What is the future of global businesses? Since no one has the power to know the future, business leaders forecast future trends and act before competitors exploit opportunities. In doing so, what are the trends that the business leaders are following?
One of the most seemingly obvious ones is the focus on growth markets. What is a growth market? In order to understand this, we need to look at what business leaders see as their market. After World War II, American corporations heavily expanded to international markets and became multinational corporations. These multinational organizations have been different than their predecessor British global corporations in the sense that they transcend the national boundaries. These organizations see the globe as a single market. Today, the multinational organizations are looking for opportunities around the globe, where emerging economies create new talent and new demand for their operations.
Multinational organizations have to use the art of business to understand where the growth is and where it will come from. Goldman Sachs Asset Management defines growth markets as “any economy outside the Developed World that is at least 1% of current global GDP” (1). Based on the forecasts, today’s growth markets are expected to have 46% share of the global GDP in 2050. This growth is very substantial and very fast. So, how should the business leaders capture this growth?
There are a few guidelines business leaders follow:
- Be flexible in your investments and operations.
- Follow up with the most recent developments of technology in growth markets. Think about how the current technology in developed markets can be launched and adapted in growth markets.
- Track political and governmental actions in growth markets and understand how they would influence current and future business environments.
Growth markets are usually geographically defined based on country borders, but good business leaders look beyond the large cities in these countries and see where growth will be. The trick for businesses to capture opportunity in growth markets not about where the growth is today, but it is about seeing where it will be tomorrow.
To learn more about growth markets, visit http://www.growthmarkets.com.