Majority of business leaders take cue from emerging markets

Around 84 per cent of companies in emerging markets have looked to other emerging markets for growth lessons and best practice, highlighting the growing influence of developing markets in the global economy, said a study conducted by Tata Communications in association with Vanson Bourne, a research company.

87% of business leaders from both developed and emerging markets (China, India, South Africa, France, Germany, Hong Kong, Singapore, the Middle East, the USA and the UK) are actively engaging in emerging markets, despite 56% acknowledging that they associate emerging markets with political instability. 55% of Singaporean respondents, 45% of Middle Eastern and 40% of South African businesses have already set up operations in emerging markets, the only markets in the survey to have a higher figure with an established presence than those considering such a move (e.g. India, China), said the study.

The main driver for moving to emerging markets is the potential to capitalise on growth opportunities with 63% of business leaders surveyed selecting this as a reason. In line with the focus on growth, competitive activity is also a factor for moving into emerging markets. Respondents who are looking into, or are already operating in emerging markets; expect to increase investment in emerging markets by 36% over the next year.

Respondents reported that the significant challenges to operate in emerging markets are 18% cited government regulation, 16% established competition, 14% finding skilled staff and 11% communications and digital infrastructure. 57% of those surveyed stated that political instability would prevent them entering an emerging market. Lack of a reliable communications infrastructure is also a blocking factor. And talent was also identified as a critical challenge by 37% respondents.

Vinod Kumar, MD and CEO, Tata Communications, said, “For companies to capitalise on that potential we need to see greater levels of investment in the infrastructure that is essential to support it. That will inevitably require more focus on developing talent and innovative thinking in markets that can have less educational investment in those areas. It is clear that businesses are prioritising communications and digital infrastructure as a critical part of their operations. The ability to manage those communications and to ensure reliability and security requires a level of global, and in particular, emerging market experience.”

This online study was conducted in Middle East, South Africa, Hong Kong, Singapore, India, China, France, Germany, the USA and the UK. Around 1,600 business leaders were interviewed from the C-suite to manager level, across 10 sectors namely financial services, manufacturing, business and professional services, IT/technology, healthcare, retail, transport/travel, telecommunications, utilities, media and entertainment.