BPI and Process Adaptability Improvement
In modern times, the Business Rules are changing every day. Every Business, be it a Product or a Service, changing its way of doing business to suit the customer expectations has become the rule of the day. Technology has become the enabler for the businesses to reinvent their offerings as well as their operations. Businesses […]
Why Growth is Stalling around the World?
Why is Growth Stagnant? We read in the print and online media about why governments worldwide are unable to revive growth especially since the Great Recession of 2008. We also read how policymakers are trying their best to jumpstart growth but are being unable to do so. Moreover, we see stock markets going up while […]
Are We Living in a Reality TV Like World? How Does This Impact Business and Society?
Whoever Controls the Narrative, Wins Look around and watch what is going in the world around us and you would find that things are not they seem to be. While our business and political leaders proclaim all is well in front of the cameras, the situation on the ground deteriorates. Indeed, the rise of charismatic […]
Why Cities are the Future and What this Means for Investors and Businesses
Cities are the Future of the World The future of the world would be in cities and urban and semi-urban regions and hence, it is better for governments, businesses, investors, and citizen groups to prepare for an urbanized world where sustainability of the urban modes of living and working would increasingly be strained by inadequate […]
Digital Payments: What they are, How they Work, and their Benefits and Problems
In recent months, all of us have heard extensively about the “war on cash”, the move to make India and other countries “cashless economies” and the general trend among policymakers worldwide to move the economies of the world to a digital and information enabled paradigm. In this context, it is worth noting that the emphasis […]
The previous articles in this module have discussed the contours of international business and the key drivers of the phenomenon.
This article discusses how international businesses are affected by the rise of the emerging markets especially the BRICS (Brazil, Russia, India, China, and South Africa) and the next “Breakout Nations” from the second tier of the emerging markets.
The point to note is that ever since the emerging markets opened up their economies and liberalized their procedures, international businesses have found a readymade market for themselves in which they can operate in, make, and sell goods.
Often, it is the case that emerging markets provide the international businesses with the right opportunities to expand and grow further. When considered against the backdrop of falling growth rates in the West, the western multinationals could not have asked for more with countries like China and India opening up like never before.
For instance, the recent decision by the government to push for FDI (Foreign Direct Investment) in most sectors is a step in the direction of benefit to western multinationals.
Though globalization picked up in the 1990s and gathered steam subsequently, the recession following the dotcom bust proved to be a setback to international businesses. Further, the 911 attacks proved to be another obstacle to the expansion of international businesses.
The closing years of the first decade witnesses the 2008 Great Recession, which dealt a decisive blow to international businesses.
In this gloomy scenario, the growth in the emerging markets was the silver lining for the international businesses, which was captured well by experts like Ruchir Sharma in his book, The Breakout Nations, who pointed out that western capital had no choice but to migrate to countries like India and China.
If we look into the future (though predicting the future is hazardous in these fast changing times) we find, the next frontier for international businesses is the tier two emerging economies like Vietnam, Ireland, and African countries.
Without being too optimistic, it is clear that the growth in these markets would drive the expansion plans of international businesses. it is also clear that international businesses can leverage on the demographic dividend that these countries.
To explain the term, the higher proportion of young people in the country’s population is called the dividend that these countries get because of their demography. Hence, with so many young people joining the workforce, it is apparent that the emerging economies offer the best possible means of growth for the international businesses.
Finally, western multinationals have to contend with the international ambitions of emerging market companies as well. in recent years, there has been a trend wherein companies from India and China as well as Brazil and Russia have started to make rapid strides in their expansion plans overseas. Hence, it cannot be said that the flow of capital is unidirectional alone.
In many ways, it can be said that the global economy is now at a stage where it is anybody’s game and hence, the world is indeed flat for those with the innovative edge, hard work, and sustainable business models.
Your email address will not be published. Required fields are marked *
Cross Border Mergers and Acquisitions and Some Recent Trends in this Field
February 12, 2025
