Credit Management November 2022

BUSINESS AND INDUSTRY
Power to the People
Manufacturers in both the US and the UK are
facing similar challenges when it comes to
international expansion.
AUTHOR – Adam Bernstein
IN an age of globalisation where the world has
shrunk so that communication and trade can be
done at the press of a button, it’s telling that despite
threats such as COVID, protectionism and even the
Russian invasion of Ukraine, the world economy is
surviving.
As the Bank of England noted in the July 2021 issue of
Bank Overground, the COVID pandemic caused significant
disruption to global trade - in 2020, it fell by 8.9 percent. But
trade has rebounded. Indeed, the World Economic Forum
said in a report entitled three charts that show the state of
global trade in 2022 – and they might surprise you, published
September 2022, that global trade was 10 percent higher
than pre-pandemic levels in May 2022.
But there are still plenty of threats around. Weaponised
energy supplies, Russia’s maintenance of its bellicose stance,
a general shortage of labour, and rising inflation are but
some. Fortunately, commerce – especially manufacturing
and transport – has become far more resilient through
greater levels of digitisation and automation. Such capitalintensive
processes meant that they could cope in an era of
social distancing.
Nevertheless, manufacturers still need to find ways to
deal with the potential for disruption to supply chains from,
for example, US action in relation to Chinese technology
abuse, rising protectionism, and regional conflicts that
spill over into the global marketplace. With the scene set,
it’s interesting to note the results of a survey from law
firm Walker Morris of 200 senior managers in US and UK
manufacturing firms, specifically, those located in the US
Midwest and the UK’s Northern Powerhouse.
It made a number of findings and noted that both regions
have plenty in common and are traditional industrial areas
that do much for exports. They have moved on and feature
newer industries including renewable energy, electric
vehicles, bioscience, nanotechnology and advanced
manufacturing. Both areas are still involved in heavy
industry, but they now possess research centres,
innovation parks and high-tech production facilities.
James Crayton, Head of Commercial at Walker
Morris, says the object of the survey was to understand
the challenges and opportunities that both regions
are facing.
In overview
From the data it appears that more than half (52
percent) of the US and UK manufacturers said that
international expansion was a goal of theirs and 93
percent saw opportunities for increased bilateral
trade. However, firms on both sides of the Atlantic
said they struggled with regulation; foreign legal
systems in particular posed a challenge for 87
percent of businesses.
At the same time, digital transformation was
on their minds, and 76 percent said that they were
investing in operational technology. But finding
Brave | Curious | Resilient / www.cicm.com / November 2022 / PAGE 34