If you have chosen to study business, a large part of your success on that course (and after it) will rely on keeping up to date with what is going on in the rest of the world’s economies. Luckily, there are several resources you can use to find out about the state of international business, from mainstream news websites like the BBC and The Guardian to more niche sites like Business Insider, The Economist, and Forbes, which have a business or economic focus.
Even with the help of these websites, it can sometimes be hard to know where to start when trying to understand business trends on a global scale. That’s why we have put together a brief summary of some of the most significant trends that have emerged in 2018.
As the gap between developing and developed countries narrows, the opportunity to grow businesses in these emerging markets becomes more appealing and cost effective. Some of these developing countries are known by the acronyms BRICS and MINT, which stand for Brazil, Russia, India, China, and South Africa, and Mexico, Indonesia, Nigeria, and Turkey respectively. BRICS contributed more than 50% of the world’s economic growth in 2017 whereas MINT have substantially smaller economies that show much slower growth. Although companies are still choosing their markets carefully, developing countries represent a great deal of business potential.
A closer look:
- China: China represents 25% of the MSCI Emerging Markets Index and is regarded as the engine of global growth. China leads the world in applying automation and robotics to manufacturing with 451,000 robots installed at the end of 2017, and an estimated 950,000 to be installed by 2020. The past success of the country is often attributed to its workforce and this doesn’t look likely to change. However, China’s “previous advantage in low-cost, unskilled labour is shifting to well-qualified graduates trained in science, technology, engineering, and mathematics (STEM) subjects.”
- Turkey: You may have seen Turkey in the news recently, due to the country’s ongoing financial crisis. In a nutshell, the Turkish Lira has lost up to a third of its value relative to the US dollar in under a month – a record low for the country. This can be, in part, traced back to US sanctions which were “imposed on August 1 after Turkey’s government refused to hand over an American pastor it has detained for almost two years.”
- India: India has one of the fastest growing economies in the world, with Bangalore beating Silicon Valley as the most dynamic technology hub globally. Despite withdrawal of high denomination banknotes (a measure to tackle corruption) the IMF predicts that “cash shortages will gradually dissipate, with economic growth picking up to 7.2% in 2017/18.”
This trend began with Kickstarter, with several similar sites cropping up in the last few years. Although a tool that’s primarily used by individuals, it is now used by established companies to fund new projects or help to gain publicity – and the latter reason is sometimes more important than actually raising the capital through the site.
A good example of this is American company, Clorox. Although known for their cleaning products, the multi-billion-dollar business also own a kosher soy sauce company called Soy Vay. Despite not needing any additional funding, they teamed up with start-up Three Jerks Jerky to crowdfund for a new sauce: Veri Veri Teriyaki. “The Kickstarter thing just kind of naturally evolved, where we said it made sense as an awareness driver, as a way to build one-to-one connections with consumers in a way that’s very important to us and, frankly, as a way to cut against the grain of typical product launches in CPG (the consumer packaged goods industry),” said Adam Simons, who is head of emerging brands at Clorox. This campaign not only spreads the word but serves to gauge interest in a new product.
Stopping environmental damage has been a pressing social issue but recently it has entered into the business world. Companies like Wal-Mart are championing sustainability, claiming they wish to work towards “zero waste, using 100% renewable energy and creating products that sustain the environment and people. Sustainability is being used and advertised by Wal-Mart and other corporations as a distinct competitive advantage.”
As people grow more conscious of their impact on the earth, businesses have had to follow suit. This is already happening in the West but is slowly being adopted around the rest of the world, and marketing clean technologies internationally is an industry expected to grow faster than the overall economy. Clean technologies are generally defined as “products, processes or services that reduce waste and require as few non-renewable resources as possible”, so this can include things related to renewable energy, recycling, or green transportation.
Some real-world examples of recent environmentally-aware initiatives include:
- Dell teaming up with Lonely Whale to battle plastics pollution
- Llamasoft, a supply chain software company to find ways to help businesses make their operations greener, while keeping costs low
- Sainsbury’s has pledged that by the end of 2018 each of its fridges will possess “aerofoil technology” to prevent cold air spilling out
And it’s not just companies; Albania, Iceland, and Paraguay obtain essentially all of their electricity from renewable sources (Albania and Paraguay 100% from hydroelectricity, while Iceland is 72% hydro and 28% geothermal electricity).
The international business landscape is forever changing and is never static. New technologies, emerging markets and political developments are just some of the factors which create unexpected shocks and opportunities for international businesses. So make sure you stay in the know with the latest news, our suggestions at the start of this post are good places to start.
Our MSc International Business provides you with expertise in the core principles and concepts in international business, whilst the latest trends and future projections are key features on the programme. Please visit the course page for more information.