Debunking the Myth that Trade Missions Add Little Economic Value

  • June 16, 2016

From the other side of the world, John McPherson (Sector Development Manager, Cleantech) writes on how the VEC is uniquely positioned to strengthen business ties between Vancouver and China. 

3cec242John McPherson

John McPherson is a Sector Development Manager, focusing on Cleantech for the Vancouver Economic Commission, a role he has held for the last six years. In this role, McPherson is responsible for the development of international business development programs and trade missions; providing support to Vancouver’s clean-tech business community; and facilitating business-to-business and business-to-government introductions. Before joining the Commission, McPherson served as Director of Marketing at Apex International, where he led international expansion and recruited new education partners. He has also served as the Assistant Trade Commissioner for the Consulate General of Canada in Hong Kong.

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As VEC’s Sector Development Manager for the cleantech industry, my role involves connecting companies to growth-related opportunities in both local and international markets. I have helped organize outbound missions since 2010, predominantly to top-tier cities in China. China remains a high-risk, high potential market, which is why VEC is actively bridging connections and mitigating risks to companies planning on entering the market.

Doing Business in China: The Importance of Strong Relationships

The programming we have planned will generate results not only for our participating companies, but the broader cleantech industry in Vancouver. Going at it alone in China is not easy.  As your company grows, as in life, you need guidance and support. You don’t always think you need it and you don’t always ask for it, but having a partner like VEC there to lend support helps more than you would think.

China is challenging enough for larger global players, let alone smaller firms. As a smaller company, your ability to absorb risk is lower and your financial runway is shorter. Vancouver’s cleantech industry is comprised mostly of start-ups under 50 people, often struggling to advance beyond the commercialization stage. When they engage dominant Chinese firms in conversations, an imbalance of power may grow between the two parties.

Although today’s market conditions provide a more level playing field for foreign firms, being an outsider with few insider connections puts you at a disadvantage. China has an in-group culture where more entrenched circles of trust exist. Without strong relationships (‘guanxi’) and relative status in society, it is harder to achieve a true win-win scenario in business.

The Role of VEC’s Asia Pacific Centre

With this in mind, VEC’s Asia Pacific Centre has concentrated its efforts in the last few years on building relationships in China. Our involvement in the upcoming Shenzhen Low Carbon City Forum—where we know the conference organizers—illustrates how leveraging relationships in China can lead to widespread benefits.

This conference will bring academics, government officials and business leaders together for a dialogue on reducing CO2 emissions and building smarter, greener cities. VEC’s objective at the Low Carbon City Forum is to establish city-to-city links with Shenzhen and build an active trade corridor with Vancouver. With greater awareness of Vancouver and our business community, we expect that over time, the Shenzhen and Vancouver business communities will become more interconnected. Like Vancouver, Shenzhen is a growing tech hub and has taken a leadership role in building a green economy.

One of the reasons I’m going is to support the five Vancouver-based conference participants (in fuel cell, transportation and construction sectors). Furthermore, I will be delivering a presentation on the Green and Digital Demonstration Program (GDDP).

VEC Programming at Shenzhen

The GDDP is a program allowing local entrepreneurs to use assets and infrastructure owned by the City of Vancouver for demonstrations and proof-of-concept trials. The CEO of Moovee Innovations, one of our Vancouver companies, is presenting during the same ‘green/smart city’ session; I will be highlighting their leadership in autonomous vehicle technology and future involvement in VEC’s GDDP program. The long term goal for GDDP is to set up a network of demonstration programs around China so that Vancouver companies can demonstrate their technology in major markets like Shenzhen, Beijing, and Shanghai.

We are working with the BC Ministry of Trade to organize a roundtable between senior level government officials and Vancouver companies. Through our strong relationship with conference organizers, we embedded our cleantech leaders in highly coveted speaking roles; without our support, it would have been very challenging for participating companies to secure speaking slots in the agenda.

Spotlight on Vancouver

We are also organizing a ‘Spotlight on Vancouver’ event, where we will debut the ‘Amazing Vancouver – Green City’ video, and sign a Memorandum of Understanding (MOU) with the Shenzhen Reform and Development Commission. The MOU will effectively give City of Shenzhen officials ‘permission’ to travel to Vancouver in the future with a targeted group of investors and companies. During such visits, VEC would play an active match-making role to ensure there is a local benefit. Shenzhen businesses that do not join the officially sanctioned missions will surely hear about Vancouver’s innovative, low cost business environment from returning companies. I would argue that the ripple effect from signing MOUs like these can sometimes be overlooked; the impact is not as obvious to those that only see the ceremonial nature of the signing.

Lastly, we have invited our Vancouver companies to speak on a panel to a room full of investors and potential partners about their experiences in doing business in Vancouver and China. The objective is to brand Vancouver and build the City’s profile as a green economy leader. By selling the City’s attributes and highlighting our green success stories, we are in effect helping all Vancouver businesses.