Growth: New global prospects for private companies

Private companies are broadening their horizons. Markets once thought too risky are now attracting private-company investment.

Where are private companies going?

Companies are going where demand is growing. Their top destinations are the BRICs: Brazil, Russia, India, and China. But they've also begun looking beyond those countries to seek business opportunities in a second set of rapidly ascending markets: Mexico, South Korea, Turkey, Poland, Indonesia, and South Africa.

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Where are private companies going?

Companies are going where demand is growing. Their top destinations are the BRICs: Brazil, Russia, India, and China. But they've also begun looking beyond those countries to seek business opportunities in a second set of rapidly ascending markets: Mexico, South Korea, Turkey, Poland, Indonesia, and South Africa.

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Why are they going there?

Growth opportunities top the reasons for going abroad (cited by 82% of survey participants). Despite the global downturn, companies’ performance in EFGMs over recent years has been significantly better than that of their home markets. Stay and stagnate, or go and grow? For most private-company executives, the answer is clear.

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What are the best opportunities?

The sale of goods and services is consistently ranked as the best business opportunity for private companies that are active in or eyeing EFGMs — followed by manufacturing and sourcing. Selling is the top opportunity even among many companies that characterize themselves as manufacturing enterprises.

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What are the top risks?

Surveyed private companies said the top risks for them in EFGMs are corruption, economic instability, poor corporate governance, poor infrastructure, political instability, and contract disputes. Of course, risks are not uniform across countries. Different countries present different risk profiles. Indonesia, Russia, and Mexico are widely cited for corruption; Indonesia and India for poor infrastructure; and China and Russia for contract disputes.

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How is the risk landscape changing?

Since 2002, according to the ratings developed by the Economist Intelligence Unit, the overall risk of operating in Brazil, Russia, and China — and all but four of the countries cited by survey respondents as destinations for foreign operations — has fallen (India's rating has remained the same). Some of the declines in risk were dramatic.

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Country Snapshots: Emerging and fast-growing markets (EFGMs)

We highlight five emerging and fast-growth markets, with a focus on opportunities and challenges that private companies should consider when looking to invest in each of those places:

  • Brazil
  • China
  • India
  • Indonesia
  • Mexico

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