In today’s global markets, the ‘think global, act local’ philosophy has more relevance than ever for the owners and directors of small business, particularly in Australia.
One of the greatest influences and opportunities for business and investment now and for the next 50 years or more will be the emergence of the ‘BRIC’ countries – specifically Brazil, Russia, India and China, but also known as the “Big Rapidly Industrialising Countries” of this century.
Just as Britain grew to dominance during the industrial revolution of the 1800s and the US during the 1900s, this century will, and is already seeing, the emergence of the BRIC countries as the dominant economic players. Most economists agree that over the next 30 years (if not before) China and India will overtake America to become the two largest global economies, with Russia and Brazil not far behind, not to mention the rising economic influence of emerging regions such as the Middle East, South Africa, East Europe, Latin America and South East Asia.
Its going to become increasingly important for all business leaders, entrepreneurs and owners to properly understand these new countries, so that deciding whether or not to do business with these countries is a considered, rational progression – not a blind leap of faith!
Each of the BRIC and other industrialising countries is combating the current global economic slowdown and the collapse of their exports to the developed world by focusing on any or all of the following:
- Stimulating their local economies by investing in infrastructure, transport, industry (particularly IT), housing and the environment. China and Brazil have already announced stimulus packages of over A$900bn and A$500bn respectively!
- Encouraging domestic consumption by offering a range of incentives, discounts, tax breaks, loans and other measures to increase the sale of domestic and foreign products and services. For example, passenger car sales in China, a common barometer used to measure the health of domestic consumption, rose 48% in June 2009 compared to the same month in 2008. A sharp contrast to the experience of the more developed countries.
- Trading amongst themselves. In 2009 we saw the announcement of major deals between China and Russia (providing access to Chinese capital in return for supplies of Russia oil and gas), China and Brazil (Brazilian exports of iron ore and commodities) and India and Russia (energy and aircraft).
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Whilst these countries are building the first class hardware such as roads, railways, airports, buildings, waterways, bridges and tunnels, to support their rapidly industrialising economies, they also need software (i.e. the professional services, training, education, technology, creativity, design and leadership) that makes the difference between “third world” and “world class”. It’s in these areas that Australian businesses of all sizes can derive the most opportunities.
Australian small businesses compete in a tough, small, complex, competitive and geographically challenging environment. To survive, succeed and prosper we have to be dynamic, entrepreneurial and creative, and we have to offer products, services and expertise that are amongst the best available anywhere in the world.
However, whilst many of our credential and capabilities are the envy of the developing world, we often lose out to the US, UK and Europe when it comes to playing the global game of investment, trade and exports.
You don’t have to be a big company to succeed offshore. In fact, you can tap into many opportunities in emerging countries without leaving home. The starting point is to become more aware of what’s happening offshore, what skills, services and expertise are in demand globally, how different countries operate and how you can participate without taking your eye off the ball at home.
There are amazing opportunities for Aussie small businesses to get involved and ‘think global, act local’, and in future articles, we will explore some of these. I hope to open your mind to new ideas and possibilities. You even make you some money!
In the meantime, be sure to give us your comments, feedback and suggestions so we can share the exact information you want and enable your business to take part in the new global game.
For further reading, check out my presentation from Flying Solo Live! called Follow the money to global opportunities.