A Trade Mission to Peru ready to go

In December 2014, Adam Budgen (a world renowned Orthopaedic Surgeon; partner in the White Rose Clinic; North Yorkshire Orthopaedic Specialists; lecturer at Hull York Medical School and Founder of the K’Anchay Nan Foundation) and Robert Bell (CEO of Archomai, Fellow of Durham University Business School; Reader at Aberdeen Business School; a member of the Steering Group at the University of Hull Logistics Institute and a founder, with Lord Prescott of the Northern Gateway Initiative) will visit Peru as part of the NGI trade mission.

Adam will be advancing the work of his Foundation on Education and, laying the groundwork for a Clinic to meet local needs; Rob will be speaking about NGI; the transformational agenda and, the potential for close links between Peru and the North of England. This Trade Mission is being supported by the UKTI. Lord Prescott, former Deputy Prime Minister for the UK Government and co-founder of NGI will follow with his presence at the United Nations Climate Change Conference. Lord Prescott is recognised Internationally for the role he has played both in the successful negotiations on the Kyoto Protocol on climate change resulting in the Treaty and on the post-Kyoto agenda leading up to the Peru Conference.

The following notes supplement the video discussion between Rob and Adam ahead of the trip.

What is the Northern Gateways Initiative?

Across the globe, trade corridors act as a catalyst for sustainable growth through targeted investment in infrastructure, water, energy, enterprise, skills and connectivity. Where the focus is energy or minerals, many trade corridors act as a catalyst for Local Content maximisation – a major issue in the emerging and developing world and a focus of this blog. See: Kakania below.

NGI starts as a UK initiative using the Mersey Humber Tyne “trade corridor” as a catalyst for building sustainable communities in the North of England as a means to generate enterprise, opportunity and jobs. NGI is a catalyst for efforts to close the widening economic gap between the post industrial and fragmented North and the London dominated south of the country. This is a transformational agenda.

This is not a fresh tier of governance but a framework for discussion of core issues, challenges and roadblocks to enterprise, jobs and sustainable economic growth. The NGI accelerates the need for decentralisation and regional control over the local economy by the people of that place.

NGI goes further than the UK in seeking to encourage a global network of such trade corridors as a means to build local content, capacity and skills capability as a platform for sustainable growth. For example, in Ghana momentum builds on the Volta Trade Corridor: mapping a historical slave trade route with a view to transform local opportunities through a viable trade corridor along the same river system.

How is NGI relevant to Peru?

Peru is developing fast. The Mining industry is seeking to maximise local content and, there is a concerted effort to make Peru an effective and efficient trade hub through which vital trade corridors pass. To achieve these objectives local capacity in human (wellbeing and skills) as well as physical capital (infrastructure, energy, connectivity) has to develop.

Efforts to develop the Corredor Bioceanico parallel NGI efforts in the North of England and collaborative projects with other trade corridors worldwide. In fact, the key learning of Corredor Biocenico is the need to integrate and promote the mutual benefits from collaboration across the departments from West to East.

There are a number of “islands” of economic activity that will benefit from enhanced physical and virtual connectivity. The same applies in the corredor de comercio south from Lima to Arequipa and on to Juliaca. The “corredor” offers a catalyst for investment in infrastructure and a drive to develop institutional capacity and human capital – and this means well being as well as knowledge and skills.

The NGI is making this trip to Peru to listen, learn and, offer insight and trade links with the North of England to help out. Over time, NGI seeks to act as a hub for a series of transformational projects with other partners from the North of England and Peru to generate mutually beneficial outcomes.

What is the Transformational Agenda?

The original management guru, Peter Drucker, said that “demography is the future”. By 2050 there will be close to 10 billion people on the planet (up from 6 billion today); 75 per cent will live in urban areas with most of them living in 50 City Regions. If we are to feed this growing population we will need to improve agricultural output by over 75 per cent, re-think and re-engineer urban spaces, deal with inequality and informal working with a more inclusive perspective.

Ever since the three F’s crisis of 2008 (Fuel and Food as well as Finance) it has become clear that market fundamentalism does not hold all the answers and, as Wharton Economist Mauro Guillen makes clear in The Limits of Convergence (2006), the goal of globalisation cannot be to converge all markets around one single model. There is no one best way and, in the work of Hernando de Soto Peru has made a significant contribution to the understanding of the informal economy and the need for inclusivity and a clear ethical dimension to business practice.

In recent years Emerging markets like the BRICs (Brazil, Russia, India and China) have been joined by the MINTS (Mexico, Indonesia, Nigeria, Thailand and South Africa) as developed economies stagnate and others realise (or struggle to realise) their potential.

Demography is transforming the global agenda as business as usual fades as an option. Urbanisation is another factor as over 75 per cent of global population will live in urban areas – most of these in 50 massive City Regions connected by trade corridors offering significant competitive advantage to those social and economic actors involved.

Then there is rapid innovation triggered by often disruptive technology. Whole industrial sectors are converging – phones, cameras, computers, music and a range of other services are combining and integrating in ways that were unimaginable only a few years ago. The Transformational Agenda is a socio economic perspective acting as a catalyst for fresh thinking and more responsive practice. For example,

Transformational Logistics is part of the solution.

The term TL was coined by Rob Bell to make the distinction between the logistics and supply chain thinking of the developed world and the need for logistics and supply chain thinking and practice relevant to emerging and developing markets like Peru.

These markets are characterised by a high level of traditional, low tech, low skill, small and informal firms increasingly having to work with modern, high tech, high skill, Corporations and their wider supply chains.

Then there is the climate change agenda that is being discussed at the UN Conference in Lima. The Transformational Agenda argues for a shift from linear supply chains (take, make and throw away) to circular supply chains (source, make and re-use, recycle) as a part of adaptation to pressing realities in terms of energy and sustainability.

These days supply chains compete not companies and, as raw materials become scarcer the winners will be those who re-use and re-cycle scarce and increasingly expensive raw materials over those who source cheaply and pay no attention to supply chain resilience (natural disasters etc) and social responsibility.  This wider ethically based business perspective is the transformational agenda and recent transformational logistics projects include:

  • Leather industry, Zambia. From herd to hide has been mapped to build the business case for targeted investment in technical capacity and skills to add more value locally – meaning make the designer accessories and shoes that to date have been made and branded elsewhere.
  • Fishing industry, Ghana / India. The process from catch to market for traditional fishing communities has been mapped. In Andra Pradesh, the mapping process revealed the use of cooler boxes in the fish market that had been “re-cycled” from medical supplies coming in during the tsunami years earlier. The business case needs to be built to invest in a viable cold chain and the use of mobile technology can help as well. Then there is the pressure from industrial fishing has triggered a modern day slave trade and this needs to be mapped and mitigation strategies developed.
  • Local content in oil, gas and mining industries. Increasingly, countries are seeking to maximise local content and this means capacity building in local enterprise, high skilled jobs, high value products and wider support in hospitality and food services over time as well as support services such as hospitality, foodstuffs and franchises immediately.
  • Skills Capacity Building. Core sectors in emerging and developing countries need to enhance local content. This needs innovation in skills training using simulation and simulator technology for all equipment across the upstream downstream supply chains – drilling, handling and lifting, trucking, warehousing as well as offshore vessels; dynamic positioning systems, operations and maintenance.
  • Healthcare & safety at work. Oil, gas and mining industries have set increasingly stringent global standards and, the role of occupational healthcare, productivity as well as supply chain resilience and reduced risk are critical to the maximisation of local content for any viable oil, gas or mining project. There are several projects building momentum in this area.
  • Global NGI Trade Corridor network. This is starting out and this trade mission will explore the potential for collaboration on many levels.

In all cases, there was no room for developed world solutions to majority world challenges BUT, clear opportunities for developed world companies (small as well as large) to assist, enable and develop mutually beneficial transformational collaborative projects.

Transformational Logistics seeks to promote local value addition and enhanced livelihoods instead of setting up supply chains for the benefit of developed world lifestyles. It is not enough to create a supply chain aimed at better, cheaper and faster ways of moving cheaper raw materials elsewhere for value addition. Sustainable futures will come from retaining more in country and maximising local content.

The trade mission:

These notes and the interview are intended as a means to clarify the objective of the trade mission – to engage and open up dialogue paving the way for future collaboration and mutually beneficial outcomes.

  • Rob will be speaking of the transformational agenda in Peruvian terms seeking partnerships to advance trade corridor thinking and trading links with the NGI and the North of England.
  • Adam will be talking of the role of occupational and orthopaedic healthcare in achieving sustainable local growth. Specifically, he will highlight the need for an occupational and orthopaedic clinic located in mining areas of Peru. Both will highlight the need for education, skills and wellbeing as fundamental building blocks for a sustainable future.

Details of time and place of the talks at various Universities will follow. Any questions – just post a comment on this blog (in English or Spanish).

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