TBY talks to Vince Cable, Secretary of State for Business, Innovation, and Skills of the UK, on British-Turkish business relations, Istanbul's aspirations to be a financial center, and the significance of SMEs.

Vince Cable
Born in 1943, Vince Cable studied Science and Economics at Cambridge University, before attaining his PhD at Glasgow University. After working between 1966 and 1968 as Treasury Finance Officer for the Kenyan Government, he returned to Glasgow University to lecture in Economics. Following positions included First Secretary in the Diplomatic Service of the Foreign and Commonwealth Office, Deputy Director of the Overseas Development Institute, and Special Adviser on Economic Affairs for the Commonwealth Secretary-General, Sir Sonny Ramphal. From 1990 he worked for Shell International, and in 1995 became the company’s Chief Economist. He was later appointed Head of the Economics Program at Chatham House and, since becoming an MP in 1997, was appointed a fellow of Nuffield College, Oxford, and was a visiting research fellow at the Centre for the Study of Global Governance at the London School of Economics. He joined the Liberal Democrat Shadow Cabinet in 1999, and was appointed Business Secretary of the Coalition Government in May 2010.

What is the significance of Turkey to UK business?

It's very important. The relationship has taken a great step forward in the last eight months or so, partly because of the new information partnership and partly due to the state visit of President Gül, and my own visit with a business delegation; I was the first Business Secretary to visit Turkey for 10 years. On the ground, UK exports are up nearly 30% and imports from Turkey up by around 10% in the last year. It's one of the areas of rapid growth of trade and business generally, something that we have committed to strengthening in the future as part of our strategic partnership. We are committed to doubling bilateral trade by 2015, and we're well on track to achieve that.

How would you characterize economic relations between the two countries?

I think you can legitimately criticize the UK for not having paid more attention to Turkey's emergence as a highly successful economy and a very successful democracy. Both of those things are now apparent. While this may not have been fully appreciated in the past decade, a lot of work has been going on to build a relationship with Turkey. The most important issue, which was brought to the forefront by the previous government and is a position maintained by the current UK government, is our support for Turkey's accession to the EU, which hasn't been so popular with other European countries. However, we continue to make the case for Turkey's membership.

What would be the impact of Turkey's accession to the EU for British business?

It would be good for Turkey, and it would be good for the UK. It would remove a lot of trade barriers in tariffed and non-tariff areas, and it would mean that Turkey would be joining the single market, which is a much more integrated grouping of countries with common standards. Trade would increase very rapidly. There would be a big incentive for investment flows. We're already getting British companies investing in Turkey. There's quite a lot of Turkish capital coming into the UK as well. Once economies become integrated through a customs union or a deeper relationship, then trade and investment flows operate much more substantially.

What is the level of integration of British companies in Turkey?

I believe there are more than 2,000 British companies investing in Turkey—not just the big names like BP, Shell, and Rolls-Royce, but many smaller companies have moved in, and there are several SMEs within the group. When we speak about British SMEs in Turkey, it is mostly the “M" rather than the “S"—there aren't many one-person companies. We're talking about the medium-sized companies, which in many ways are the basis of growth in our economy and in Turkey. One of the reasons that Turkey is such a successful and growing economy is because of the large numbers of entrepreneurs, initially quite small, but who have gone on to grow very rapidly—not just in textiles and traditional sectors, but also in much more sophisticated industries. It's the medium-sized companies where much of the growth and innovation is. One of the things we've realized in the UK is that compared to a country like Germany we haven't done enough to encourage the SME sector in international trade. My colleague, the Trade Minister Lord Green, who has worked on this issue full time, accepts that an absolutely key part of his mandate is to build up trade involving SMEs.