Episode Thirty: Keep Calm and Carry On

Moving Through Unexplored Territory

Businesses are all about people. It’s the old-fashioned cliché, look after your staff and they will look after you.

Recorded at the British Chambers of Commerce Annual Conference in March, this episode features Terry Scuoler, Chairman of the Institute of Export and International Trade, who talked to us about the impact of Brexit on international trade and supply chains, how increased access to data has driven transparency and growth and the potential impact of COVID-19.

(Please note that this podcast was recorded prior to lockdown.)

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The Power of Data Podcast

Episode 30: Business – Keep Calm and Carry On

Guest: Terry Scuoler, Chairman of the Institute of Export and International Trade
Interviewer: Louise Cavanagh, Communications Director, Dun & Bradstreet

Louise 00:00
Welcome to the power of data podcast. Today we're at the British Chamber of Commerce annual conference in London. And we're joined by Terry Scuoler. Terry is the chairman of the Institute of Export and International Trade and is currently Manufacturing Sector Policy Adviser to Santander. Welcome Terry.

Terry 00:15
Louise, Thank you.

Louise 00:16
I know you've got an impressive career across the manufacturing sector and beyond. Can you give our listeners a whistle stop tour of your journey today, by way of introduction?

Terry 00:24
Louise once again, thank you. It's a pleasure to be here. And yes, of course. I started out life at university being an economist and that background training with some degree of statistics and econometrics has stayed with me I suppose for the rest of my business life. But after that, I joined the army and was an infantry and paratroop officer, bit an interesting angle before I went into business. I think my formulative of business career, 15 years or so was with BAE Systems, an international defense aerospace company, going up through the ranks to Divisional Director, then becoming Managing Director of high tech company for Ferranti Technologies, and then eight years leading one of the UK's biggest business groups in terms of the Engineering Employers Federation. It has been fairly wide ranging and if I may say so, fascinating, I've learned a lot. And hopefully now in the process of feeding something back.

Louise 01:19
not many people can say they've enjoyed I've had a fascinating career their whole life through that's quite an achievement. Can you tell us a bit more about your current role at the institute? And sort of the key priorities you and the institute are focused on at the moment. I'm sure Brexit and coronavirus are top of mind at the moment, but it'd be great to find out a bit more about what you do there.

Terry 01:37
I wondered how long it would be before the word Brexit and corona came into our debate here. And it's and quite rightly, they've come in fairly early on. Institute of Export and International Trade very much what it says on the tin, encouraging, working with British businesses to become more productive, to expand their footprint and expand that globally. And in so doing through, of course, the whole exporting agenda. And of course, when you talk about trade, it's not just about exports, it's about facilitating those inputs that come through global supply chains into making the whole economy work. And I think that you mentioned Brexit, a whole new ball game is about to open. I think the next nine months are going to be interesting to see what we get to the end of this year around the first of January next year. I suspect we'll develop that over the next few minutes and come to corona later.

Louise 02:32
Thank you. I'm digging a bit more into sort of the Brexit piece and the impact on trade. We've obviously been through several years of uncertainty and British businesses and businesses elsewhere who are operating across borders have not had that certainty around what it means for tariffs and cross border trade. What's your view on the level of potential disruption to supply chains and sort of, from a trade perspective access to other markets?

Terry 02:56
It’s an interesting one and I think you use the term uncertainty. I think that must be the understatement of the day, or perhaps even the last the last few days in terms of my engagement with people. There's been massive uncertainty. And I think that that uncertainty will still prevail during the course of this year during the transition period, as you have so rightly said. I think however, my call to businesses is to be bold. Yes, I suspect there will be some disruption to not just what we call OEMs and supply chain companies, but I sense there will be some form of agreement going forward with the EU. Now whether that is frictionless free trade, whether it covers the what we call the good sector, or the wider service sector, I think remains to be seen. If it is a Canada-type deal that appears to be getting the headlines now, then that is only for goods, it doesn't cover 80% plus of our economy. So I think that it will be challenging. But my message to businesses once again, I use that word be bold. And I think also that you have fed back to me in an earlier piece of correspondence with me that 90% of global growth will not come from continental Europe, it will be come from developing markets around the world. Equally, for goodness sake, let us maintain and continue to develop that trade that we have with the EU.

Louise 04:24
Yeah, and some of the research and the analytics we've done as a company has shown at Dun and Bradstreet, we've shown that this sort of huge level of optimism and confidence, especially among the smaller businesses as well, which might be surprising to some people that, you know, people are just carrying on with their business and all the changes that come and the uncertainty, they're managing them and things still need to happen, things need to be sold, things need to be moved around the world, and that sort of level of optimism and that boldness is probably there.

Terry 04:52
Absolutely right. Of the 5 million or so, British businesses, the vast majority, particularly the smaller business leaders, the businessmen and women out there, just want to get on with it. And I think in no way shape or form Louise do I mean to be political here, but I think there was a sense of a) frustration, if not bordering an anger, that led to a very, very clear mandate for the new government or the existing government, as well as know the new government on the morning of the 13th of December, just to get on with it, and manage it as best we can. Some of the messaging from some business leaders, some of the bigger business organisations, and one of them, we're visiting here today, clearly, are very concerned. But I think that the heartbeat of British business is one of the let's get on with it. And an underlying confidence. That said store called business influences from government down, need to encourage them and give them some guidelines and help to do so.

Louise 05:52
Talking about the way we trade internationally, regardless of Brexit, how do you think that has changed over the years and your extensive experience in the manufacturing industry and beyond, how have you seen the way we trade changing? And we were talking to our economist this morning, for example, and he was saying that 10-20 years ago the percentage of world GDP that was concentrated around China for example, was a lot smaller and now, borders are almost disappearing because a lot more businesses trade cross border.

Terry 06:22
Indeed, welcome to the new global world. This has been, this has been happening steadily, what, since the early 1990s. And it will continue to happen. It is a global diversified world, we are mutually dependent upon one another in terms of supplying goods and services and critically dependent on an ever growing and more powerful and I think we welcome that developing world as they grow the economy and become evermore bigger industrial players.
And with it of course, the grow wealth the rural prosperity, they grow this dreadful town, middle class purchasing power, which reinvented turn can benefit from. So I think to those people that are looking, (and I would suspect there are not many) looking to deny these global changes. And by the way, something you are very, very keen on the data that goes with it and the need to have that data and analyze it and go with it. My message would be Wake up and smell the coffee. But it's a, it's an interesting one. And equally, I think it does have to be managed. And it does have to be managed with diplomacy and statesmanship. And when I look at some of the growing protective measures coming from a number of economies, and it's not just the United States, you look at China, and indeed the EU. Growing protectionism, of course, can only act as a dampener on growing trade, global growth, and the need to interact.

Louise 07:51
Thank you. We touched on data and the way that it can be used to support businesses obviously, it's something very close to our heart here at Dun and Bradstreet. Obviously, more data is available than ever before in our, you know, in the wider world and society at large. So much, though it's hard to make sense of it all. That increased access and availability today to the increased transparency and open access, is that something that you see as a positive thing helping to drive growth?

Terry 08:17
I think the answer to that is got to be yes. But there's a but coming as you can probably tell. I suppose, we the allegedly strategic end of business, as opposed to the practitioners of those who manage data would be looking at what is data, how is it analyzed, I suppose even before data, how is it inputted and gathered? What then is data? How is it analyzed and determined? And then, what does it lead to in terms of executive management and planning? So I think it's not just the word data that's important here. It's, it's all of that how you get effective information from it and how you use it. That said, at its most basic, just some of the things data that you can gather in terms of, we referred a moment ago to trade flows, just ease of exporting. What is in a container? How full is it? Where is it at any given point in the world, but affair to manufacturing and in a recent an engagement we had with the chairman of Rolls Royce just and particularly my own experience and Ferranti Technologies when you're talking about safety critical systems, what we call man, I suppose, now woman in the loop, then the data you can gather about engine where the need to replace the need to modify the need to repair. All of that data is incredibly valuable, very welcoming, but it needs to be analyzed, and it needs to be applied through management.

Louise 09:44
Yeah, so effective data management is really key. And we're looking at, in our experience, that there's the non-traditional data service or social media, there's the news hubs there's and we're also looking at alternative sources of data and things like shipping data or weather data that have an impact on business. So it's looking at the much the wider picture, I think people are realising that that kind of information can help them make decisions.

Terry 10:07
Absolutely. I think also, it's not just and when we associate data, we possibly tend to look at maybe consumption, maybe retail, maybe gathering market information on trends, what people are doing, what they're wearing, what they will do, based not only in historical data, but of course, as data and the application of becomes ever more sophisticated, then you're almost indulging in the psycho analysis of what people will be doing in the future, based on trends. All that is important. But it's not just about consumption. It's not just about marketing. It does apply to every single sector that I've been involved in, in my business career. That said, there's got to be a limit to what you can gather and how you use it.

Louise 10:48
Yes, there's so much out there. Our Chief Data Scientist who we interviewed recently, actually, and he says it's impossible to measure it now. And when he sees like, quotes about the amount of data out there in the he always says I don't know where they get this wrong because it's a measurable now it's just out there. It's, it's a thing in the ether that no one can measure because it's such a huge amount of data.

Terry 11:09
it's absolutely massive, isn't it? I suppose therefore, that raises the issue of opportunity in terms of it becomes ever more effective and intelligent as opposed to pure data, but equal I suppose, the more there is there's some form of greater risk that therefore the gathering of it the inputting of it allows some form of misinterpretation or error and the harder it is to analyze.

Louise 11:33
and I am going to go back to the C word in terms of coronavirus. And from your trade experience but also in the into the manufacturing sector, our latest data from Dun and Bradstreet is shown corporate liquidations are down in manufacturing which is a positive signal. But going forward the predictions are that looking at the next quarter's data that the picture might have changed. What are you hearing from businesses and partners that you're talking to about how the current situation with coronavirus is impacting their businesses.

Terry 12:01
I think we're in unexplored territory here. And we're still very much picking up information from businessmen and women. When I look, for example, at the Chinese, the recent Chinese PMI went down from what 50 to 53, clearly in positive territory, north of 50, down to a shattering 35, huge, huge shift for all with a knock on effect of that, in terms of their market, their ability to consume or desire to consume. Equally important to that, that ability to export, and, of course, a huge export into the into the UK. Am I fearful? I think I've got to be fearful. But if I'm honest, I think even though our government which appears to be taking quite a robust leadership role here, not quite clear as to what that fear should mean in terms of action, I think in direct answer to your question, it's got surely to have an impact on economic growth and impact on our economic activity? To what extent that will mean what reduction in the 1.3% projected growth for this year, the welcome very high level of employment we've currently got with 3738 million people currently in employment, incredibly low employment rate of 3.8 3.9%. I don't know. And therefore, I'd support government support businesses, in taking every reasonable precaution we can, even if those precautions, were in the short term to further dampen economic growth at the expense or rather the benefit of course, limiting the contagion of this virus.

Louise 13:43
Yeah, it's gonna be a very interesting year, I think for various reasons. And this is difficult. It comes at a time that that was a challenging time anyway, for UK and for the world economy really.

Terry 13:53
Yes, I remember I was very heavily involved in the Brexit debate and campaigning to remain as the CEO Engineers Employers Federation. And if I'm honest, I then became following the referendum, I became a Brexiteer, because that was a democratic vote at the time. And it has not changed since then. And I think there will be a stutter. Brexit alone, particularly through some form of difficult if nonexistent trade agreement by the end of this year will have some impact on our economy going forward. But I do believe that we will weather that and come through that. And it's difficult just to project what would happen with corona going forward.

Louise 14:33
Yeah, it's an impossible… no one's got a crystal ball.

Terry 14:36
Maybe we three should be sitting here today, with masks on and gloves on. Yeah, but I take the view and I think and in no way shape or form do I criticize individuals for being careful or cautious. Those particular who are vulnerable, but I do sometimes look at the head Stampede, instinct and wonder if occasions we are just overstating this. I hope I am, but let us be cautious in any case.

Louise 15:02
Great, thank you. And I know that we've got limited time today. But I just wanted to finish off with one final question. So we often ask our guests, if there's one piece of advice that you could offer to our listeners, be they business leaders or industry stakeholders, what would that be and whether that's something related to your role as international trade, but also as somebody who's extremely experienced businessman, whether there's someone who's inspired you or, or a piece of advice that you'd like to leave us with?

Terry 15:29
I'll start with the last one first, through the periods of my army and business life, I can probably identify three individuals, obviously senior to me at that point in time, who just I looked up to, respected and through their guidance and help, helped project me on to the next level the next rung or rungs of my professional ladder. I will never forget their help and advice and that is critical. Call it coaching, call it mentoring, call it what you will, but absolutely critical and I think businesses need to look at that and I welcome it. I welcome it and hope and the businesses I lead, we do that to some greater degrees and lesser degree. I think messaging throughout my business career, I have invested, and I think on occasions, you have to invest counter-cyclically. Markets even in today's issues of Brexit and sadly corona markets will pick up we will weather the so-called storms. Sadly, I noticed that British business investment has been dropping off the last couple of years down about 3.8% last year. Be bold, do invest, invest even when the signs are telling you not to invest i.e. counter-cyclically and have the courage to go on and run your businesses. And of course, businesses are all about people and just look after your people. Old-fashioned cliché, look after your staff and they will look after you.

Louise 16:57
I love that as a nice message to finish on. Thank you very much again, Terry, we've really enjoyed having you here.

Terry 17:03
Thank you much indeed. Thank you.

Louise 17:05