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Country Commercial Guide - Doing Business in the UK

Introduction to the UK Country Commercial Guide 2012

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 and Standards
  • Investment Climate
  • Trade and Project Financing
  • Business Travel
  • Contacts, Market Research and Trade Events
  • Guide to Our Services

Download the full 2012 guide with easy access to Chapters above: 

UK Country Commercial Guide 2012.pdf

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Market Overview

  • The United Kingdom (estimated 2011 GDP of $2.3 trillion) has the seventh-largest economy in the world, the third-largest economy in the European Union, and is a major international trading power.
  • Highly developed, sophisticated, and diversified, the UK market is the largest in Europe and the fifth largest in the world for U.S. goods exports.
  • Major categories of U.S. exports include aerospace, automotive, electronics, healthcare, information technologies, telecommunications, and safety/security equipment.
  • With few barriers, the United Kingdom is the entry market into the EU for over 41,000 U.S. exporters.
  • U.S. exports of goods and services combined are valued at more than $100 billion annually, and the UK is the second largest global market for U.S. services exports after Canada.
  • The United Kingdom remains the number one overseas market for travel to the United States, and approximately 3.9 million UK travelers visited the United States in 2011.
  • The U.S.-UK investment relationship is largest in the world with a cumulative bilateral stock in direct investment valued over $940 billion. Over two million jobs, approximately one million in each country, have been created over the years to manage and drive this investment.
  • Over 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

  • While the UK economy grew by 1.1% in 2011, GDP contracted by 0.5% in the fourth quarter of the same year, reflecting continued weakness in the economy.
  • In recent years, limits on availability of credit in the UK economy have represented a challenge for many businesses.
  • Weak consumer confidence continues to dampen retail sales, making some retailers reluctant to commit to new products and lines.
  • Despite the advantage of a relatively strong U.S. dollar, London is one of the world’s most expensive cities to do business.
  • As UK and third-country suppliers represent strong competition, U.S. exporters need to offer competitive prices and terms.
  • Complex EU technical/regulatory requirements can be burdensome.
  • “Devolved Administrations” present some differences in policies and regulations among England, Northern Ireland, Scotland and Wales.
  • The UK government has introduced deep cuts to public sector funding, affecting many businesses and, more broadly, consumer confidence.

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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.
  • Green Opportunities: The UK Climate Change Act is the world’s first long-term, legally binding framework to address climate change through renewable energy with a target of 34% reduction in greenhouse gas emissions by 2020, and 80% by 2050.
  • 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/low carbon/green technologies and Smart Grid technologies.

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Market Entry Strategy

  • Demonstrate a clear 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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