Saturday , June 23, 2018

Emerging Economies Offer Great Business Opportunities

We know that 80 percent of global business activity is outside the United States, and that 82 percent of business growth occurs outside our borders. Furthermore, 95 percent of consumers are beyond the borders of our country.

 

Thinking globally, you might first look for opportunities in Mexico or Canada, or maybe even Europe or China because of their strong and growing economies. Perhaps you should re-think that  and instead examine emerging countries where you can have the most impact.

 

Emerging economies need so many things; they will likely have only increasing needs for products and services from the United States. They are seeking support and business strength to build infrastructure, energy systems, health care facilities, and educational programs.

 

At the same time, you have to determine how to use your limited resources and time. You can learn a lot from the experiences of others doing business outside the U.S. For example, Clifton Vann, CEO of Hyde Park Partners, provides significant insight into the opportunities in sub-Saharan Africa.

 

His business activity in Nigeria and Tanzania and other African nations is indicative of the opportunities that exist in the global marketplace. His company’s success even prompted him to to host the inaugural “Power Africa Charlotte” conference in the fall of 2014. He is working to hold an even larger conference in May of 2016 to educate other businesses to the openings for business growth.

 

One very important indicator for opportunity is population growth. Emerging countries face staggering population growth rates within just a few decades. As a benchmark, for a country to sustain itself at current population levels there must be a fertility rate of at least 2.10 babies per woman over her lifetime. In the United States, the current fertility rate is about 1.90. That is just below a replacement rate—and if that rate is maintained or lowered, the U.S. population is likely to decline absent immigration.

 

A brief survey of birth rates around the globe shows that most European countries are likely to decline in population because their fertility rate is not replacing the current population. For instance, Germany is among the lowest with a fertility rate of 1.44 per mother; Italy is at 1.49; the United Kingdom is at 1.90. Outside Europe, Russia is at 1.64 and Japan is among the lowest at 1.46. These numbers are likely to produce smaller populations over the next 50 to 100 years.

On the flip side of the fertility rate charts, Nigeria is among the highest at 5.25 per woman, Zambia is at 5.76 and Kenya is at 3.54. These nations and other similar countries will see rapid growth.

 

When you examine the impact of these numbers along with improvements in health care within each country, you can project population growth into the future. Europe is not likely to grow without immigration, China’s population will decline, but Africa is likely to grow rapidly as the economies within that continent improve their health care and diets. Where population is rapidly growing, there are even greater economic opportunities.

 

It is very interesting, and sometimes amusing, to discover the incentives offered by various countries to raise their fertility rates. Some nations have declared holidays so that couples will have more time procreate.

 

Russia has identified September 12th as the “Day of Conception” giving couples the day off from work to conceive babies. The government then rewards couples who “give birth to a patriot” during its June 12 festivities with money, cars, refrigerators and other prizes.

The French government provides tax and transportation breaks as well as child care and pre-school and health care benefits. Their package of incentives must be working because France now has the highest birth rate in Europe.

 

In Sweden, parents are given 18 months of government paid leave from their employment. In Spain and Italy, they are offering cash incentives—with one village offering $15,000 per child. In Great Britain, the government extended paid maternity leave from 26 to 39 weeks. The measure also allows fathers up to 26 weeks of unpaid paternity leave.

 

Denmark has even created a national campaign to have more babies. They call it, “Do It For Denmark!” View this amusing if somewhat risqué video to see their campaign: https://www.youtube.com/watch?t=12&v=vrO3TfJc9Qw.

 

An analysis of population growth will provide interesting information about likely business opportunities in foreign countries. It will also lead you to an understanding of the needs that a country is seeking to fulfill.

 

The Hyde Park Partners profile demonstrates one company opening a pathway to commerce with sub-Saharan Africa, which has enormous needs but also increasing resources to dedicate to procuring products and services addressing those needs. You may want to learn more. The opportunities are substantial and there are fewer competitors in these early stages of growth.

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