Economic rationale

The main role for Government is to set the framework within which business can respond creatively to the challenges and opportunities of a challenging global environment.

UKTI’s Corporate Strategy, Britain open for business, is at the heart of the UK Government’s drive

BIS Economics Paper 13 takes a fresh look at the economic evidence base for trade development and attracting inward investment.

The Paper examines criteria which underpins the economic rationale for Government support for international trade and investment, focusing on support for exporting and inward investment by exploring:

• the economic benefits from exporting and inward investment, and where are they likely to be greatest?

• whether there are market failures and other barriers which would prevent the private sector from fully realising these potential benefits unaided?

• whether Government can intervene effectively to overcome these barriers, generating benefit sufficient to justify the cost?

The paper also reviews recent trends in UK export and foreign direct investment performance, and looks at evidence on the firm level decisions and behaviours which underpin these trends.

Other key documents include:

DTI Economics Paper 18 - International trade and investment – the economic rationale for government support (July 2006)

The Economic Paper explores the challenges and opportunities which affect firms of all sizes and the potential impact of globalisation on UK prosperity. The paper looks extensively at ways to ensure that government provides the right kinds of support to the business community where needed, in order to maximise UK prosperity as this will affect the choices businesses make about locating their activities in the UK as well as UK businesses successfully identifying and meeting the changing needs of customers overseas.

2004-05 Study of the Relative Economic Benefits of UK Trade & Investment: Final Synthesis Report (March 2006)

This study was undertaken as a requirement of the 2004 Spending Review Settlement, with the purpose of seeking evidence to determine the optimum resource allocation between the two areas of UKTI activity.

UKTI Review of the Evaluation Evidence on Trade Promotion (SQW Ltd, Dec 2005)

The report provides a review of the evaluation evidence relating to UKTI’s trade promotion activities over the last twenty years, and what the evidence has to say about the relative impact and cost effectiveness of UKTI’s interventions to bring about improved export performance.

The Role of International Trade and Investment in Business Growth and Development (R. Harris and Q Cher Li, Sept 2005)

This study reviews the wider literature on International entrepreneurship; Firm-level adjustment to globalisation; and The role of government in business internationalisation.

The Review of Export Promotion (Feb 1999)

In June 1998, the Foreign Sectary and the President of the Board of Trade asked the Cabinet Secretary to oversee a review of the official arrangements for the support and promotion of exports.