News
Countries of the Next Generation
06-05-2010
In the next few years, many international businesses will have to look for growth to territories that were previously not on their corporate radar...
In the past decade we have seen the inexorable rise of the so-called BRICS countries (Brazil, Russia, India and China). And the new decade will likely see countries in Africa and the Middle East having a much greater role to play in the world economy.
The prospects for business are very exciting
Why is this? Well, demographics play a big part. Countries in these regions have rising populations with a majority of young people. This is in marked contrast to the developed world where the population is ageing.
Despite decades of economic problems, prosperity is rising in Africa and the Middle East. While this is admittedly from a low base, there is now a growing and increasingly educated middle class.
There is huge potential for businesses to grow and diversify. Mobile phones in Africa are a classic example. Millions of Africans own mobile phones whereas very few have ever been able to obtain a fixed line. Companies such as Cisco have identified this gap in the market and are convinced that most Africans’ first experience of the internet will be on portable devices (iphones / Blackberries) rather than on laptops or PCs.
But where there is opportunity, there is risk
When companies plan support for their expatriate staff in less developed countries, it pays to expect the unexpected. Companies should consider:
Safety, health and security:
There are the obvious risks of political violence and terrorism. While these are not exclusive to developing countries, poor physical infrastructure – for example poor transport facilities and inadequate healthcare - can hamper the help given in emergencies. Developing countries often suffer from large disparities in income between richest and poorest citizens. This could result in expatriate staff being vulnerable to significant levels of personal crime.
Relocation costs:
In many poorer countries, the costs of maintaining a family to a Western standard can be very high. The availability of housing of good quality may be limited and rents expensive. Schooling for children of the required standard may also be difficult to source.
Business life:
There is the obvious concern of political instability in many countries and this can lead to frustration for businesses used to dealing in an environment of commercial transparency.
Legal structures can be very basic and government institutions subject to political interference. On a daily level this can lead to administrative systems and procedures not working as efficiently as employees may be used to. The result – for the unprepared - could be stress and frustration.
However, fortune favours the bold... and the prepared!
None of these aspects in themselves would be likely to put off companies determined to invest in and profit from the newer markets. And nor should they.
The best companies will have a firm security plan in place to evacuate their staff in times of emergency and ensure that the right level of medical care is obtainable quickly.
Companies will often arrange cultural briefings through their relocation companies for their international staff prior to posting. And, for those heading to the most insecure countries, they would also be well advised to arrange security briefings so that newcomers are well versed in how to protect themselves and their families.
The successful companies will be those that accept that developing countries may throw up unusual scenarios and adapt accordingly. For those, the possibilities are endless.
