UK TRADE AND INVESTMENT

COMPARATIVE STUDY OF SUPPORT FOR INTERNATIONAL EXHIBITIONS IN SIX COMPETITOR TERRITORIES

FINAL REPORT

Prepared by

Manufacturing Technologies Association

International Consultancy Group Ltd.

September 2007

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TABLE OF CONTENTS

EXECUTIVE SUMMARY 2 CHAPTER 1 INTRODUCTION AND BRIEF 3 CHAPTER 2 EUROPEAN UNION 4 CHAPTER 3 UNITED KINGDOM 7 CHAPTER 4 FRANCE 11 CHAPTER 5 SPAIN 18 CHAPTER 6 GERMANY 24 CHAPTER 7 ITALY 32 CHAPTER 8 TURKEY 39 CHAPTER 9 CHINA 42 CHAPTER 10 COMPARATIVE ANALYSIS 44 CHAPTER 11 CONCLUSIONS AND NEXT STEPS 50

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EXECUTIVE SUMMARY

The subsidy levels provided by UKTI to companies exhibiting at international exhibitions are almost comparable with those offered by its counterpart in France, but significantly lower than other national programmes, and regions in the European territories compared in this study provide alternative and additional funding for companies participating in international exhibitions An equivalent or greater number of exhibitions are subsidised by these countries. The range, levels and targeting of subsidies offered in Europe are much broader than TAP provides and give more funding options to companies seeking subsidy. The European regions are a key component in providing this range, but UK regions are largely absent from direct involvement in exhibition funding yet could become more actively involved in a restructured TAP process. There is a European trend towards encouraging national branding (“Made in …) for presence at any level at international exhibitions, and even countries with strong regional entities such as Italy and Spain are going down this route. This is considered, by an Italian Minister, to contribute significantly to increasing national exports. UKTI branding, while noticeably present at key events and other trade shows, is considered relatively weak, yet with an improved strategy could lead the UK branding process. UKTI should consider involving all stakeholders in a slightly altered international exhibitions strategy and funding process which would more strongly delineate its own positioning and agree a role for the regions.

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1. INTRODUCTION AND BRIEF

In recent years UKTI support for corporate participation in international exhibitions has undergone many changes. Reduced funding levels have necessitated more precise targeting of support to companies that both require extra assistance and are capable of utilising it constructively. In addition, key exhibitions have been targeted at which UK companies have a real opportunity to penetrate new and profitable markets, and it is likely that this targeting process will be further refined as budgets come under further pressure. In autumn 2007 UKTI will prepare a strategy to address future support for international exhibitions. Informal discussions with Ron Archibald, Director, Tradeshow Access Programme, indicated a requirement for comparative insight into the nature and levels of support provided for international exhibitions by key competitor nations. The outcomes of this comparative analysis will:

• Provide a broad and reliable outline of the competitive environment in which UK companies operate when obtaining support for attendance at international exhibitions

• Provide UKTI with an indication of effective and acceptable practices

currently adopted by competitor nationals that could potentially be adapted for application to exhibition support in the UK

Project scope The study is focused on procedures and funding in support of company participation in international exhibitions in the UK, France, Germany, Italy, Spain, Turkey, and China. Project objectives To review and compare regulations, procedures, funding, and other forms of support provided by six key competitor territories to companies attending international exhibitions, as a means of identifying the true competitive situation faced by UK companies and assisting UKTI in developing effective support mechanisms for UK companies.

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2. EUROPEAN UNION The European Union does not make any specific statements about, or provision for, support provided to companies for the purposes of participating in international exhibitions. Regulations governing this form of aid are encompassed within the general rules regarding acceptable types of state intervention or support for business and industry. The relevant regulatory background within the European Union is that governing de minimis aid provided by the state to enterprises. The specific terms of de minimis aid are complex, but their impact on the provision of exhibition support is principally financial: the rules make no statements about the size of company that may benefit from the assistance, where this assistance may be applied geographically, or how much financial support may be provided on any occasion as long as an individual company does not breach the overall limits set out below. For the purposes of this report, the following definitions are adhered to throughout the study. De minimis aid Support provided by EU member states for participation in international or domestic exhibitions is treated as de minimis state aid subject to a limit of €200,000 over a rolling three-year period. This limit is considered to include national, regional, and Chamber of Commerce funding for exhibitions as available within each territory. Small and medium-size enterprises In the following report the term ‘small and medium-sized enterprises’ (SMEs) conforms to the EU definition effective as of 1 January 2005. Enterprises in this category meet the following criteria:

• Employ fewer than 250 persons; • Annual turnover not exceeding €50 million, or an annual balance sheet total

not exceeding €43 million; • Functions as an independent enterprise, with no more than 25% of its capital

owned by a separate entity. Within the report, references to SMEs will adhere to this definition unless specifically stated otherwise. Indirect support for participation in international exhibitions Direct EU financial support for participation in international exhibitions is not available. However, there are currently two regionally-focused programmes that can

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be used to fund exhibition-related activities conducted as a component part of a larger partnership-oriented project in a defined foreign market.

• Asia-Invest

Cooperation between EU and Asian enterprises to assist regional integration in Asia and facilitate global trade links. Financed activities focused on business matchmaking and capacity building in Asian enterprises. Co-financing is targeted at business and government organisations representing SMEs. Grants are available up to 75% of project costs in all Asian countries, and 95% of costs in least developed economies.

• AL-Invest The programme provides financial support for organisations promoting joint initiatives between European and Latin American enterprises. Funding is accessed by a main project operator, which is a non-profit organisation such as a trade association or economic development body. Eligible activities include participation in trade fairs or matchmaking events. Project proposals must be submitted by the main operator on behalf of a group of participating companies, and financing is available up to 80% of project costs with grants ranging from €14,000 to €250,000.

Additionally, the former Gateway to Japan programme is being replaced by the EU Gateway Programme, designed to assist EU companies with early-stage market entry to both the Japanese and Korean markets. Details of the operation of the programme are not yet available, but it is expected that exhibition participation may form part of projects eligible for funding. The programme is likely to become operational in early 2008. Deviations from standard practice This study did not identify any deviations from relevant rules and procedures for provision of aid to business as defined by either the EU or by respective national or regional governments. In the UK and the four European competitor territories, national processes governing the funding of exhibition participation are in line with EU regulations. Within the four EU competitor nations, bodies providing financial support generally state explicitly that recipients must respect de minimis regulations relating to aid. In most cases it is considered the responsibility of the agency offering grant funding to ensure that individual companies do not breach de minimis limits, but this is dependent on companies providing full and frank disclosure of previous relevant trenches of funding. EU regulations are currently inapplicable in Turkey and China, but in practice their exhibition support regime does not differ dramatically from that of the European nations. As will be seen, Turkey offers significant levels of financial support, and companies have no need to adhere to de minimis limits. However, the fact that funding levels in Turkey have declined from approximately 75 – 80% of exhibition

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costs to the current level of 50% over the past two to three years argues that the Turks are working to bring themselves in line with wider EU practice in preparation for the time when potential EU membership imposes de minimis limitations on Turkish companies. No complaints have been brought to the EU regarding unfair support for participation in exhibitions within at least the last twelve months. Sources European Commission – Directorate-General for Enterprise and Industry

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3. UNITED KINGDOM The UK possesses a highly centralised system of providing support for international exhibition participation. The main forum for grant provision is the national Tradeshow Access Programme, and few of the nations or regions offer any funding schemes to supplement this. The following observations are relevant to the UK national exhibition scheme.

• The UK national programme operates on a first-come, first-served basis • The national programme is focused mainly on new to export companies, with

identified key events open to all participants • Participation in the national programme is restricted to SMEs, with limited

opportunities for involving larger organisations • No provision is made at national or regional level for participation in

exhibitions of an international character taking place in the UK. National programmes UK Trade and Investment -- Tradeshow Access Programme (TAP) The Tradeshow Access Programme is the UK’s national scheme for providing financial support for participation in exhibitions. The programme is funded through UK Trade and Investment, and grants may be approved for either individual participants or groups led by Accredited Trade Organisations (ATOs) which organise exhibition participation on behalf of the group and disburse grant funding to participating companies. Participation in an exhibition as part of an ATO-led group attracts a grant of £1800. In circumstances in which no group participation has been organised, companies may apply for individual support at a level of £1500. Companies may not benefit from more than three grants under the TAP programme. Financial support may be applied to the direct costs of exhibition participation. These include exhibition space, stand construction and design, and utilities. Expenses such as freight costs for products to be exhibited or travel allowances for company staff are not included in the subsidy. To be eligible for TAP funding, a company must be a UK-based SME and defined as a new exporter. For the purposes of TAP, a new exporter is a company that, during the previous twelve months, has derived less than 10% of its turnover from proactive exports, and no more than 25% of its turnover from a combination of proactive and reactive exports. The new-to-export requirement may be waived in two cases. In the first instance, the requirement does not apply to exhibitions in the following territories:

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• China • Hong Kong • Taiwan • India • Brazil • Gulf Co-operation Council (Bahrain, Qatar, Kuwait, Oman, Saudi Arabia,

UAE) • Indonesia • Japan • Malaysia • Mexico • Russia • Singapore • South Africa • South Korea • Thailand • Turkey • Vietnam

Participants qualifying for support in these territories must nevertheless be new to market, which refers to a company that has not exported to the country in which the exhibition is taking place within the past twelve months, and does not have established representation there. Secondly, the new to export requirement is also waived for exhibitions identified by UKTI as key events for high-technology sectors. Companies above the new to export threshold may qualify for assistance if they have not participated in the three previous occurrences of the event. Regional programmes Most regions in the UK were contacted for information on international event funding programmes but did not specify any distinct forms of grant aid for this activity. Other forms of funding that are available tend to focus on more general company support, from assistance with strategy and marketing plans to provision of the Passport to Export programme. The following observations are applicable to UK regional funding.

• Regional development agencies (RDAs) rely mainly on the national TAP scheme for funding exhibition participation

• Money may be made available at the regional or even local level for international exhibition participation, but this is on an ad-hoc basis and usually functions as a minor part of a wider export support programme

Two relevant programmes were identified at regional level.

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Yorkshire Forward – Targeted Export Support Scheme (TESS) The TESS scheme is open to businesses in Yorkshire and Humberside to enable access to funding for the development of an export strategy. Companies participating in the programme may be of any size, but should preferably be existing exporters with the aim of entering new markets or promoting new products or services in current export markets. The programme provides matched funding for approved projects to a ceiling of £10,000. This funding may be applied flexibly to a range of export-related activities, including exhibition costs, market research, overseas travel, or translation and interpretation costs. In terms of exhibitions, there are no restrictions on which elements of an exhibition may be supported by the funding. The available funding for the programme is split between local areas within the Yorkshire region and disbursed according to demand. In practice, this has led to a situation in which the budget allocated to West Yorkshire was used up within the first five months of the financial year, while money is still available under the scheme to businesses in South Yorkshire and Humberside. The effectiveness of the TESS scheme is assessed principally in terms of jobs created in the region, although it is expected that firms will show an increase in export sales as well. Scottish Development International (SDI) SDI does not provide direct support for participation in exhibitions, but it does operate a form of ‘soft support’ in which the agency books and organises a pavilion at an exhibition and sells space to individual participating companies. TAP funding can be accessed by companies in Scotland, but it is not used in conjunction with group participations organised by SDI. SDI may also pay for and organise an exhibition stand on behalf of a Scottish trade association, recovering its costs by selling the space back to member companies. The agency may also cooperate with UK national trade associations in organising exhibition participation if the associations have members in Scotland and are in a key industry sector. Exhibitions for which SDI will offer organised support are identified each financial year, with SDI itself deciding which exhibitions will be supported with an official presence. Priorities are set primarily according to industry sector, with key sectors defined as aerospace, chemicals, contact centres, electronics, energy, financial services, food and drink, life sciences, shared service centres, textiles, and tourism. Within each sector there is an additional focus on identifying major events most likely to support the export performance of Scottish companies. Branding is strongly SDI-focused, and there is little, if any, element of greater UK brand identification.

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Branding and regions Plainly, the key brand for international promotion is the UK brand, evidenced by the presence of national symbols (Union flag/logo), promotional brochures, which include national branding, and other supportive measures. These symbols are most strongly promoted at designated key events, whether in a national pavilion or scattered throughout specialist exhibition halls, and least promoted in international exhibitions outside the preferred territories and where new to export companies are not present. Feedback from a small sample of ATOs suggests that national branding is fairly low-key, allowing ATOs and RDAs stronger opportunities for promotion of their own identities and those of their companies. The critical issue is whether stronger promotion of the national brand would improve the competitive positioning of the UK presence as a whole against exhibitors from other territories, leading ultimately to improved export performance by the UK. Regions can provide a potentially divisive element at international exhibitions through promoting local distinctive identities and this becomes more evident where national branding is weak or diffuse. All the European countries addressed within this project face this issue, but the UK has specific difficulties both in appearing to lack a strong central UK theme to which the regions can be required to adhere, and in its devolved constitutional arrangements. Scotland, in particular, has its own strong and well-known national brand that often competes directly with the UK brand and is funded by the devolved Scottish government. Yet perhaps these problems could be addressed by more carefully delineated sector and country foci. For example, there is little benefit to Scotland in the TAP support for twenty-five international pig-focused trade shows in 2007 – 08, as Scotland has a tiny number of pig producers. On the other hand, Scotland and some English regions have a strong direct interest in the oil and gas sector so this may represent a ‘national sector’ in which strong national branding and regional cooperation would appear most appropriate. Sources Advantage West Midlands North West Development Agency One North East Scottish Development International South East of England Development Agency UK Trade and Investment Yorkshire Forward

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4. FRANCE Support provided for participation in international trade fairs is provided through a range of export support programmes that are available on a national basis, and these are supplemented by various regional programmes designed to support the economic objectives of a given locality. The major elements of the national exhibition support programme are outlined below.

• Direct grants are comparable to or lower than the UK, but other forms of support provide a significant supplement to these amounts

• The national exhibition scheme offers highly targeted support for specific territories and industry sectors

• There is a heavy emphasis on national branding • Cooperation between large and small companies is encouraged; specifically,

‘partnership’ schemes allow for support and mentoring of SMEs without direct subsidy

National programmes Support for participation in international trade fairs is provided at a national level through four different programmes, each one incentivising companies by addressing a different aspect of export promotion. Label France The Label France programme is designed to aid groups of companies participating in various types of international promotion by providing both financial support and national branding. The programme is supported by Ubifrance, the French government agency for international enterprise development. A key element of this programme is branding and support for group participation in international exhibitions. To be eligible for support, an organising individual or association must assemble a group of no less than five companies with a common industry or sectoral interest. The operator may be an individual, association, or other body located either in France or in the EU; French Chambers of Commerce located abroad may also function as organisers. In practice, Ubifrance organises some of the national pavilions itself. Organisers have several ways of benefiting from financial support under the programme. Basic financial support can be provided to the organiser on a pro-rata basis depending on the number of companies participating in the exhibition. The amount is fixed by the responsible committee within Ubifrance, and the organiser is expected to utilise the funding to ameliorate the expenses of participants.

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Variable levels of funding for participation in trade fairs are also available depending on three criteria identified by Ubifrance. The first major consideration is the territory in which the action takes place. The highest level of funding is provided to six defined pilot territories, and an increased but slightly lower level is available for priority territories. These key territories are as follows:

Pilot territories Priority Territories China Germany India Japan Russia USA

Algeria Brazil Canada Czech Republic Hungary Israel Italy Malaysia Mexico Morocco The Netherlands Poland South Africa South Korea Taiwan Thailand Tunisia Turkey United Kingdom

Germany is included as a key ‘pilot’ territory because it is France’s major trading partner. Secondly, enhanced levels of funding are also available for companies offering products and services that fall within one of ten sectors identified by Sector Export Plans. These include: • Aerospace • Chemicals • Environmental technology • Food and agriculture • Healthcare products and services • Household equipment • Information and communication technologies • Leisure equipment • Legal services • Products for personal use (equipment de la personne)

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Finally, enhanced funding is available if the organizer of the group is approved by a ‘competitiveness cluster’, which is broadly defined as an association of companies, research organizations, and educational institutions cooperating for the purposes of innovation. Such clusters are recognised and approved by Ubifrance. The total aid available for any project is limited to 30% of the total operational expenses of the project, excluding the costs of the organiser and the travel and subsistence expenses of the companies participating. If the exhibition relates to an industry sector with a Sector Export Plan, or if it is organised on behalf of a competitiveness cluster, the limit for financial support is 50% of operational expenses, excluding the costs of the organiser. The following table provides a breakdown of funding levels for exhibitions meeting various Ubifrance criteria. Levels of funding support for international exhibitions Exhibition operating

under Sector Export Plan/ Competitiveness

Cluster

Other exhibitions

Pilot territory €3,000 €2,000 Priority territory €2,500 €1,500 Other territory €2,000 €1,000 Source: Ubifrance The labellisation programme is specifically intended for exhibitions or other activities taking place outside France. However, exhibitions within France may be eligible for funding providing the exhibition is ‘international’ in scope, related to one of the identified key export sectors, and the exhibition organizer undertakes to promote the event to larger number of foreign buyers than in previous years. Tax Credit for Expenses Related to Commercial Development This initiative is intended to provide an incentive for companies to recruit an individual dedicated to export development. During the 24 months after hiring such a person, companies may claim a tax credit on a range of activities related to export market development. One eligible activity is participation in international trade fairs, including the stand rental, cost of erecting and decorating the stand, and expenses of operating the stand. The programme is open to SMEs and to associations that are obliged to pay taxes and conform to the definition of SME themselves, have SMEs for members, and provide funds for export support on behalf of these SMEs. The credit is equivalent to 50% of the total of eligible expenses. If these expenses have already been subsidized at some level by another public agency, this financial support is deducted from the overall amount eligible for the tax credit before the 50%

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limit is applied. This tax credit can be obtained only once by any company. The ceiling on the tax credit is €40,000 for each company, or €80,000 for a tax-paying association. Insurance for Commercial Propecting This insurance indemnifies the company against the risk of specified commercial activities failing to achieve positive financial results in defined territories. A wide range of activities can be indemnified under this scheme, one of which is participation in international exhibitions. Reimbursable expenses include stand rental and decoration, transport costs for products to be exhibited, and promotion costs related to the trade fair. The scheme is both detailed and complex, but the essentials of the programme are as follows:

• The company insures its prospecting activities for a specified amount of money, over a defined time period (1 – 4 years), in a specified territory or geographical region.

• Every 12 months a balance is drawn up showing eligible business expenses against a percentage of receipts from the insured territory. If the account shows a debit balance the company is entitled to an indemnity equal to 65% of the deficit. In the pilot territories identified above (excluding Germany) the indemnity rises to 80%.

• During a further amortization period the company undertakes to reimburse indemnities received from a percentage of the receipts from the insured territories. If, at the end of the contract, the company has been unable to reimburse all indemnities due to insufficient turnover in the territory, these indemnities will remain with the company.

The scheme is limited to industrial, commercial, and service organisations with an annual turnover of no more than €150 million. Partenariat France The Partenariat programme is designed to encourage small and medium-size companies to benefit from the international business experience of larger, established organisations through undertaking joint activities or engaging in a mentoring relationship. The programme has the additional benefit of allowing SMEs to participate in export-focused activities at a reduced cost, or without charge. Under the auspices of the programme, an SME has the opportunity to partner with a larger company attending an international exhibition in order to make use of part of their exhibition space. In many cases there is no cost to the SME, but the larger partner is allowed to recover supplementary expenses incurred specifically in pursuance of the activities of the SME.

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Regional programmes Regional support in France for participation in international exhibitions is intended to supplement the wide-ranging national programmes available, while also allowing regional economic development bodies to address the specific needs of very small companies or important local industries. While these regional programmes can show extensive variation in their application, the following generalizations can be made about their overall structure:

• A number of regions provide organised collective participation at international exhibitions for companies based in the region.

• Financial support for international exhibitions available at the regional level may also form part of a more detailed, targeted programme that is intended to introduce small companies to export markets or to promote the export activities of key local industry sectors.

• While safeguards are in place to ensure that national and regional programmes do not substantially overlap in terms of direct financial support, regional support for participation in international exhibitions can still function concurrently with the Tax Credit programme and Insurance for Commercial Prospecting described above.

A selection of regional programmes is outlined below. Île-de-France: AREX-Salon AREX-Salon is aimed at SMEs with a turnover of less than €40 million. Financial support is provided for participation in international exhibitions, or exhibitions of an international character in France. Eligible expenses are limited to the costs of subscription, stand rental, and stand decoration, and these are subsidised at a level of 50% to a limit of €4,000 for international exhibitions and €2,500 for exhibitions in France. Company participation is limited to two exhibitions per year. Pays de la Loire: Prim’Export This programme is intended to aid new-to-export companies in the region with fewer than 20 employees. Eligibility for the programme is decided by a regional committee made up of representatives of regional economic development offices, national economic development bodies, chambers of commerce, and the Bank of France. A range of activities are covered including participation in an international trade fairs. The maximum aid available is 50% of the expenses of participation to a limit of €6,000. Companies can claim assistance under this programme once each year. Pays de la Loire: Collective missions The region also organises collective group participation in international trade fairs and missions. A regional programme is announced annually for all activities, and a subsidy is available for 50% of eligible expenses. For exhibitions, allowed expenses

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include travel and subsistence costs outside the EU, as well as costs of exhibition space, stand erection and decoration, and utilities. Poitou-Charentes: Extension of regional export capabilities (CORDEEX individual/collective) The CORDEEX programme for individual market participation is intended to support regional businesses in enhancing their international profile. A range of activities are covered under the programme, including participation in international exhibitions in foreign markets or exhibitions in France deemed to be international in character. The basic expenses, including rental of space, stand erection and decoration, and transport of products, are allocated a subsidy of 50%. Travel and subsistence expenses are covered at a level of €150 per day, with the possibility of receiving a higher travel subsidy for most costly locations. The ceiling for financial support for an international exhibition is €4,000. A company cannot claim support under this programme more than three times for one exhibition, country, or product/service offering. THE CORDEEX programme for collective activities operates to support the development through international trade of clusters in four priority sectors: food and agriculture, environmental technology, creative industries, and healthcare. The programme encourages cooperation within clusters, and available subsidies are applied to the allowable expenses of an entire group rather than provided to individual companies. Participation in international trade fairs is an allowable activity under this programme. 50% of group expenses are subsidised, with a ceiling of €10,000. This support cannot be used in conjunction with other programmes providing financial assistance for the same objectives. Rhône-Alpes: Programme for collective participation in exhibitions In cooperation with local partners such as Chambers of Commerce, the Rhône-Alpes region fixes an annual schedule of international exhibitions eligible to receive funding under the programme. Costs of participation covered by this support include rental of space, stand erection and decoration, transport costs for products exhibited and subsistence expenses for corporate staff. An initial application for funding will attract coverage of 50% of allowable expenses; a second application is limited to 30% of expenses. Participation is limited to SMEs, and companies cannot claim a subsidy more than twice for the same exhibition. Rhône-Alpes: New exporters’ programme The region also operates a subsidy programme for new exporters that have not previously received any public funding. This functions in two phases. Phase One assists the SME in defining an export strategy, and Phase Two provides funding for approved activities in foreign markets including participation in exhibitions. This programme offers funding of 50% of expenses to a limit of €5,000.

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Branding and regions Effective branding is an issue for both the state and individual companies. The French approach seeks to combine large and small companies under a national banner that not only feeds into promotion of the commercial sectors, but also gains from strong corporate brands that may exist within each group participating at international exhibitions. This cooperative approach extends through all four national funding programmes and right down to SMEs, who are catered for both nationally and within regional programmes. This identification of the French state with such a wide range of companies tends to reflect the national culture, but has the benefit of linking the success of the country to the success of its targeted industry sectors. The strong national branding serves to link both the regions and the exhibiting companies to create an entity and focus, but of course the success of such a strong brand is more dependent on the corporate performance involved, as perceived by global buyers, than simply on national preferences. Sources Direction régionale du commerce extérieur, Île de France Direction régionale du commerce extérieur, Pays de la Loire Direction régionale du commerce extérieur de Poitou-Charentes COFACE Ministry of Economy, Finance, and Industry Region Rhône-Alpes Ubifrance

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5. SPAIN Support for Spanish companies exhibiting at international trade fairs can be highly fragmented. Although the national exhibition support programme is comprehensive and offers comparatively high levels of grant funding, the Spanish regions generally have a high degree of autonomy and may be able and willing to provide economic support additional to that existing at the federal level. Local Chambers of Commerce may also offer financial incentives for participating in internationals trade shows. In effect, there are three possible levels of support for exhibitors, but they may not all be available to an individual company at any one time. At a national level, the programme of exhibition support displays the following characteristics.

• Financial support is provided on a percentage-of-cost basis, resulting in potentially much higher levels of support than in the UK

• National branding is heavily promoted on all types of nationally-funded pavilions

• Companies are vetted for participation in national pavilions, with prior market experience an important criterion for selection

National programmes Instituto Español de Comercio Exterior (ICEX) ICEX is a federal-level organisation that is part of the Ministry of Industry, Tourism, and Commerce. This body operates a variety of trade-promotion initiatives amongst which are official stands supporting the participation of Spanish companies in a range of international exhibitions. ICEX provides exhibition support to individual companies in two ways. Official pavilions This encompasses direct management of a Spanish group presence at identified international exhibitions. ICEX offers a key service that includes provision of exhibition space, building and dismantling the exhibition stand, stand decoration, travel expenses for staff, transport of goods to the exhibition, and promotional and marketing materials related to the event. Actual levels of support provided to individual companies are dependent on both the number of years ICEX has been organising an official pavilion at a specific fair and the geographic market in which the exhibition will take place. Funding to individual companies is provided on a percentage basis and varies from 30 to 75% of the abovementioned costs. Additionally, it is anticipated that ICEX’s organisational capabilities will result in both greater efficiency and economies of scale that will benefit participating companies both financially and in terms of professional presentation.

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Companies interested in participating in an exhibition as part of an official pavilion must apply to ICEX in the first instance. ICEX selects the companies authorised to participate according to defined criteria, including:

• Identification of the company with the sector served by the exhibition; • Suitability of the products or services to be exhibited; • Demonstration of appropriate product quality; • Commercial experience in the market(s) served by the exhibition.

In 2006 ICEX organised 77 official pavilions with 1,193 participating companies. Group participation ICEX also provides support to sectoral bodies organising a Spanish presence at an international trade fair. Exhibitors organised under the umbrella of a group participation are expected to represent a specific industry sector or sub sector, and to project a common image of Spanish-based expertise. Under this programme support is provided for the rental of exhibition space (including utilities), erection, dismantling, and decoration of the stand, and transport of products to be exhibited. With prior approval of ICEX it is also possible to obtain support for interpretation services, and promotional materials. These costs are supported on a percentage basis, which may be up to 70% of costs. Funding is also provided for travel costs outside the European Union (including flights, accommodation, visas, and other essential costs) for two persons from each company at a level set annually by ICEX, which may be up to 100%. In 2006 ICEX organised 366 group participation events with 2,796 participating companies. The Ministry of Industry, Tourism, and Commerce has identified nine key markets for which it has prepared Market Development Plans. These countries include Brazil, China, United States, Russia, Algeria, India, Morocco, Japan, Mexico. Although organised exhibition participation is not limited to these markets, there is clearly an effort to address them directly. For example, the 2007 exhibition programme includes participation in 59 trade fairs and exhibitions in China. Financial support is offered in only one manner for any given exhibition. For example, an official pavilion and a separate group participation will not be supported at the same exhibition. The principal requirement for participation in these schemes is that the company must offer a Spanish product or service. In practice most beneficiaries are SMEs, but in theory there is no obstacle to a large company participating in an ICEX-sponsored event.

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These programmes are supported by the FEDER fund, a European development fund aimed at promotion of businesses in regions qualifying for Objective 1 and 2 funding. It should be noted that financial assistance provided by ICEX under these programmes cannot be used in conjunction with other sources of funding for international exhibitions. Regional and other programmes Regional support for participation in international exhibitions is entirely dependent on the approach and priorities of each individual region of Spain. Since the regions are highly autonomous, there is no systematic method of providing this support across the regions. However, some useful generalisations can be made:

• Support for exhibiting at international trade fairs may be provided as part of a larger programme for export promotion that may include trade missions, individual market visits, market-specific promotional materials, intellectual property protection, or similar export-related issues;

• Support is generally provided as a percentage of the cost of an approved project up to a defined limit;

• Regions are able to produce their own economic development plans identifying industry sectors that the regional government believes are of particular importance to the locality, but support for exhibiting at international fairs is not necessarily limited to companies in these sectors.

• Support programmes are developed and often run for a limited time period which may be very short. This indicates a frequent turnover in the nature and levels of funding available for exhibition support at the regional level.

The following section describes some regional programmes providing for the support of companies exhibiting at international fairs. Andalucia: Support for international trade fairs Extenda, the Andalucian export promotion agency, organises the participation of Andalucian companies in international exhibitions in strategic sectors of the local economy, which include agricultural and food-related businesses and tourism. The programme is open to all companies based in the region, with no limits placed on company size or current degree of export participation. The objective of the programme is to increase exports in new markets and to show improvements in growth in markets in which Andalucian enterprises currently have some presence. The agency funds participation in exhibitions at a level of 50% of cost, including stand rental and decoration, operating expenses, transport of products, and travel expenses of one person.

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Asturias: Support for the international promotion of enterprises This export promotion programme is aimed at small and medium-sized industrial companies, including subcontractors, with their business headquarters located in Asturias. Support is provided for specialist consultancy services, certain investment activities, development of catalogues and websites specific to foreign markets, and exhibitor participation in international trade fairs. In general, the funded actions must be considered by the funding body within the Principado de Asturias to be technically, economically, and financially viable, and must have an overall cost in excess of €6,000. Exhibitor support is provided for both trade fairs in foreign markets and fairs in Spain that are approved as ‘international’ fairs by the Ministry of Industry, Tourism, and Commerce, the latter excluding fairs that are open to the general public. Funded expenses include:

• Stand rental • Construction of the exhibition stand • Hire of furniture and audiovisual equipment • Operational expenses including electricity, cleaning, and interpretation • Cost of transporting products to the exhibition

Financial support is limited to 50% of eligible expenses. For fairs outside Spain, travel expenses are covered for one person per company at the same rate offered at that time by ICEX. The time limit for presenting potential projects to be supported under this programme was 30 March – 28 April 2007. Catalonia: Support for companies for participation in fairs, festivals, and international projects This programme is specific to companies in the fields of visual, literary, musical, and multimedia arts either domiciled in Catalonia or from the European Economic Area with a permanent presence in Catalonia. The programme specifies a primary range of exhibitions (18 exhibitions worldwide), including the Frankfurt Book Fair, for which companies are eligible for 60% of costs to a total of €10,000. A selection of secondary exhibitions (23 exhibitions in Europe and North and South America) attract a subsidy of 50% of cost to a maximum of €8,000. Support is also available for other exhibitions at a level of 40% of cost to a maximum of €6,000. Castilla y León: Support for internationalisation of enterprises This programme provides support for both investment and promotion in foreign markets, as well as support for projects promoting a greater use of the Spanish language in other territories. The types of enterprises able to benefit from the programme include:

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• Manufacturing and extraction industries • Some service-related businesses • Tourist businesses, including hotels and travel agencies • Establishments specifically dedicated to the teaching and/or diffusion of the

Spanish language abroad. The programme covers a range of activities intended to promote the company itself or its products or services in a non-domestic market. These activities include participation in international exhibitions, preparation of promotional materials, protection of intellectual property, market visits, and translation services. International exhibitions qualifying for support may take place either abroad or within Spain. In the latter case, these must be exhibitions of an international character that have been approved as such by the Ministry of Industry. Support is provided for:

• Rental of exhibition space and payment of associated cost such as cleaning and utilities;

• Erection, dismantling, and decoration of the stand, limited to €100 per square meter;

• Costs of transporting products and samples to the exhibition; • Hiring personnel on-site to provide assistance at the stand.

The programme will pay up to 45% of permitted expenses, with a maximum limit of €100,000. Bursaries for travel expenses can also be provided separately at a level of €1,500 for countries within Europe and €2,500 for the rest of the world. Travel support forms part of the total €100,000 limit. Chambers of Commerce Chambers of Commerce may provide support for local companies wishing to exhibit at international trade fairs. In general, this support is tied to participation in conjunction with a group organised by the relevant Chamber, which has the aim of both improving the quality of corporate presentation at the exhibition and providing cost benefits to the companies through economies of scale in the rental of space and exhibition stands. The specific manner in which financial support is provided for this purpose can vary according to the local requirements of a specific Chamber of Commerce. In this context it is instructive to examine a specific programme promulgated by the Madrid Chamber of Commerce. The Support Programme for Exporting Companies provides assistance for market visits, visits to fairs and seminars, participation as an exhibitor at international fairs or seminars, foreign legal costs related to export business, and range of other activities to companies based in Madrid and member of the Chamber of Commerce. In terms of exhibitor participation in a trade fair held in an overseas market, companies are eligible for the following support:

• 50% of the cost of an airline ticket to a maximum of €1,500

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• 50% of the cost of exhibition space to a maximum of €2,500 • 50% of the cost of stand decoration to a maximum of €2,500 • 50% of the cost of transport of products to be exhibited to a maximum of

€1,500 • 50% of the cost of publicity in the fair’s official catalogue to a maximum of

€600 This support may not be used in conjunction with any other source of funding for the same exhibition. Companies are limited to a maximum of four Chamber-funded exhibitions in a single year. Support is provided to small and medium-sized companies on a preferential basis, but it is not necessarily strictly limited to SMEs. Branding and regions Spanish national branding provided ICEX is specific to those events in which the organisation provides direct support thus, particularly in its target territories, the brand is strong and well-maintained both in national pavilions and within sectoral umbrellas. However, the Spanish regions enjoy significant political autonomy, and this feeds through to presence at international exhibitions. They can be broadly equated with the UK devolved authorities such as the Scottish government. The regions focus on those sectors that are important within each, providing regional funding for presence at international as well as Spanish events. Sources Agencia Andaluza de Promoción Exterior (EXTENDA) Barcelona Chamber of Commerce Instituto Español de Comercio Exterior (ICEX) Junta de Castilla y León Madrid Chamber of Commerce Ministry of Industry, Tourism, and Commerce Principado de Asturias www.pymesonline.com

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6. GERMANY Given the strength and importance of the nation’s own exhibition industry, it is perhaps not surprising that the German approach to supporting companies participating in international exhibitions is comprehensive, carefully planned, and evinces a high degree of cooperation between government and industry stakeholders at national and regional level. The major elements of the national support programme in Germany are outlined below.

• Direct grants are not available at the national level • The approved programme of exhibitions is subject to significant forward

planning • Extensive consultation with stakeholders is a key element of the planning

process • Special programmes target emerging sectors • National branding is very strong

National programmes Federal support for participation in international exhibitions is provided through cooperation with industry, rather than by means of direct subsidies to companies. The national programme for exhibition participation is falls within the remit of both the Federal Ministry of Economics and Technology and the Federal Ministry of Food, Agriculture, and Consumer Protection. The organisation of trade fair participation is the responsibility of the Association of the German Trade Fair Industry (AUMA), which organises group participation for the annual exhibition programme. Support for participation in international exhibitions is provided principally through a national programme, as well as a further scheme targeted specifically at small and medium-sized enterprises based in the former East German Länder. Two additional programmes promote exhibition participation within the sustainable production and renewable energy sectors at a national level. National programme of exhibition participation On a nationwide basis, support for participation in international exhibitions in provided through a programme of official, collective participation in selected international trade fairs. Exhibitions to be supported as a part of this programme are identified each year through a committee of stakeholders including representatives of the two Ministries with oversight for the programme, AUMA, trade associations, Chambers of Commerce, diplomatic and commercial attaches based in foreign markets, and regional economic development associations.

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The stakeholders in the national exhibition programme meet twice annually to review applications from interested partners for the inclusion of specific exhibitions in the programme. This committee prioritises applications according to key geographic markets and, to some extent, key export industry sectors, and assembles a schedule of exhibitions that will form part of the national programme. The stakeholders commit resources to exhibition support well in advance; for example, as part of the ‘Germany in China 2007 -2010’ initiative, the committee has already identified several exhibitions that will be supported with national group participation in the years up to and including 2010. In 2007 the committee supported 262 exhibitions through the programme. For 2008 the programme includes 243 exhibitions, of which 62 are in China and Hong Kong, 41 in Russia, 33 in the Near and Middle East, and 24 in North America. In 2008 the budget for this national programme amounts to €36 million, but because this budget is dedicated to facilitating the organisation of group participation rather than providing direct grants to companies, it is not truly comparable to the UK budget. The most common form of organised participation is through group attendance at an international exhibition. No direct subsidy is provided to participants; German companies benefit from this type of participation through the cost efficiencies gained through collective participation in exhibitions and the professional organisation and marketing services provided by AUMA. They are expected to pay for their stand and its component services, and are also responsible for their travel arrangements and transport of goods to be exhibited. However, these additional expenses may also be ameliorated through collective arrangements made by the group organiser. Participation in the national programme is open to all companies based in Germany, or those manufacturing or selling products under a license from a German company. The programme also offers separate information stands at some smaller exhibitions, which allow companies to provide information and contact details without requiring the presence of either staff or products. For exhibitions for which no official group presence has been organised it is possible for industry associations to present a case for a small-scale group visit, which can in turn benefit from the organisational capabilities of AUMA. Programme of support for domestic/international exhibitions This programme is intended to support the export performance of SMEs based in East Berlin and the former East German Länder. Financial support is offered for participation in exhibitions of a national or international character taking place within Germany. As the programme does not provide funding for exhibitions outside Germany it is effectively outside the scope of this study; however, it is important in this context as an indication of the targeting and funding priorities for export development at a national level. Direct subsidies are provided on the basis of stand size, allowing €120 per square meter up to a limit of €4,500 per participating company and €130,000in total for any given exhibition. A company may participate in the programme up to three times each year. The programme is funded by the Federal Ministry of Economics and

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Technology, and administered by the Federal Office of Economics and Export Control, a department of the Ministry. Federal programme for sustainable agriculture This programme supports the promotion of organic and environmentally sound methods of agricultural production by means of providing a positive public image for German producers and industry at international and national exhibitions. The support scheme was conceived and funded by the Federal Ministry for Food, Agriculture, and Consumer Protection. Operation of the programme and disbursement of funds are carried out by the Federal Institute for Agriculture and Food, a department of the aforementioned Ministry. The support is aimed at organisations with an interest in promoting sustainable production methods as part of their wider marketing strategy, but it is limited to those enterprises or associations that are not involved in direct production. In conformance with EU regulations enterprises whose principal business is aquaculture, fisheries, or the direct production of agricultural products are not permitted to benefit from the programme. The programme is specifically focused on SMEs. To qualify for this programme, companies must undertake to provide technical information on their exhibition stands about the methods of sustainable production and the products derived from it, with the aim of better informing public opinion and promoting more widespread acceptance of products from sustainable sources. Companies or organisations may receive financial support for either an individual stand at an exhibition or for a group participation. Subsidies are provided at the following levels:

• Registration and stand rental at a rate of €2,400 for individual companies and €12,000 in total for a group of companies;

• Rental, construction, and utilities at a rate of €5,000 for individual companies and €25,000 in total for a group of companies;

• Preparation of information and promotional materials at a rate of €500 for individual companies and €2,000 in total for a group of companies.

The support can cover a maximum of 80% of the eligible expenses, which must exceed €2,000 to qualify for subsidy. Export Initiative for Renewable Energy The German Energy Agency operates a programme focused on the promotion of German companies and technology in the renewable energy sector, with the objective of enhancing networking opportunities with foreign buyers and investors. The programme contains several components designed to assist international marketing, of which one is participation in international exhibitions. For the purposes of participation in exhibitions, the scheme essentially operates through the German national exhibition programme described above. Interested

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organisations are offered the opportunity to participate in an appropriate exhibition at national level. Once again, subsidies are not given directly to the companies, but support is effectively provided through the cost savings derived from large-scale purchase and organisation of exhibition space. Regional programmes Financial support for participation in international exhibitions is focused at the state level. Each German state operates its own programme of exhibition support, and these are highly variable in structure, levels of funding, and size of company permitted to benefit from the programme. The länder annually agree regionally-specific programmes of international exhibitions with AUMA, and these are intended to operate in tandem with the national programme. Regional support for international exhibitions in Germany demonstrates the following characteristics.

• Funding is generally made available by the Ministry of Economic Affairs equivalent in each region, with the organisation and management of international exhibition programmes and the administration of financial support provided by a regional enterprise organisation.

• Financial support is usually offered as a percentage of costs, limited by a maximum grant which may nevertheless be quite high

• Specifics of funding programmes may vary significantly from one state to another

• National branding is generally adopted at regional level to strengthen the presence and improve recognition

To provide an indication of the forms and levels of financial support available at the regional level, a selection of regional exhibition support programmes is outlined below. Baden-Württemberg The enterprise agency responsible for international economic development is Baden-Württemberg International, which manages and administers the funding for the collective trade fair participation in the region. The programme is aimed at SMEs, with eligibility for funding varying according to company size: for exhibitions in the EU, Iceland, Norway, and Switzerland maximum company size is €5 million annual turnover and fewer than 250 employees, and for exhibitions outside this area maximum company size is set at a turnover of €30 million per annum with fewer than 250 employees. Available subsidies are set at 50% of the cost of the exhibition space, and the cost of stand rental is reimbursed at a level estimated to be 25% of the total cost of the exhibition space. In cases where the agency has supplied complete stands to participants, the subsidy is a simple 50% of the cost. Additional expenses such as transport of products, preparation of promotional materials, and travel expenses are

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not covered. Support is limited to €3,000 per exhibition in the EU, Iceland, Norway, and Switzerland, and €6,000 in the rest of the world. Total subsidy expenditure for a single exhibition is limited to €30,000. Collective participation in an exhibition requires a minimum of three companies attending a single fair. Companies are entitled to one subsidised exhibition each calendar year, with a total limit of five subsidised exhibitions. Bayern The Bavarian Trade Fair Participation Programme is aimed at SMEs exhibiting at international trade fairs. The programme is funded by the Bavarian Ministry of Economic Affairs and administered by Bayern International, an enterprise created by the Ministry to organise export support services to SMEs in cooperation with local chambers of commerce and trade associations. Each year Bayern International publishes a list of approved exhibitions at which the organisation will contract space on behalf of participants. Participating companies pay a single fee for rental of exhibition space, a complete stand with utilities, and insurance. In certain circumstances there may also be an allowance for the cost of transporting products to the exhibition. Financial support for participation is variable, and is deemed to depend on the overall public interest and the importance of the exhibition to the competitiveness of firms in consideration of the cost and the expected benefits of participation. The level of subsidy provided depends on the distance to the exhibition, the level of difficulty in accessing the market or other problems relating to exporting to the territory, the significance of the event to the export market, or other criteria as determined by the committee responsible for exhibition participation. Subsidies can be provided either as a subsidy to an independent organiser of a group of companies, or as support for participation in a group organised by Bayer International. Berlin-Brandenburg Funds for international exhibition support are provided partly by the regional government of Berlin and partly by the European Fund for Regional Development. The funds are administered by Berlin Partner GmbH, the enterprise company responsible for export development in the region. Companies eligible to benefit from the support programmes available are those headquartered in Berlin-Brandenburg with fewer than 500 employees and an annual turnover of not more than €80 million or balance sheet assets of not more than €54 million. Additionally, to receive exhibition funding companies must belong to one of five targeted sectors: biotechnology, medical technology, information and communication technology, optical technology, and traffic control technologies.

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The regional enterprise agency organises group participation in international exhibitions by offering both a total exhibition package that is supplied at a favourable rate and a subsidy for a portion of the cost. Participants receive a service that includes rental of exhibition space and the stand, transport of products, and stand management services, and are eligible for a subsidy of 50% of the total cost up to €100,000. Companies can receive support under this programme no more than twice in one calendar year. If group participation is not organised for a specified exhibition, it is possible for an individual company to present a case for a one-off subsidy. Support is available at a level of 50% of total cost to a limit of €5,000 for exhibitions in Europe and €7,500 for exhibitions outside Europe. Hessen Support for international exhibitions in Hessen is aimed at SMEs with an annual turnover of less than €75 million. The region offers support for collective participation under a regional banner, and for individual company participation in exhibitions. Subsidised group participation requires at least three companies to attend an exhibition. Financial support is provided for exhibition space, stand rental and erection, return transport of unsold items, insurance for the stand and exhibited products, utilities, and local personnel for manning the stand. Funding is available at a level of 50% to a maximum of €5,000. Subsidies can be provided for individual participation in international exhibitions. To qualify companies must be a member in good standing of the local Chamber of Commerce. Nordrhein-Westfalen The NRW subsidy programme for international exhibitions is focused on SMEs located in the region. Although the principal aim of the programme is to aid participation in overseas markets, exhibitions of an international character in Germany are also eligible for funding. Subsides are offered for collective participation under the NRW ‘brand’, or they can be provided for a small group of companies organising its own presence at an exhibition. For NRW collective participation, the NRW-International enterprise agency organises the local group and books exhibition space at an advantageous price. Levels of support for individual companies are assessed according to the number of times a company has participated in exhibitions through the programme, and by company turnover. For the first through the third subsidized events, companies can claim support for stand rental and construction costs. The fourth and fifth events allow a claim for stand rental. Participation in six or more events allows the company to pay for stand rental and construction at the cost at which it is available to the agency.

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Companies with an annual turnover of less than €50 million are eligible for subsidy at a rate of 50%; those with an annual turnover greater than €50 million are subsidized at a rate of 25%. Companies participating collectively are also eligible for free representation on the NRW ‘Info-Point’ that provides a vehicle for promoting the industry sector relevant to the exhibition. The Small Group Programme allows a collective of at least three companies to claim a subsidy upon organising their own exhibition presence. Limits on company size specify that participants must not have a turnover greater than €10 million for exhibitions in EU and EFTA countries, or €50 million for those held in the rest of the world. Subsidies are available at 50% of allowable costs, up to a limit of €5,000 per company. Subsidised costs include exhibition space, stand rental and erection, furnishings, services such as translation, and return of products remaining unsold at the end of the exhibition. Branding and regions The ‘Made in Germany’ brand is strong and well-known globally, and it is actively applied on the pavilions that are organised at the national level. Companies of all sizes participate under this umbrella, with large companies lending their own strength and reputation in support of the brand and SMEs benefiting from the positive effects of this representation. The national brand is also deployed to raise the profile and status of new industry sectors in Germany. The support programme aimed at the renewable energy industry provides no direct financial aid, but companies are expected to benefit from organised participation in international exhibitions under the ‘Made in Germany’ brand. National branding can also be an important part of exhibition participation at the state level. Although some states such as Bavaria have a regional brand presence that may be compared to that of Scotland within the UK, most states do not have a sufficiently high international profile to make a regional brand truly competitive. For this reason, regional pavilions very often make use of the ‘Made in Germany’ brand to support their own presence, even though the group participating in the exhibition may be operating under a regional brand at the same time. Sources Austellungs- und Messe-Ausschuss der Deutschen Wirtschaft e.V. (AUMA) Baden-Württemberg International Bayern International Bundesamt für Wirtschaft und Ausfuhrkontrolle BAFA (Federal Office of Economics and Export Control) Bundesanstalt für Landwirtschaft und Ernährung (Federal Institute for Agriculture and Food) Bundesministerium für Ernährung, Landwirtschaft und Verbraucherschutz (Federal Ministry for Food, Agriculture, and Consumer Protection) Bundesministerium für Wirtschaft und Technologie

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Deutsche Energie-Agentur GmbH Hessischen Ministeriums für Wirtschaft, Verkehr und Landesentwicklung Ministerium für Wirtschaft, Mittelstand, und Energie Nordrhein-Westfalen Senatsverwaltung für Wirtschaft, Arbeit und Frauen Berlin-Brandenburg

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7. ITALY Financial support to Italian companies for participating in international exhibitions is rarely provided in a systematic way. The national programme provides only soft support while, in practice, available regional and local subsidies are highly dependent on the location of the company, its access to and participation in local or regional business networks, and the manner in which available funding streams work through to the level of individual companies. The national programme of exhibition support demonstrates these key feature.

• Direct grants are not available at the national level • Targeting focuses on key export markets • National branding is currently being strengthened

National programmes Instituto Nazionale per il Commercio Estero (ICE) The Instituto Nazionale per il Commercio Estero (ICE) is the national body with the remit for providing assistance to Italian companies in foreign markets. ICE is a department of the Ministry of Foreign Trade, which appoints the board of directors of the organization. The board in turn appoints internal committees tasked with identifying priority export markets. For each market a further committee identifies key Italian industry sectors with export opportunities in that market, and also compiles a list of exhibitions at which an official Italian presence will be promoted. ICE subsequently purchases space at the exhibitions on the official calendar, part of which it retains for itself and the remainder of which is sold to private exhibitors, consortia of exhibitors, or other organised bodies such as chambers of commerce. No financial assistance is provided by ICE, and the cost of participation through this service is reported to be no more cost-effective than a stand organised by an individual participant. The advantage to companies is, in effect, the fact that a turnkey exhibition service is provided for a single fee. However, it is possible for ICE to subsidise exhibition participation in new markets to encourage market entry by Italian companies. This subsidy, if available, would be most likely to come in the form of a less expensive exhibition package rather than a direct grant to companies. Regional and other programmes Like many other forms of company support in Italy, grants for participation in international exhibitions are offered primarily on a regional or local basis. However, the availability of support is highly uneven across the country, with some regions such

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as Lombardy offering a structured and transparent subsidy system, while other regions have no discernable provisions for providing any exhibition-related support. The same is true at a local level, with some chambers of commerce being very active in the organisation and funding of exhibition participation and others having no involvement in exhibition support. Italian Chambers of Commerce are funded through a mixture of national and regional funding and member subscriptions, and function as powerful advocates for the interests of Italian business and industry. Chambers of Commerce are key providers of support for participation in international exhibitions, either as partners with regional government agencies or as independent export promotion agencies. The observations below outline key points of Italian regional and local support schemes.

• Levels of regional and/or local support are highly variable depending on location

• Available grant funding is generally higher than that offered in the UK • Programmes are mainly responsive to local requirements for economic

development • National branding is not always adopted at the regional or local level

The following section identifies a selection of existing programmes for company support and outlines their characteristics. Lombardy Region/Lombardia Chamber of Commerce: Voucher Scheme The Lombardy region operates the most systematic programme for exhibition support available in Italy. This programme is jointly operated by the Lombardy region and the regional chamber of commerce system, both of which participate in its funding. The voucher programme requires individual companies to apply for vouchers granting financial support for specified forms of trade fair participation, but the companies must exhibit as part of a larger, organised group. The scheme is split into two segments, one dealing with trade missions (Type D) and the other with support for participation in international exhibitions in both Italy and foreign markets (Type A). The Type A exhibition vouchers are subdivided into two classes:

• Voucher A1 for collective fair participation organised by the chamber of commerce system, referring to an individual stand within an area showcasing the Lombardy region;

• Voucher A2 for single-group participation, referring to groups organised by individual chambers of commerce, trade association, export groups, or consortia of companies with a common sectoral interest.

The Voucher A1 provides financial support for the cost of the stand rental and fitting-out in the area allocated to the Lombardy region. The subsidy may also be applied to

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activities or services intended to maximize the impact of trade fair participation, such as interpretation services or marketing communications in the local language. Individual companies must also agree to adhere to the coordinated promotional image of the region when placing materials on their own stands. The available subsidy is €5,000, and at least ten companies must apply for vouchers for a collective fair participation in order for funding to be provided. The Voucher A2 provides support only for the cost of the stand and its fittings. The available subsidy is €2,500. Lombardy is unique in providing a clear definition of the resources available for the programme and the way they are to be divided between the various modes of participation. A breakdown of funding for the exhibition support scheme is shown below.

Activity Budget 2007 Voucher A1 – collective participation €2,890,000 Voucher A2 – single-group participation organised by a Chamber of Commerce

€1,500,00

Voucher A2 – single-group participation organised by an industry association

€2,000,000

Total €6,390,000 However, the Region and Chamber system specify that they reserve the right to refinance the scheme, shift resources from one part of the programme to another, or to integrate the entire programme into a single type of voucher as may be required by circumstances. The scheme is open to SMEs based in, and operating in, the Lombardy region. Companies may access up to four vouchers per annum, with no more than one voucher available per exhibition. Autonomous Region of Sardinia Through its development agency, the Consorzio Ventuno, the region of Sardinia provides financial support for export-related initiatives encompassing a wide range of activities, including participation in exhibitions. For the financial 2006-07 the budget for this programme was set at €2,900,000. Export support is directed to SMEs only, although applications for support from consortia or temporary associations of companies at the SME level may also be considered. In order to access this assistance companies are expected to present a plan of activity intended to open a new export market, or to consolidate their position in an existing market. The export plan put forward by a company for consideration is likely to include a range of related activities, of which exhibition participation may form a part. Each plan is assessed on the basis of a ‘points’ system measuring the likely impact of

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the initiative on a range of corporate and regional indicators, including whether or not the plan addresses the region’s priority markets (China, United States, Japan, Canada, India, Algeria, Morocco, Russia, United Kingdom, Ireland, Spain, Germany, Belgium, the Netherlands, Portugal, France, and Saudi Arabia). The export programme offers comprehensive assistance for activities relating to the preparation for, participation in, and follow-up after a selected exhibition. These include pre-exhibition promotion to potential visitors, the hire of the exhibition space, rental and fitting of the stand itself, payment of utility costs on-stand, transport costs of products to be exhibited, travel costs for one person attended the exhibition, assistance required during the fair such as interpretation or technical services, and active follow-through of contacts made during the exhibition. Financial support offered through this programme can be substantial. Subsidies are provided at a level of 50% of the total cost of the export initiative presented by the company. The regional contribution to the initiative must be at least €25,000, but may not be greater than €300,000. The financial support for separate components of an export project is awarded according to the turnover of the participating company; the exhibition-related component is outlined in the table below. Subsidy for participation in an international exhibition, Autonomous Region of Sardinia

Company turnover Maximum level of subsidy Less than €0.5million €10,000 €0.5 million to €1.5 million €16,000 €1.5 million to €2.5 million €26,000 More than €2.5 million €40,000 This support is available only for a company’s initial participation at a specific exhibition. As a means of monitoring the exhibition-related component of the programme, the Consorzio Ventuno requires participating companies to provide details of their activities at the exhibition, as well as outcomes of follow-up activity. Bologna Chamber of Commerce: Participation in international trade fairs The Chamber of Commerce of Bologna offers an incentive scheme for participation in international exhibitions as a means of gaining greater access to global markets. The programme is open to SMEs located in the province of Bologna, and current in the payment of dues to the local Chamber. The subsidy is applicable to the full range of exhibition-related expenses, including rental and fitting of the stand, connection and use of utilities, travel and lodging expenses for two persons, transport of products to be exhibited, and interpretation and translation services related to the exhibition.

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In order to qualify for a contribution the allowable expenses of a given company must be at least €2,000. The maximum contribution available from the Chamber is €7,500, calculated as follows:

• 50% of expenses up to and including €5,000 • 40% of expenses over €5,000 up to €10,000 • 30% of expenses over €10,000 up to €15,000 • 20% of expenses over €15,000 up to €20,000 • 10% of expenses over €20,000 up to €25,000 • Expenses over €25,000 attract no further subsidy

In accessing available funding, priority is given to companies attending an exhibition for the first time. Ferrara Chamber of Commerce: Projects for the internationalisation of enterprises The Chamber of Commerce of Ferrara offers financial support for participation in international exhibitions, or Italian exhibitions of an international character, as a component part of a coordinated programme of at least three distinct activities intended to facilitate penetration of a foreign market. Beneficiaries of the programme must be SMEs based in Ferrara and members of the Chamber. Companies applying to the Chamber for subsidy must present a project with admissible costs equal to or in excess of €10,000. The contribution of the Chamber is assessed according to the following criteria.

Type of project Level of subsidy Projects:

• In territories for which the company has already received Chamber funding in the previous two years

• Including participation in an international exhibition in Italy

€3,000

Project in a new territory in which the company has, with the previous two years, received no Chamber funding

€4,000

Project in a priority territory of the Ferrara Chamber of Commerce

€6,000

Priority territories include India, China, USA, Russia, Morocco, Tunisia, Egypt, and Japan. The level of contribution by the Chamber may not exceed 50% of the total project expenses. Companies may apply for support once each calendar year. Venice Chamber of Commerce: Participation in international trade fairs

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The Venice Chamber of Commerce operates a financial support scheme for its members participating in trade missions or foreign exhibitions organised by the Export Centre of the Veneto Regional Chamber of Commerce system or by other export consortia or industry associations in the province of Venezia. The initiative applies to SMEs based in the province and who have paid their annual subscription to the local Chamber. Subsidies are available for attending exhibitions in non-EU countries (excluding Switzerland and Norway), or in the nations that joined the EU in 2004 and 2007. Support is offered for the hire of a ‘standard’ exhibition space of a maximum of 12 m2; for the first participation a subsidy of 50% of the cost is available to a maximum of €2,000, and for the second and third participations a contribution of 35% of the cost can be made to a maximum of €1,500. This financial support may not be used in conjunction with funding from other sources. If the exhibition participation is organised by an association or consortium at the provincial level, and attracts at least five companies, at least three of which must be based in the province of Venezia, a contribution is offered towards the travel costs of a representative of the association. This contribution is set at €800, which must represent no more than 50% of the cost of economy travel to and from the destination. Branding and regions ICE makes use of the ‘Made in Italy’ brand to promote the national presence at international exhibitions. In common with both Spain and Germany, both large and small companies are represented under this banner, which functions as a comprehensive forum for the presentation of Italian industry. In September 2007, Minister for International Commerce Emma Bonino noted that the ‘Made in Italy’ initiative had helped to increase Italian exports by 8.9% over the previous year. Although a direct and exclusive link between national branding and export success is extremely difficult to establish, it is clear that the Italian government is confident that the brand has contributed substantially to improved export performance. This is further evidenced by their reaction to the approach to branding within the regions. Use of the national brand is reported to be sporadic at the regional or local level, with some regions or Chambers of Commerce identifying themselves under an Italian flag in some instances and others focusing principally on their own identity. This has led Emma Bonino to call for a greater degree of coordination between national and regional agencies to promote a national identity capable of benefiting the full range of Italian companies in key sectors. Bonino has also observed that regional promotion could be scaled back in the interest of developing a stronger and more pervasive national brand, but this suggestion has not been welcomed by the highly individualistic regional development bodies.

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Sources Assesorato dell’Industria, Regione Autonoma della Sardegna Camera di Commercio Ferrara Camera di Commercio Industria, Artigianato ed Agricoltura Bologna Camera di Commercio Industria, Artigianato ed Agricoltura Venezia Instituto Nazionale per il Commercio Estero (ICE) Ministerio del Commercio Internationale Regione Lombardia Regione Puglia, Assessorato alo Sviluppo Economico e Innovazione Technologica Union Camere Lombardia

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8. TURKEY Turkey offers comparatively high levels of support to companies participating in international exhibitions. However, levels of funding for this purpose have been reduced in recent years. Two to three years ago, financial support for international trade fairs was provided at a level of approximately 75 – 80% of exhibition costs, which has now been reduced significantly to 50%. Although Turkey is not currently required to adhere to EU regulatory systems, there are signs that the country is preparing for EU entry by bringing its state support regime more closely into line with EU practices. For example, the definition of an SME has recently been standardised to conform to the EU definition, while the levels of exhibition funding as described above have been brought down to a level more compatible with those in Spain. It appears that the difference made by EU membership to the Turkish funding regime would primarily be a limitation on the grants available to individual companies through de minimis aid restrictions, rather than a wholesale revamp of the funding system itself. Key points relating to the Turkish system of exhibition support are identified below.

• Competitive pressure from Turkey derives mainly from a relatively high level of funding, which is among the highest of the six competitor nations, rather than from anomalous or aggressive methods of providing aid

• Exhibition support is provided at the national level; no regional support is offered to Turkish companies

• Special support offered to Sectoral Foreign Trade Companies responds to a specific domestic problem of very small and inexperienced enterprises, but does not offer a practical template for UK support in this area

National Programmes Ministry of Industry and Trade National Programme The Ministry of Industry and Trade (DTM) is ultimately responsible for the financial support provided to industry in Turkey. Funding is channelled through the Undersecretariat for Foreign Trade (IGEME), which provides financial incentives for participation in international exhibitions. There are two ways in which Turkish companies may take advantage of the central government support scheme. The first is through a group participation organised on behalf of Turkish companies. The DTM annually announces a list of authorised exhibition organisers, which may be private sector companies, industry associations, or exporters’ unions. The organiser for a specific exhibition is responsible for both attracting companies to the group and for purchasing and arranging the exhibition space on the participants’ behalf. For an ordinary collective participation, companies are subsidised at a level of 50% of exhibition costs.

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Subsidies are also available for individual participation in international exhibitions. Each year the DTM announces a list of exhibitions to be officially supported, and provided an official organiser has not already arranged group participation in an approved trade fair, individual companies may apply for financial support at a level of 50% of costs. In 2007 the DTM listed 240 international exhibitions as approved for official participation. These exhibitions related primarily to Turkey’s key export sectors, which include textiles and ready-to-wear apparel, leather products, food products and packaging, jewellery, construction technologies, and industrial products, including machine tools, process machinery, and automotive components. All Turkish companies are eligible to benefit from these support programmes. No distinction is made between SMEs and large companies in providing assistance for international exhibitions. Sectoral Foreign Trade Companies – Special Support Extra support is provided to organisations know as Sectoral Foreign Trade Companies (SFTC). These organisations are special legal entities intended to aid export promotion by encouraging very small companies to band together to form a joint company with enhanced resources and capabilities. The requirements for SFTC status are as follows:

• Participating companies must all belong to the same industry sector • At least ten partner companies must participate • The partner companies must have a total of no more than 200 staff • No single company may hold more than 10% of share capital • The scheme requires initial capital of at least £4,000

In developing regions of Turkey, participation requirements are reduced to five partner companies holding no more than 20% of share capital, with an initial investment of at least £2,000. 31 SFTCs are currently active in Turkey. For an SFTC, up to 75% of participation costs can be covered. Branding and regions As regional support for international exhibitions is not available in Turkey, questions of national versus regional branding do not arise. IGEME and its exhibition organisers do make use of a Turkish national brand, which may be considered strong in some sectors, such as agriculture and food, or in some regions of the world, such as the Near and Middle East. It is evident from discussions with trade associations that the Turkish government is interested in building a national brand in some high-tech sectors including engineering and information and communication technology, but at present neither

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the sectors nor the national brand are strong enough globally to either support or feed off one another. However, the Turks are also taking steps to promote a national business and industry profile in at least two key territories, Germany and the Netherlands, where the immigrant Turkish community provides a basis for improving overall awareness of national capabilities. Although this is not exclusively an exhibition-related issue, it is indicative of the importance of national branding within the wider field of export promotion. Sources Invest in Turkey Istanbul Exporters’ Union KOSGEB Machine Tool Industrials & Businessman’s Association Undersecretariat for Foreign Trade

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9. CHINA Financial support to Chinese companies for participation in international exhibitions is available principally at the national level. However, as the country develops a more coherent market economy, programmes of export support for Chinese businesses are continuously evolving depending on the changing priorities of central or local government. At present, support for participation in international exhibitions does not appear to form a major element of the national strategy for trade development. The key points of exhibition support in China are as follows.

• Funding for international exhibition participation is comparative low • Companies must have proven export experience to qualify for participation in

the national scheme • Regional support may be available in specific instances

National programmes Ministry of Commerce Exhibition Programme The national programme of participation in international exhibitions is developed by the Ministry of Commerce. The SME office of the Ministry annually reviews a list of international exhibitions and shortlists and prioritises key events, and this list is subsequently made available for exhibition companies to select an exhibition for formal approval for national group participation. Additionally, exhibitions specified as part of a bilateral agreement are prioritised and funded separately by the Ministry. The Ministry’s prioritisation of international exhibitions does not exclusively limit participation to specific industry sectors. However, the Ministry does target exhibitions in key export sectors, including toys, household goods, textiles, electrical and electronic goods, and information and communication technology. High-tech sectors, or industry sectors with an identified potential to significantly increase export volumes, may be offered additional support by central or local government. Funding for participation in exhibitions in international markets is also provided by the Ministry of Commerce, which has an overall budget for supporting SMEs in accessing foreign markets. This budget covers a range of export-oriented activities including exhibitions, trade missions, market studies, and foreign-language promotional materials; the allocation of money to each activity is dependent to some extent on demand from companies. The funding is administered through authorized import/export corporations or exhibition organisers. These national import-export companies were originally state-owned enterprises which may still be government-owned or alternatively privatised to some extent. As the market economy developed, these organisations were originally authorised to lead groups of companies to international exhibitions. Their functions are now supplemented by small private exhibition companies, who must first work

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with and obtain references from an existing import/export corporation before becoming qualified by the Ministry of Commerce to lead exhibition groups in their own right. Each company authorised to lead groups to international exhibitions is allocated a budget each year. These vary between companies depending on an organisation’s qualifications, its previous track record in organising participation, and the priority given to selected exhibitions. The authorised companies are permitted to choose one or more exhibitions from the Ministry of Commerce’s prioritised list, and may apply to the Ministry for formal approval of participation provided they are able to attract at least ten participating companies to the exhibition. Financial support is provided to companies through the domestic exhibition organiser, who disburses the subsidy upon receiving proof of payment to the organiser of the foreign exhibition. Funding for each participant is £1,000 for each exhibition, and companies can receive assistance under the scheme no more than five times. Financial support is in theory available only to SMEs who are able to demonstrate a level of current export business equating to £750,000 annually. This in effect functions as a test of the capability and viability of the company in export markets and ensures that funds are targeted to those enterprises that can make practical use of exhibition opportunities. Despite the fact that this support is aimed primarily at SMEs in the European sense of the term, large companies may in practice make use of the programme as the Chinese government provides no clear definition of an SME. Regional and other programmes At the regional level, it is possible that local government bodies within China may have some money available for supporting participation in international exhibitions in the form of special programmes intended to aid industry sectors of local importance. However, there have been no systematic programmes of support at this level for approximately the past four to five years. Branding and regions The Ministry of Commerce makes use of a Chinese national identity at international exhibitions. Regional branding may exist on those occasions where local government has provided support to a group of companies, but the current overall weakness of a ‘Made in China’ brand capable of promoting quality or style on a globally competitive basis means that the issue has not become yet critical. Sources China Council for the Promotion of International Trade Ministry of Commerce Machine Tool Technologies Association (China Office)

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10. COMPARATIVE ANALYSIS Comparisons by value Without doubt, the UK is ranked at the low end of national subsidy providers for exhibitors at international exhibitions. These calculations are based on the use of actual expenses incurred by a UK company intending to exhibit at a major engineering exhibition in India, and compare the maximum subsidy likely to be available for the company from each of the six countries included in this study, as well as the UK. This allowed us to cross-compare subsidies offered on a percentage basis with those offered in currency and to determine their likely effect within the actual example used. The total stand expenses incurred amounted to £11,500, equating to 30% of the total costs involved in exhibiting which includes product freighting outbound and return, carnet expenses and travel/accommodation costs for two personnel. The benefit in using this higher-value, longer distance example is that it helps to clarify the very real differences between the various national offerings, whereas a lower-value example would tend to compress the variations. Exchange rates used for this exercise were: £1 = € 1.47 £1 = RMB 15.0 Tables 1 and 2 show the results of this comparison taking a sample of regions in each territory. It is evident that, apart from China, which has a distinctive approach to this type of programme, the UK comes lowest (16%) in the scale of exhibition support with Italy’s Sardinia region reaching 100% at maximum. The French national “Label France” scheme provides comparable subsidies to the UK but the key difference lies in the regional offerings. Of the UK regions only Yorkshire Forward offers a dedicated exhibition support programme separately from the national TAP scheme, whereas France, Spain, Germany and Italy essentially rely on their regions to maximise company support. It is also worth noting that all the European territories provide subsidy for the same or a greater number of international events as the UK TAP programme and are therefore operating at significantly higher levels of budget or actual disbursement. Outcomes of this largesse appear to be focused more on the broad growth of exports in each supported sector than on gains in specific events.

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Table 1. Comparative data by percentage of expenses provided

0102030405060708090

100

UK Fra Spa Ger Ita Tur Chi

Source of subsidy per country Bar 1 – national subsidy (no national subsidy in Germany or Italy) Bars 2 to 5 – regional subsidy from up to 4 regions per country (no regional subsidy in Turkey or China)

Percentage subsidy for exhibition stand expenses

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Table 2. Comparative data calculated by value

0

2000

4000

6000

8000

10000

12000

UK Fra Spa Ger Ita Tur Chi

Subsidy value for exhibition stand expenses £

Source of subsidy per country Bar 1 – national subsidy (no subsidy in Germany or Italy Bars 2 to 5 – regional subsidy from up to 4 regions per country (no regional subsidy in Turkey or China)

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Methods of funding Hierarchies of funding are broadly similar across the territories. Central government departments make budget allocations, set priorities, and define participation criteria for exhibition-related programmes or similar services offered at a national level. Arrangements for group participation in exhibitions are frequently undertaken by third parties such as trade associations, chambers of commerce, or specialist exhibition organisers who provide organisational assistance and advice to participating companies. Several of the territories studied show a pattern of more active regional assistance for participation in international exhibitions. In particular, the four European competitor nations each have some level of active and well-defined regional and/or local support for international exhibitions. However, with the exception of Germany, where each state offers some type of financial support for exhibitions, Italy, Spain, and France show an uneven pattern of support, with some regions or local bodies such as Chambers of Commerce providing significant levels of funding and others offering no support. In each case, regional and local support functions as an adjunct to the national programme, and it is often used to pursue regional objectives for economic development supplementary to those prioritised at a national level. In Turkey and China there are no regular programmes of regional support for exhibition participation, although in China it is suggested that funding for such a purpose could be made available on an ad-hoc basis. Levels and types of support It is more common for financial support to be provided on a percentage basis with, in some cases, a ceiling for financial assistance. Targeted financial support Targeting of financial support for exhibitions is in general responsive to the national or regional imperatives for export and/or economic development. The most important means of targeting financial support is the prioritisation of exhibitions at a national level. Each of the six competitor nations has a system of identifying key events and planning a programme of supported participation well in advance of the exhibitions taking place. This planning process is often undertaken in cooperation with industry stakeholders and other interested parties in order to define a programme that fulfils national objectives for trade development in particular territories or industry sectors while addressing at least some of the requirements of secondary sectors. There is some flexibility built into these exhibition programmes to take account of changing industry interests and requirements, but they tend to exhibit a greater degree of forward planning than the UK.

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In order to prioritise specific international exhibitions it is naturally necessary to identify the trade-related objectives that the exhibitions are intended to support, and industry sector prioritisation is a major element of this. Germany has specifically prioritised two sectors, sustainable production and renewable energy, either through direct grants or national support for key exhibitions. Targeting exhibitions by country is most important in key developing economies such as China, Russia, Brazil, and India, where participating companies can access a large potential customer base that may not readily travel to other exhibitions. Targeting by country has limitations in that many key exhibitions take place in developed markets such as Germany or the US, and it is considered desirable to provide some level of support for a national presence at these events. Within the four European competitors there is an effort to support participation in domestic exhibitions with an ‘international’ focus, which is defined as an exhibition with a preponderance of foreign visitors. The UK approach of focusing financial support principally on new to export businesses is unique amongst the seven countries studied for this report. By contrast, other countries are more likely to target at least a proportion of exhibition support on experienced exporters who have a track record of successful export performance and demonstrable market experience. In both China and Spain, evidence of previous export or market experience is a key criterion in gaining access to the national exhibition programme. Branding and regions In the four European competitor nations studied, national branding and promotion forms a key element of the national programme for exhibition participation, and this philosophy of branding is often applied at regional level as well. These countries regard exhibitions as an opportunity to promote a national image of professionalism and technical capability to the wider world. For this reason, participation in national exhibition programmes encompasses both large and small companies, which provides an impressive and comprehensive representation of the national sector, and additionally offers smaller companies opportunities to learn from, and network with, their larger and more experienced counterparts. Outside Germany, the philosophical commitment to national branding is strong, its provision is often patchy. National and regional agendas often differ with regional participation focused on local economic development objectives while national bodies take a more macroeconomic stance. Sector-related trade bodies, particularly those concerned with facilitation of properly developed global sector strategies, and major companies participating in these sectors also have issues with national/regional agendas. Beyond the structural and process issues, there are also, of course, strong political elements operating. Politically or administratively devolved entities have, by their nature, more concern for and interest in their own backyards than in taking a national

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perspective. Nevertheless, among those European reviewed in this study there appears to be a growing realisation, certainly at central government levels, that meeting the challenges of global competition perhaps requires the potentially stronger national brand to take a lead in supporting and presenting the country’s best product and service offerings in the critical export markets.

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11. CONCLUSIONS AND NEXT STEPS Conclusions This study focuses on support for presence at international exhibitions, which can only represent a part, however important, of a strategic plan for individual corporate development. While the exporting element forms the focus of government and regional support programmes, it does not necessarily carry the same status for commercial exhibitors who may have other conc3rns such as showing competitive presence, seeking manufacturing partners, or identifying synergistic product offerings. It is also worth noting that other elements within the support programmes, such as trade missions, development of corporate strategic plans and technology transfer can play often equally or more significant parts in export development and thus also require to be addressed as key elements in national strategies for increasing exports. Within the remit of the study, however, a number of conclusions can be drawn which may have some relevance to some other aspects mentioned above. The first and most obvious conclusion is that the UK broadly provides lower levels of support for participants at international exhibitions than every other country reviewed except China. This applies both at central and regional levels, with possible exceptions in the devolved authorities. If budgets cannot be increased, then the UK must find its responses to its international competitors in improved targeting of companies to be supported and the countries and events for which subsidy can and should be provided. Currently, key corporate targets for support tend to be new to export or other small companies; this focus is not practised in other countries, who tend to seek out a broad industry range for their pavilions. If the national exporting objective is to increase exports through increasing the number of exporters, then perhaps the viability of this current approach is proven. If, however, the objective is more simply to increase exports then support may be more effectively targeted at companies with an existing track record of successful exporting. This may offer a useful approach. The range and components of support for exhibiting internationally vary substantially from country to country, and regions play a significant role in providing funding for exhibition subsidy. Many European regions target smaller SMEs or sectors of specific local importance but even at national levels, in France and Germany in particular, a range of schemes exist that companies may find valuable in different circumstances. The UK’s TAP programme has merit in its relative simplicity of operation but there may be value in offering alternative options such as the “Partenariat” programme in France or tightly targeting new high growth sectors in the green economy. Administrative regions and devolved authorities can bring great internal economic. political and democratic benefits and the European countries reviewed have travelled this route often to a significant extent. However, the benefits of promoting countries in this “splintered” condition within the global competitive arena are less obvious, and the European countries reviewed are presently taking active steps to more

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strongly promote the “Made in …” national brands within which other stakeholders can operate. Even Spain and Italy, which have devolved substantial elements of national powers to effective autonomous regions over the last two decades, are seeking ways in which the balance of international branding can be strengthened through greater use of a national rather than regional brand. France and Germany work pro-actively with other stakeholders in international exhibitions to target and prioritise international events and subsidy programmes, operating under a leading national brand. Germany has the most structured process involving its powerful states as well as the other stakeholders, which formats international exhibitions for up to three years ahead under the ‘Made in Germany’ brand, and it may be significant that Germany also has the strongest export performance in Europe. The most valuable lesson that the UK may draw from the experience of these competitors is that national branding is not only important but that its effectiveness may be enhanced through coherent and constructive dialogue with other stakeholders, and that the importance of national leadership can be underlined by adopting a strategic approach to targeting. Although it is unlikely that the German or French models could be easily or directly translated into the UK circumstance, one possible model that might be attainable in taking direction from the other countries could comprise:

• Agreement between UKTI, regions, and other stakeholders on prioritisation of exhibitions to gain funding from national sources, to be available to all SMEs and other relevant corporations likely to enhance the status of the pavilion and the brand. This would provide a substantial structural and process skeleton that could be led by UK branding.

• Clear delineation between UKTI and the regions on criteria for exclusive or supportive exhibition funding.

• Focus regional funding processes on SMEs and new to export business, and part of the regional strategic planning process.

In conclusion, the competition faced by the UK in its promotion of British industry at international exhibitions is strong in Europe and strengthening in other territories. Subsidy funding on offer from its competitors is higher, the number of international exhibitions attended is equal to or greater than those supported by UKTI, and regions play a stronger part in funding participant companies for this purpose. Next Steps Not all issues can be addressed in isolation from other aspects of company support, but if the UK is to achieve export success against its principal competitors within the framework of international exhibitions and trade shows, some of the keys may lie in considering the following actions:

• Review the costs of exhibition support overall with a view to closer alignment with European competitors

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• Review branding activities and policies • Review target companies and consider pavilion population and status • Review the funding roles that could be played by UKTI and the regions • Prioritise exhibitions and events in close cooperation with other stakeholders