Building business across borders
Chemistry is a global industry. Relatively few chemistry-using companies trade exclusively within their home nations – certainly in the developed world. The drive to lower costs and capitalise on fast-growing markets has led to an explosion of internationality.
It’s no longer unusual for even a small company to maintain several offices or plants across Europe, the US, China and/or India. Or at least to have well-established partnerships with local firms in those countries. Where once this would have been a badge of superiority, reserved for the big multinationals, now it is almost expected.
Even without a physical presence abroad, modern companies’ supply chains and customer networks, by their very nature, spread far and wide. It would be difficult, if not impossible, to produce many chemical products without cross-border trade.
But not all borders are created equal. History and politics sit across the table from physical and human geography in the complex game of commerce. A strong political link between countries can make it cheaper and easier to ship products halfway round the world than negotiate bureaucracy and pay the border tariffs imposed by a nearby neighbour.
And the chemical industry is not limited to commodity trading. Much of the most important trade in chemistry is intangible – that of information and knowledge. Intellectual collaborations usually function best when the partners are strongly connected and interact regularly. That doesn’t have to mean they need to be close by, but convenience is a major factor, and the power of face-to-face interactions should never be underestimated. Broadening horizons can also bring access to new sources of support, as nations look to attract certain businesses and build their economies.
Moving information across borders can also throw up interesting challenges of its own. A simple telephone call, if it involves discussing technology relating to one of the many seemingly-innocuous substances controlled under chemical weapons treaties, for example, can become classed as an ‘export’ of information that would need to be declared to the relevant authorities.
Given these and the myriad other challenges of international trade, one might ask why companies bother. The simple answer is they can’t afford not to.
To discuss these issues and more, join me and a panel of speakers from across industry and government at Chemistry Means Business – the Royal Society of Chemistry’s flagship event for industry on 13–14 June 2017 in Manchester, UK.