I could even say ‘export or die’.  Predictions are bound to have huge error bars, but we know certain facts about UK technology and engineering business:

• The UK is the 22^nd most populous nation, with 0.9% of the world’s population
• We have the 7^th largest nominal Gross Domestic Product (GDP) at 3.5% of the world’s output
• We are still the world’s 6^th largest manufacturing economy
• The US, Europe and Asia are our main trading partners, with the US alone accounting for 30-50% of global demand for many technology products and services.
• The world economic outlook forecasts 2012 GDP growth of 1.6% in the UK

Compare the following forecasts

• EU 1.4% (including Germany at 1.3%)
• US 1.8%
• China 9.0%
• India 7.5%
• Emerging Economies as a whole 6.0%
• Worldwide 4.0%

The nature of technology is that it sees no national boundaries – your business should be born global.  Technology products and services can be sold worldwide with adaptation to local customer preferences.

Qi3’s recent survey of the instrumentation industry showed clearly that those companies which invested in export sales have performed better in today’s turbulent economic environment.  They have a broader exposure to demand in the growing economies, especially in Asia.

So what will you do to increase your exports in 2012?

There’s hope for us baby-boomers yet, according to a survey by the Global Entrepreneurship Monitor reported in Business Insider. According to the study, people over 35 made up 80 per cent of the total entrepreneurship activity in 2009.

A 2009 Kauffman Foundation survey of 549 startups operating in “high-growth” industries – including aerospace, defence, health care, IT and electronics – and found that people over 55 are nearly twice as likely to launch startups in these sectors.

So it’s not just about youthful energy.  The lessons seem to be:

• Utilise your experience of how to succeed, compete effectively in the marketplace and learn from past failures
• Use your broad networks built up over the years – build a team with people whose strengths you know
• Use your (hopefully) greater financial stability and acumen to raise finance and manage the business effectively

In my world of engineering and instrumentation, there are vast stores of knowledge and practical experience built by people who have ‘been there, done that’.  Engineering is part learning and part experiential.  It’s an important lesson in a rapidly changing economy that we can use this experience to increase our own chances of business success in a new venture.

One of my pleasures is catching up with old colleagues and friends, and seeing where life and opportunity has taken them.  Since I started Qi3 in June 1999, I’ve been involved in over 30 business start-ups and nearly 350 collaborative partnerships, so it’s hard to track them all.  I’ve sometimes described my role in brokering Knowledge Exchange as equivalent to making snowballs on a summer’s day.  Most of my efforts melt away, but others gradually gain momentum and turn into business success.  Business in general and technology business in particular has plenty of risk, so seeing the fruits of one’s efforts is a particular pleasure.

It takes time and patience though.  A British Business Angels Association survey of Business Angel investments showed that the companies sampled take an average of three years to fail, or six years to provide financial return.

A recent NESTA report focuses on the 6% of companies in the UK that exhibit high growth rates of over 20% in a year.  These 11,000 businesses are responsible for over 50% of new job creation, vital in these days of austerity and high unemployment.

Interesting findings are:

• High growth doesn’t just result from technological invention.  High growth businesses are spread across many sectors
• High growth mainly comes from businesses over 5 years old

Of course, the skills, ambitions and characteristics of  owners and managers is the key.  Entrepreneurial attitudes towards innovation in technological and business processes correlate with growth performance.

The report’s conclusions are sadly somewhat more public sector focused and predictable.  It argues that government should:

• Remove regulatory obstacles to growth
• Support ‘access to finance’ through measures such as co-investment funds
• Develop a skilled workforce
• Support flows of knowledge and collaboration
• Improve demand for innovation by harnessing the government’s own £200bn annual spending on products and services

That’s all very well, and it’s hard to argue with much of this.  But (and you should have felt a ‘but’ coming) I have some concerns about this approach:

• Government is extremely bad at removing regulation – look at the discussion over the past weeks about the impact of April 2011’s new regulations on microbusinesses.
• I’m a huge fan of using government’s expenditure to favour innovative solutions, but with the laudable exception of small amounts of SBRI funding, the drive in government procurement is leading towards favouring large businesses through a series of insidious barriers to entry.
• Tax isn’t mentioned.  Whilst the new government is encouraging entrepreneurship and risk investment, entrepreneurs face considerable penalties for earning above average salaries.
• Most importantly, the NESTA report focuses its recommendations on the supply side (government intervention).  I feel that it should be rather more focused on what makes people want to put themselves out on a limb, move out of their comfort zones and grow their businesses.

Anyway, I’m off to try to find another one of those 6% of businesses to invest in.

More mature renewable energy sub-sectors such as solar, onshore wind and energy efficiency are attracting the majority of equity and debt while less advanced subsectors are finding it harder to obtain financing.

A new report, published today by Taylor Wessing, discusses this crowding-out effect.  It is driving a wedge between novel technologies and those market sub-sectors which have moved somewhat beyond the arena of technological risk into that of regulatory, land acquisition, planning and development uncertainty.  Scale-up and consolidation within these sectors is capital efficient and of a scale sizeable enough to interest the Venture Finance community.

Less mature technologies are however less likely to receive funding, as investors increasingly see renewable energy as a done deal.  The survey reports an early-stage funding gap for European companies, especially in the biofuels, marine and green transportation sectors.

Should I be surprised that investment propositions based upon wind farm development should be more attractive than those relating to new wind turbine technology?