That old maxim about the United States being a 'land of opportunity' rings true for British businesses- especially those involved in the ICT sector.

The USA has long been the dream destination for actors, models and aspiring musicians hoping to strike it big on the international stage... and with a population of over 300 million, a GDP in excess of $12,500bn, and an export market worth approximately £30bn a year to the UK, it holds obvious attractions for British businesses as well.

The United States of America is Britain’s largest single export market, and the “special relationship” is cemented by the fact that the Britain is the sixth-biggest provider of goods and services to the USA.It is the leading overseas destination for British investment, particularly as British firms hoping to do business in the US face fewer language and cultural barriers than in other markets.

In fact, the market is so big that trade experts advise potential exporters to break it into smaller pieces and approach it as a series of regional markets – each with their own individual characteristics. They also advise that firms thinking of entering into the market do as much research as possible into identifying which of these contains the best source of potential customers.

New York, Los Angeles and Chicago are all well-known major commercial centres, with huge populations, but the capital city, political and administrative centre is in Washington DC – which has a population of approximately six million, making it the fourth-largest state in the USA.

Simon Howard from the International Trade Centre for Greater Merseyside, recommends Washington as a good starting point for UK businesses – and points to major opportunities for firms in the IT sector.

“Washington has three major airports and is within a two-hour flight of 60 per cent of the rest of the US and Canada,” he says. “It is a great base for international firms, which is probably why there are over 700 internationally-owned companies based in Washington – over 150 of which are British.”

Financially, Washington is a good proposition, too. Some $41.4bn – or 13 per cent of the country’s GDP – is spent there each year. The Greater Washington area boasts one of the most highly-educated workforces in the world and, for the ninth consecutive year, the region contains the greatest concentration of Fortune 500 companies in the US.

For those that still needing convincing, however, its unique selling point is the fact that it is home to the US Federal Government, whose spending on technology is expected to reach a staggering $64.3bn by 2009.

Indeed, although casual observers may believe that the heart of America’s ICT industry is in California’s ‘Silicon Valley’ – a nickname invented by journalist Don Hoefler in the 1970s – the East Coast houses an even greater number of technology companies than its famous West Coast rival.

Moreover, according to the Greater Washington Initiative, the DC area has the largest technology cluster in the US. One in ten Washington employees – 333,000 in total – work in the technology sector, and there are more than 9,000 technology companies based in the region.

Howard warns that with so much competition from native businesses, UK companies need a unique product or service to succeed in the US market, where it is almost impossible for overseas companies to compete on price, but opportunities are endless for those that get it right.

“Realistically, UK companies, especially those relatively new to the American market, are not in a position to bid as prime contractors,” he explains.
“However, where UK companies do have a chance of being successful is in providing niche products which solve specific IT issues.
“Although this will probably only form a fraction of a much larger contract, when you look at the immensity of the federal spend in IT products, even a small percentage of a major contract adds up to a substantial amount of business.”

In order to land such deals, though, companies need to decide whether or not they’re able to make the type of serious commitment needed to be successful in the US. Howard says that it typically takes around three years between making initial contacts in the market until you begin trading in the US, so companies need to make sure they have the necessary financial and staff resources to deliver what is often a longterm business strategy.

Secondly, in order to land major Government deals, companies will eventually need somebody “on the ground” in the US as well as finding suitable local offices.

“It is very important to have a presence in the US,” says Fred Bassnett, North America Market Adviser for UKTI. “Americans prefer to deal with the home market, they are resistant to making international calls and dealing with different time zones, so it is well worth setting up an office in the country, which will of course require considerable investment.”

WHERE IN THE WORLD?
Capitol gains: the US Government will spend $64bn on IT in 2009 Finally, businesses need to make sure they have the diligence to research complex government procurement regulations and ensure they can comply with them.

“There are certain requirements which need to be met before you are even allowed to bid for a Government contract,” explains Bassnet. “The procurement regulations are complex, and state regulations differ from federal ones, so it is important to get the right advice before you begin.

“The market is open to foreign companies and free and open competition is mandated, but there are different specifications for the various federal purchasing thresholds, and companies wishing to tender directly for Government contracts rather than through a third party as a joint venture or subcontractor, should consider obtaining a listing on the General Services Administration (GSA) schedule, as most agencies will not speak to you
without one.

“It is essential that you research the market and get the right advice before you go, and UKTI can help you with this as can other organisations such as the British American Business Council and the Greater Washington Initiative.”

STATE YOUR CASE
A great starting point for companies hoping to grow their international business in Washington is the FOSE exhibition – the USA’s largest technology event for the government marketplace. This month UKTI is supporting a trade visit to FOSE from 19-22 March, where North West companies can meet US Government decision makers from the Federal Defense, Federal Civilian, US State and Local Government technology communities. UKTI can offer support packages of up to £500 for eligible businesses, as well as individual pre-visit briefings, attendance at various Greater Washington Initiative briefings and receptions, and access and use of the UKTI booth as well as market introductions. The FOSE exhibition is held each year in Washington, and although places are already allocated for this year’s visit, companies can register their interest in future visits by contacting Simon Howard on 07966 308438 or This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

CASE STUDY-J4B
One company that attended FOSE 2006 and is doing well in the USA is J4B, which specialises in enterprise software that oversees the grants process. The software allows government, charitable and private organisations that distribute grants to keep track of where money goes and whether grant awards meet funding objectives. It also offers a search engine for businesses, community groups and individuals to quickly find grants available to them.

The company, which has its headquarters in Wilmslow, Cheshire, was set up in 2000 and now has offices in Ireland, the Netherlands and in the US town of Boston. It now has a range of American clients including the Research Triangle Partnership in North Carolina and local government organisations across the Massachusetts area.

Sales Director Peter Crosby was one of the attendees on the 2006 FOSE trade mission, and says that J4B would not have achieved the success it had in America without UKTI.

“We would recommend UKTI’s services to any company thinking of trading in the US – the strength of the networking contacts alone made it a worthwhile trip, and FOSE is definitely one of the best places to start for ICT companies,” he says.

“At the moment, our contracts here are a similar size to those in the UK, but there is far more potential business and we have leads coming through all the time. If you consider that there are 468 local authorities in the UK and more than 40,000 in America, with over 350 cities in Massachusetts alone, it is clear that there are far more opportunities here.”

However, Crosby agrees with the experts that developing the US market takes significant investment, and that a US presence is an essential ingredient for success.

“Government organisations in America do not want to deal with small UK companies, and the business culture here is very different,” he warns.
“There is a far more professional approach to selling and it is very competitive. You also have to be seen as culturally adjusted, and for us that meant setting up an office in the USA.

“It’s also true that in order to succeed you need to have a product that offers something unique and unavailable in the US, but once you get started the opportunities are as enormous as the country.”

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