul Southby, chairman of the Invest in Nottingham Club, said it had picked Germany and China for pragmatic reasons. Some Nottingham firms have strong links with Germany - the city is twinned with Karlsruhe - while the University of Nottingham has its campus in Ningbo, China.
There are also the regular BMI Regional flights between East Midlands Airport and Frankfurt.
Mr Southby said: "The reason for choosing Germany was practical. It is a market with which Nottingham has links through companies, law firms and BMI Regional flights.
"These are helpful and we decided to start in the areas where there are good people connections."
The chairman singled out manufacturing and engineering as sectors in which Nottingham should seek alliances.
Dan Rutstein is the director of UKTI at the British Embassy in Berlin.
He pointed out that the German economy remains in growth at two per cent and that the Prime Minister David Cameron led a trade delegation there last year.
He said that developed markets such as Germany will remain important despite the double-digit growth seen in some BRIC countries (Brazil, Russia, India and China).
"British companies export to Germany twice as much as all the BRIC counties put together - 39.4bn euros," said Mr Rutstein. "UK trade with North-Rhine Westphalia is about the same as India and China put together."
Mr Rutstein pointed out that last year UK exports to Germany grew by 16 per cent, which he attributed to the country's strong economy and continuing market strength.
"It is an open, receptive, mature and sophisticated market," he added. "The opportunities across all sectors are very strong.
"Some of the opportunities are as a result of growth by the UK coming out of recession. So 16 per cent brings us back to the levels pre-crisis."
UK sectors exporting include manufacturing, oil and gas, food, ICT and healthcare.
Mr Rutstein, who is based in the British Embassy in Berlin, likes quoting statistics. "Germany still hosts one third of the world's trade shows. A lot of work is done through trade shows such as Medica in Dusseldorf, a huge show aimed at the healthcare sector, attended by 300 British companies.
"It is a big opportunity for UK firms to export to Germany but also to the world via Germany," he added. "About 5,500 British companies pass through Germany every year visiting or exhibiting at trade shows. They are a fantastic opportunity.
"Trade shows are a good way of growing out of recession and we can learn a lot from the German model."
Trade minister Lord Green wants to double the number of British companies UKTI works with from 25,000 to 50,000 a year.
"If we were able to do that, it would bring us up to the same percentage of companies exporting as Germany.
"About 25 per cent of German companies export, in the UK it is 20 per cent."
Mr Rutstein said German companies think globally very early in their creation.
"It is a well developed part of long term investment strategy to look at overseas markets as part of the expansion process."
His department works with about 1,000 British companies a year.
Many German firms build an export strategy into their business planning early on. The standard business model is: "Start with your neighbours".
Debt is something German companies and individuals like to avoid, said Mr Rutstein. Companies finance exports through capital reserves rather than through borrowing. "They are very long-term - they think about their long term relationship with their employees."
The German model, says Mr Rutstein, is about exporting goods rather than services.
"If British companies have a good product, the Germans will be interested and trade fairs are an opportunity to see what competitors are doing."
The British Embassy can play a vital role in helping to make introductions and set up meetings.
The impressive embassy and ambassador's residence can be used for meetings, seminars and entertainment as can a network of UK consulates.
German companies are "very happy" doing business with British businesses, added Mr Rutstein.
"We are seen as innovative, reliable and good people to do business with. They like the up-front way we do business and appreciate our level of innovation. They love our creative and innovative products in areas such as design, film, music.
"Even in automotive, where they know they are the experts, if there is a good supplier, they are happy to work with the British supply chain. Once you work with a German company, they tend to stick with you. They are very loyal."
Mr Rutstein explained that Germans can be very direct - which makes meetings shorter - and although most speak perfect English, they prefer to do business in German.
"They want brochures to be in German, they want contracts in German, often in the first business meeting."
Germany's own overseas trade and investment arm is run through chambers of commerce which it is compulsory for firms to join although German Trade and Invest also provides business connections. It is the Germany Chamber of Commerce in London which largely helps firms in the UK, said Mr Rutstein.
"It is a different model and they aren't co-located in embassies like UKTI."
There are about 2,500 German companies in the UK employing 400,000 people and with about £100bn investment in place.
Last year, up to 70 new investments were made in the UK from Germany.
"There are still significant investment flows into the UK from Germany," he added.
On the edge of Berlin, the new Berlin Brandenburg Airport is nearing completion after having been delayed. It is due to open on March 17, 2013 named after former Chancellor and Berlin Mayor Willy Brandt.
Last year, Berlin attracted more than 358,000 visitors from the UK.
Mr Rutstein said the German capital, traditionally more of a political powerhouse than a financial centre, is a changing city since reunification in 1990, becoming more business-centric.
"Industry hasn't traditionally been that strong but there is a strong digital and technological scene which is growing quickly. You can feel the economic activity increasing. Even if major companies are not represented in Berlin, their board members are often in town."
According to Mr Rutstein, Lufthansa's new routes to Berlin from Birmingham and Manchester are aimed at sending a message that Berlin is a serious business city which wants to develop strong links with companies in all parts of the UK.
The routes also help re-balance the UK economy, he added. "The UK economy isn't just about financial services in London. It is real manufacturing from the whole country. Regional airports offer fantastic routes across the world, that is a key message."
Regarding Derby firm Bombardier's loss of the huge Thameslink contract to German-owned Siemens, Mr Rutstein pointed out that Siemens is setting up UK facilities for the contract, thereby generating new jobs.
"We are aware of the controversy. It was one inward investor losing out to another, " he said.
And he explained out that Siemens spent £1.9bn in the UK last year across the supply chain and has been investing in the UK since 1843.