Where do CEOs see opportunities for business growth
Discover how CEOs are navigating through the climate of uncertainty to find growth, and which markets – old and new - they’re targeting.
Video: CEOs on opportunities
Infographic: Pockets of opportunity
Many of the economies which have recovered after the 2008 crisis are poised to build on natural advantages and lessons learned. We've taken a look at economic data and forecasts to see what pockets of opportunity are bubbling up in 2013. Our growth projections for a cross-section of economies show the global growth leaderboard is changing.
China and India are still at the top among the fastest growing economies in the world. But growth for both is slowing down when comparing their projected growth to the historical three-year average. India is struggling with domestic reforms and China's exports have been hit by slower demand from global trade partners. By contrast, growth in Brazil and South Africa is accelerating when compared to their historical three-year average growth rates. The 2.4% annual growth rate in the US, the biggest economy, is accelerating but susceptible to disruption. For more predictions on the global economy, take a look at our January 2013 edition of Global Economy Watch.
CEOs are focusing on a few well-chosen initiatives, primarily in existing markets, to stimulate organic growth. They’re more wary about entering new markets or engaging in mergers and acquisitions, and diluting their resources too much.
At first glance, it might look as if CEOs are hunkering down and waiting for better times. But cutting costs for short-term survival while investing selectively to grow in the longer term is a strategy for resilience in tough times.
CEOs are continuing to keep their eye firmly on where the growth is – and not just in the usual places. It’s not surprising that half of CEOs’ top ten overseas markets are growth markets, nor that four of them are the BRIC economies. But Indonesia made the list for the first time this year, and newer growth markets like Mexico and Thailand aren’t far behind. A growing number of CEOs are also looking to Africa.
But CEOs aren’t ignoring mature economies. The US remains the second most important overseas market for CEOs, and all five of the mature markets in their top ten are growing, albeit susceptible to disruption. And some CEOs see pockets of opportunity even in the European countries that are struggling to grow.
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"There is so much growth and so many opportunities in this region that I think Asia is the place to be. And even though there are so many airlines wanting market share, I feel there is a lot of room in that market. I don’t see the growth ending any time soon."
"I think the Asian financial system learned from the 1998 crisis. Therefore, in terms of capital and liquidity, the starting position of Asia’s financial system is perhaps stronger than the systems in the West."
Piyush Gupta Chief Executive Officer and Director of DBS Group
"I’m very conscious of using that word ‘focus’. It’s about making sure we’re focused on what we can do; investors understand that, employees understand that and we’re pretty clear about where we can deliver value and we are disciplined about that."
"We would respond by “skating to where the puck is going” - that is, by following the global market as it evolves and develops. We try to make sure that we have flexibility such that we can easily change the emphasis of our business to go after those markets where the growth is."
"The world's fastest growing populations will be in Africa. And I needn’t remind you that, with the proper social conditions in place, population growth goes hand-in-hand with economic growth. As populations grow, economies tend to grow too - as long as there are sufficient resources to support the population growth."
Yasuchika Hasegawa President and Chief Executive Officer of Takeda Pharmaceutical Company Ltd.
"Natural gas prices in the US are currently one-third of what they are in Europe and one-fourth of what they are in Japan. That is a fantastic engine for the reindustrialisation of the US, which, in fact, is now taking place in my view."
Anders Nyrén President and Chief Executive Officer of Industrivärden AB
"In uncertain times like these, this balanced geographical diversification enables us to keep the company’s performance on an even keel and take advantage of growth avenues, wherever they may be."
"We focus our efforts on where we see growth. This includes Asia and America, at least for our products, and also some sectors in Europe. Europe overall may not grow much, but some countries and sectors will do well."
Yves Serra President and Chief Executive Officer of Georg Fischer Ltd.
"We have a good runway for growth. We’re watching many of our customers – the food and beverage multinationals – target the growing middle class all around the world, which has been estimated to rise by roughly a billion people over the next five to ten years."
Douglas D. Tough Chairman and Chief Executive Officer of International Flavors & Fragrances, Inc.
"We are going to focus our allocation of capital more tightly in the markets where we feel we have a competitive advantage and in particular segments within those markets."