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    Have TPOs Moved on Since the 1990s? A View from Western Europe


    © International Trade Centre, International Trade Forum - Issue 1/2005

    More specialized customer services are being delivered more efficiently through communications technologies. TPOs now need to focus more on exporters of services, since European economies are over 80% based on services.

    My answer to the question in the title would be yes. "Is there likely to be a market for my white cotton shirts in Paris? Can you help me find someone there to buy them? How do I set about doing it?" These basic questions, posed to me as a junior officer in a trade promotion organization (TPO) in the United Kingdom in 1960, remain largely unchanged. However, the answers have changed over the past 15 years.

    Over the past 45 years, the change has been considerable.

    More customer-focused

    TPOs have become more customer- or demand-led. TPOs used to decide what services they would provide and offered these to the public. Increasingly, the organizations find out what services companies (exporters and non-exporters) want or what changes must be made in existing services. Attempts are being made to measure and to evaluate (although this is technically difficult) customer satisfaction through independent, third-party surveys of what the customer wants, and how well the TPO is meeting that demand. They were not doing this 15 years ago.

    A global perspective

    Generally, TPOs have become more global in their outlook. Once they would have helped only those firms exporting products manufactured or originating in their own country. Today, if there is enough added value in the TPO's country as part of a global supply chain, the TPO recognizes the need to assist this customer.

    More and more, TPOs have a mandate to assist enterprises in their country to invest overseas in order to increase efficiency and reduce costs by outsourcing. This generates dividends that can be repatriated to the home country. Some TPOs have also embraced the role of encouraging foreign direct investment, which gives them the supply capability to export competitive products.

    Other TPOs have joined forces with tourism promotion in Western Europe, a sizeable export earner in its own right in many countries. Yet others have pursued the development of an enterprise upstream by taking on responsibility for the development of small firms and exploitation of new technologies.

    Using new communications technologies

    The way TPOs communicate with their customers has certainly evolved over the past 15 years. From a situation where all contact was by post, telephone or telex, TPOs now communicate by e-mail, through web sites or SMS (short message service), and have organized their enquiry response facilities in call centres, frequently offshore. A call to the London office of a TPO about an export to Germany can be, and is now routinely, transferred automatically to Germany for a response. None of this was even dreamed of 15 years ago.

    Streamlining customer care

    Customer care has also been streamlined. An enquiry from an enterprise was once handled by a local office, routed to headquarters and then sent to the overseas network if the headquarters deemed it necessary. This rigid way of working has been replaced by TPOs, such as those in the UK and France, making substantial reductions in the size of their headquarters. They now facilitate the transfer of enquiries directly from customers or local offices to the overseas network of trade representatives and vice versa. This trend is likely to strengthen in the years ahead, with continued reductions in head office staff.

    Confirming the role of TPOs

    These are clear indicators that TPOs have been moving with the times and the situation is not as it was 15 years ago. However, this has not stopped ministries of finance from questioning their role.

    In 2002, a benchmarking study undertaken for OSEC Business Network, a Swiss organization for exporters, reviewed TPOs in eight Western European countries. In the preceding five years there had been at least one major review of the rationale and structure of the country's principal TPO. In each case, although there had been some tweaking of the structure, it had been left basically unchanged. Separately, and no doubt for different reasons, independent reviewers in each of those eight countries concluded that the TPO was still needed.

    No TPOs seem to have actually disappeared over the last 15 years, even if they have been the subject of name changes or of mergers, as in the case of the Irish Trade Board being subsumed into Enterprise Ireland.

    A more regional focus for some

    Not only are national TPOs continuing, but in several European countries, such as France, Spain and the UK, there exist important regional TPOs. This trend has emerged with the devolution of powers within countries, but is also driven by customer demand for a service that is more focused on their area and their individual needs.

    The European Union (EU), formally prevented by the rules of subsidiarity from undertaking national TPO activity, has nonetheless included multi-country trade promotion within its programmes, such as ProInvest, MEDA and AL-Invest. EU member states have approved these various trade promotion budgets.

    SMEs a strong customer base

    The number of customers who continue to seek assistance also supports the need for TPOs. Customer numbers in TPOs appear to be holding up, and indeed in the case of Australia, are rising. The way in which they expect their needs to be satisfied may be changing (such as using the TPO web site rather than the traditional trade information centre), but they still appear to be seeking support.

    However, while recognizing the value of their service to the needs of small and medium-sized enterprises (SMEs), we should not overlook the fact that in virtually every Western European country, most exports and most outward investment goes on without any intervention or knowledge by the national TPO. This situation has not changed in the last 40 years.

    What TPOs are doing might be described as being at the margins. The average European SME knows about marketing and selling and needs little help from government organizations to do this in the home market. But to go abroad, they need help in accessing information, perhaps in analysing it and certainly in having an outreach.

    TPOs, with a network of offices abroad, have a major advantage. The TPO can assist SMEs, which usually have no such network and need help to make contacts in an overseas market and to set up meetings. A large enterprise usually has no such need, unless it is the political influence of an ambassador to open the doors of a large public organization.

    Support needed for services exports

    There is a gap yet to be filled by the majority of TPOs in the area of services exports and exporters. In major developed economies, such as the UK, manufacturing - the traditional source of enquiries for TPOs - now accounts for 20% or less of gross domestic product.

    Services, once called "invisible exports", account for the majority of a country's production. Getting information on overseas markets and penetrating them when there is nothing tangible the exporter can show is quite a different challenge. Most TPOs do not yet recognize this, partly because they do not know how to respond to enquiries and partly because their staff do not have the skills and knowledge to do so.

    Evolution, not revolution

    There has not been a revolution over the course of the past 15 years, but there has certainly been an evolution. Will TPOs still be around in 2020? Probably yes, but they may look very different and function in a way that we cannot even begin to imagine.

    Alan Reynolds is a consultant on foreign trade promotion. Until

    1999, he was the Director of Export Services in the British TPO, now

    called UK Trade & Investment.