Underlying the strategic responses presented, are common environmental conditions driven by governmental action. They set the context for the development of the three differentiated strategies described previously. In spite of these actions for the most part being confined to individual countries, over time they will extend to new international markets where the corporations they host decide to expand.
These environmental conditions are the outcome of formal or informal relationships between governments, individuals and corporations. As a result of our research and our professional interactions with a significant number of governments and companies throughout the emerging market economies, we have identified three sets of government-driven categories for success:
| Government plays a key role in maintaining a country's pool of available labour, particularly through labour laws, educational support and health care. Vital issues for emerging-market labour forces include employer-employee relationships, sustainability of pensions and other benefit funds and the mitigation of regional hardships such as natural disasters and epidemics.
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| Governments can be active in adopting pro-growth initiatives to spur economic development. Much private enterprise depends on an increasingly modern infrastructure, for example, including air, sea, rail and road facilities; Internet and telecommunications availability; consistent power sources; and clean water and sanitation services. Governments can stimulate development through financial subsidies without running afoul of trade agreements, for example, through R&D incentives in strategic sectors.
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| Governments can create a business-friendly environment focusing on a stable regulatory system, competitive labour laws and tax regimes that foster long term investment and inspire confidence.
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