Examining The Driving Forces Behind The Changing Global Business Scenario

The recent recession and inflation period has affected economies all over the globe with the international financial system remaining highly fragile during 2010. In today’s era of integrative globalization, an impact on any economy has a direct and relevant effect on all economies. It is this inter-connectivity between the components of the various economies that will compel them to work in synergy with each other in the coming times. International trade has further strengthened the dependency of individual economies on current financial stability for the global economics realm. However, economies are working towards recovering their position with rapid growth being evident, especially in the regions that have been targeted as emerging markets. Lets have a look at some of the key trends that are expected to have a long lasting impact on the global business scenario.

Transformation Holds the Key to Successful Recovery for The Global Banking Industry:

The prominent financial crisis that occurred recently may have caused a global uproar but in reality, most financial institutions from emerging markets managed to overcome it without much difficulty. The impact of outcomes for regulators as well as global financial institutions has mutual patterns wherein the regulators have been known to lay more emphasis on the existence of systemic risks posed by major names in the global finance industry while the banks have concerns over their ability to manage the oncoming competition dynamics along with the possible impact of regulations made on returns. Current statistics hold insufficient grounds for determining the final structure of the global framework for financial regulations. However, the changes that hold probability of occurrence include:

  • Corporate governance would experience heightened levels.
  • Consumer protection policies as well as initiatives would be strengthened.
  • Executive pay schemes are expected to be limited in keeping with current financial statistics.
  • Over the counter derivatives would witness greater regulations and increased transparency.

As is the general consideration that developed countries hold higher prospects of maintaining stability during economic recessions and financial crises, current statistics reveal that while financial institutions in the developed countries are striving for effective recovery, those in emerging markets are exhibiting better recovery results with most of the financial institutions overcoming the crisis with hardly any hiccups. However, in light of enhanced and revised regulatory frameworks, the cost of business would most likely hit a new high for most large financial institutions.

Global Workforce Expected to be Transformed Due to Demographic Shifts:

One of the most notable occurrences to have marked the current era is the dearth of potential candidates for employment opportunities despite the growing population numbers being witnessed on a global scale. Statistics indicate that almost 31% of employers throughout the globe are faced with the issue of dearth of required talent in the market due to which recruitment has become quite tedious. Demographic shifts have been credited with being the driving factor behind the recruitment issues. The problem of fewer talents in the population pool is not due to less population numbers. In fact the problem may be attributed to the evident decline in working age of the population in various regions. This in turn has caused the condition to worsen with a statistical probability of the labor gap becoming 8.3 million by the year 2030.. It would be wise to consider the gradient at which the issue is currently escalating instead of focusing on the current gap which is only 200,000.

There may be scope for profits from a larger segment of the population at retirement age, but there is also a major concern regarding the availability of new population members from the talent pool who are required to replace the retiring working population. Emerging countries like Brazil, Indonesia and Mexico have labor forces comprising of younger members of their demographics. While this may seem to provide benefit arising from increase in productivity, demographic dividend and growth, the only way in which success may be ensured is to provide the youth with economic as well as educational opportunities in the right form and at the right time. Only then will they be able to prepare themselves to manage the business scenario of their region in the years to come. One of the major complications arising out of the dearth of proper educational provisions is the reduction in the talent pool due to which the population members are unable to meet the rising talent and skill requisites. The need of the hour is to promote educational opportunities in all regions globally with emphasis on awareness being made about changing skill requisites as well as sophistication.

Women may prove to be major players in the future recruitment efforts as their empowerment and increased acceptance of women as an equal entity in social circles would ensure that they be considered for job opportunities. However, the decrease in talent pool in the population of various regions has led to employees gaining bargaining power. In light of these changes, it is pretty evident that in the near future, the workplace in organizations would be defined by the priorities of the employees themselves instead of being defined by the perceptions of the employer. The most appropriate solution for organizations to manage these changes is to work towards engaging and re-engaging the experienced segment of their acquired talent. Those who fail to keep up with these changes may very well lose the power to attract, retain and even develop the required talent which would be a direct result of the failure to define their EVP (Employee Value Proposition).

Going Green Would Prove to be Major Leverage:

The efforts for reducing carbon footprint can be seen extensively in all economies with various organizations striving hard to achieve and maintain greener policies. This green approach for creating a resource-efficiency economy may well be the precursor to the next major industrial revolution and in the long term may also churn out financial benefits in addition to the obvious environmental benefits. There is no stopping the transformation and inclination towards green technologies, so the only recourse available to organizations is to rework their strategies and come up with contingent measures to ensure that they maintain compatibility with the changing trends. Even statistics have gone ahead to reveal the rapid growth of investors in green technology with with the investments surging to 243 billion USD as reported by Bloomberg New Energy Finance. This is staggering 30% increase from the previous year and almost 5 times more than the figures calculated for 2004.

Despite these investments, there is a significant gap which exists between the required capital to fund the widespread implementation of green technologies and the available financial capabilities for meeting the requirements that are crucial for sustaining the transition being made towards low carbon economies. If current figures and data are to be considered, the energy demand would grow by approximately 36% over the period 2019 – 2035. The majority of the demands (estimated at 93%) is expected to emanate from the emerging markets.

If predictions by the International Energy Agency (IEA) were to be considered, then the period 201 to 2035 would experience the increase in renewable resource based power generation by 300%. Nuclear power and natural gas are major components of the “future energy mix” which is expected to gain prominence in the coming years in place of fossil fuel that would lose its market share gradually. While renewable energy is still available at high costs in most places, the prices would see a decrease as soon as solar and wind energy projects achieve successful completion. More than mere provision of green sources, it is the awareness of its implications which holds greater significance as people would be required to adapt to the changing technologies. As of now, the use of natural gas appears to be transition aiding component that is bridging the gap between the use of traditional fuels and the use of renewable energy sources.

If the business aspect of the implications of renewable energy were to be considered, then resorting to green methods would not only enhance the usage of resources but it would also bring visible cost benefits in the long run. The raw materials required in the production of a large number of products are not available in unlimited quantity and with the stringent rejection of raw materials owing to non-compliance with quality standards, the need for going green seems to be the only recourse in the current economic scenario. Such concerns revolving around resource utilization are expected to bring about an increased demand for organizations to prove their business’s adherence to sustainable practices. Sustainability reporting as of now is only voluntary and is mainly used to encourage organizations and businesses to declare their socio-environmental impact. However, the tides may turn pretty soon in light of the various developments being made due to which sustainability reporting may no longer be a choice, it would become a mandatory component of public declarations for all businesses.

Emerging Markets Would Increase their Power in the Global Scenario:

Emerging markets have become the global hub for aids that drive economic growth and may well become the key drivers of global growth. Earlier considered to be lucrative places for obtaining natural resources, cheap labor and inexpensive manufacturing, the emerging markets have achieved the status of becoming major players in the global competitive landscape. If we take into consideration the current statistics and figures of growth and economic development, then it is safe to estimate that the coming years would exhibit a 70% global growth with almost 40% of the growth being contributed by China and India. The IMF has expressed that the performance of the emerging markets could outperform the developed economies in terms of GDP and Purchasing Power Parity by as early as 2014. This is an impressive performance by the emerging economies which is further strengthened by the fact that they account for nearly 50% of global FDI inflows and 25% outflows.

One of the fastest growing trends that has been witnessed over the past decade is the emergence of new leaders in emerging markets that not only provide critical competition in home grounds but are also making substantial outbound investments in other economies. These power giants would eventually become a disruptive force in the global arena with stiff competition being provided to others. The key driving force which enables companies from emerging markets to come up with cost effective and innovative designs to products stems from the fact that the local markets in which they operate are more than often deprived of convenient facilities. This means that they need to work with whatever they have and with whatever they can manage with. The outcome of operating with such limited support systems is the emergence of an entrepreneurial culture that is infused with innovation in strategic implementation and greater flexibility in adapting to the demands of their customers. One of the most profound examples of this is the Nano, manufactured by Tata Motors, India. This car is priced at USD 2,900 internationally which is less than 50% of the costs of any automobile in the world. The mere presence of this car in the global market goes on to speak loads about the progress being made by businesses in emerging economies and markets.

Another key factor to be considered is the estimated growth in population numbers which would not only add to the customer base but would also result in the increase in the combined purchasing power of the middle class segment of the population to more than USD 56 trillion by the year 2050. These estimates represent global implications wherein the majority of the demand (more than 80% estimated) emanating from the Asian countries. In keeping with the expected as well as the current changes, there would be immense requisites for developing or upgrading the physical and soft infrastructure so as to accommodate the demands of the increasing numbers of urban middle class members.

While emerging markets seem to be getting prominence in the global business scenario, it would be wrong to interpret their presence on the international forefront as being the only ones to be able to reap the benefits. The developments in emerging countries have helped to escalate the position of middle class members in their own regions which in turn have become lucrative new markets for developed countries.

Rapid Developments in Technology Innovation Will Drive Mobility Trends:

The past decade has witnessed drastic advancements in the digital domain with this revolution giving birth to new technologies that have helped to define new approaches to business as well as individual needs. Interconnectivity has become the success mantra with the boundaries becoming non-existent as more people are connected through global communication systems. Current technologies are smart, dynamic and is capable of providing support for various applications. However, the expected levels of technical sophistication is still awaiting achievement. While customers desire powerful devices with impeccable applications, businesses prefer to possess and develop cost effective technological solutions that would help them to cope up with complex technical challenges.

The presence of analytical tools made more feasible with its integration with global internet communication systems has enabled businesses to evaluate their performance dynamically. Now they are able to see their levels of interaction with customers with their responses forming the base of the analysis conducted. Social networks have further increased the need for adding storage to the systems due to the fact that they have contributed to the creation as well as sharing of data throughout the world. Research studies estimate data storage requirements to go up to 35 trillion GB by 2020 itself. This requisite represents an increase of more than 40% for our current storage capabilities. With such capabilities it is but obvious for business intelligence to gain importance as being one of the key determinants of strategic decision making processes.

Smart devices (phones and tablets in majority) have become an integral part of our lives. The reason behind their widespread popularity may be attributed to high levels of portability offered by them. In simple terms, the possibility of remaining connected even while being on the move has brought into effect a whole new level of convenience that is playing a key role in redefining the way in which social connectivity and business communication is maintained. As is evident in other sectors, emerging markets will pose stiff competition mainly due to the fact that the absence of legacy systems will lead to faster profit generation from the integration of new technologies whenever they are made available.

The developments in mobility solutions and the integration of global technological systems would lead to the convergence of industrial realms where the differences in geographical boundaries, industries, products, demographics and economies would become blurred. Advancements in e-commerce facilities have literally brought about the transition of markets from being physical establishments to virtual hot-spots. This does not indicate that physical markets have become non-existent, it is only the approach that has been shifted to the virtual domain by means of which businesses are able to make their presence felt on the global platform. In keeping with these trends, it is not wrong to expect web semantics in the near future to provide the perfect amalgamation of web, machines and human beings.

Cloud computing in another key aspect of mobility solutions which enables dynamic working capabilities over the net with access being granted to multiple users. Since cloud computing offers dynamic access to data, simultaneous work capabilities are provided to the users even for a single file. Forecasts made by Gartner state that social networks would account for the primary business communication protocol for more than 20% of global employee strength. Governments are also joining in on this race for technological supremacy wherein they are not only providing the funds for the development of the required infrastructure, but they are also concerning themselves with the establishment of appropriate legislations by means of which the privacy of the users may be ensured.

Governments Expected to Enhance Cooperative Efforts With the Public Sector:

The post crisis scenario at the global level is marked by adjustments being made as major entities inclusive of governments, institutions and business organizations are working towards redefining their identity. While the economic recession has no major impact on the emerging markets, they are nonetheless left with the requirement of developing as well as upgrading their infrastructure and educational systems for being able to cope up with the increasing demands of the new middle class population. In light of these needs, the governments all over the globe are faced with the requirement for strengthening their financial position and securing their current levels of financial integrity. Additionally they are required to ensure the delivery of services not only in an efficient and effective manner, but the services also need to be made economic in nature to fully obtain their benefits. The private sector holds significance for any economy owing to its contribution levels in the growth and development of the respective region. The growth of the public sector needs to be done in an economic manner for sustainability and generation of employment opportunities.

The efforts of the government are clearly visible in the following initiatives:

  • In light of the rising debt-GDP ratios, there are immense efforts being made by the developed countries for reducing these values and organizing their finances.

  • Emerging markets possessing adequate surplus need to invest it for developing an effective safety nest for sustaining as well as promoting economic growth. The importance of safety nets in the economy may be judged from the fact that in certain markets, economic prosperity cannot be assured without their presence.

  • The investments made by the Tax Administration authorities of emerging markets also need to be improved such that the investments make their way into the right sectors in the right form and at the right time. PPP (Public Private Partnerships) are most likely to become major investment drivers in such markets.

  • Studies conducted by Standard & Poor indicate that public spending for developed economies with respect to median age is expected to rise from just over 17% of GDP in current times to over 27% of GDP in 2050. Emerging markets, however, reflect much less variations in these values with the change expected to be from 11% to 17%. Median age related spending, in addition to immigration, would affect future government spending in a significant manner.

  • Sovereign Wealth Funds are expected to become one of the most powerful sources for availing capital in the near future. Despite the drop in their valuation in light of the recent recession, their value is expected to increase over the years from USD 3.5 trillion as per 2010 data to more than USD 8 trillion as estimated for 2015.

  • State owned enterprises will continue to be popular means of safeguarding strategic industries and also assuring adequacy of critical infrastructure in most regions.

Globalization Among Technology: How Is International Business Affected?

Have you ever considered where your phone or computer came from? Each individual piece of the device takes work in production and assembly. There are many products that are made domestically, but the vast number of companies transferring their products to be produced in other countries is growing every day due to the expected profit increases. This is an example of globalization. Specifically, companies like Apple can produce their phones, computers and tablets in foreign countries for significantly less money than it takes to produce them domestically in the United States. New technology in companies such as Apple has allowed globalization to result in a negative effect on global business through factors such as location, consumers and competing organizations. Yes, international factories can produce parts inexpensively, but at what cost to global business?

The consumer is the main reason that businesses become successful. Without the consumer, companies would be wasting precious resources and capital to produce products or services that are not purchased. People around the world have become so mesmerized with Apple products that they spend outrageous amounts of money on them. The cost of these products does not change despite the country it is being sold in. However, if the consumer cannot afford the product, they cannot buy the product. This is especially true for those living in the United States if businesses like Apple, among many others, are moving their jobs overseas. Similarly, in foreign countries, those businesses producing the technology are being paid pennies on the dollar. This results in poor wages for the workers and the inability to buy products, in turn. Thus, expanding the technology internationally through globalization has a negative effect on the company through the volume of purchases by consumers.

Many companies initially manufactured their products domestically. The desire for greater return on investment has lured more companies to consider or commit to expanding these tasks internationally through globalization. Potential new businesses in America are not looking into manufacturing or creating new products domestically because they fear they will not be able to compete with international rivals or companies utilizing outsourcing. In result, this may be too much expansion occurring too quickly for a new business, and it could backfire greatly on their profits. Lack of opportunity to produce domestically has also lowered the amount of jobs and taken funds away from the economy in many ways. By not creating the physical product, but still consuming it in the United States, the economy is still essentially receiving the taxes from the creation or sale of the good. However, the economy is missing out on income taxes collected from factory employees, as well as money that those same workers would be spending to stimulate our economy if their job was not outsourced. This means that there will be less money spent by consumers on products that companies like Apple produce.

On the other hand, globalization in technology has negative effects internationally, too. This proceeds into affecting business on a global scale. As stated earlier, companies receive pennies on the dollar for the products they produce, which results in poor working conditions and wages for people employed in these jobs. Poor wages for workers is directly correlated to the inability to buy non-essential items such as iPads, MacBooks or iPhones. So, by utilizing globalization, Apple is technically limiting the number of products that they will sell. Continuing this thought, it is well-known that an alarming number of factory workers for Apple have committed suicide due to exhaustion in their situations. A negative stigma and reputation could be associated with Apple for the reasons behind this, causing additional units to not be purchased. This would be all thanks to the initial effects of globalization, and illustrates how complicated the issues caused by globalization can be.

Competing companies are also affected by globalization of technology. For example, when Company One sends the manufacturing of their products abroad, there are many negative impacts on similar businesses. There are missed sales opportunities for other companies because Company One is able to sell their product for significantly less due to domination in the market in consumer interest. The consumer seeks cheaper items with available supply. The supply tends to be greater because larger manufacturers can supply more product for less, driving the demand up even more. Company One is unable to be competed with because their cost to bring the product to market is significantly less.

The effects of globalization on business are so severe that more emphasis needs to be placed on the discussion of pros and cons when making a decision of outsourcing a company. Although it may bring a company more profit, they should consider what lengths they are willing to go to achieve this goal. They should deliberate the effects of globalization on their home country as well as international countries. While outsourcing may be positive for themselves, low wages, poor work conditions and deteriorating mental health are terrible repercussions for workers abroad. Likewise, the negative effects one one’s own economy and competitors should be considered. Money that should be stimulating and circulating through one’s own economy is now in another country. Additionally, competitors in the same industry will have trouble keeping up, and could be forced to cease business. Neither of these factors are positive for one’s country. Finally, the most important point about globalization would be the long-term effects on global business. Higher profits may be seen initially, but overall, globalization affects the consumer and all countries involved so much that sales volume will likely decrease as time passes. This blatantly cancels out the main goal of globalization for a company in the first place.

Don’t Just Rely on SEO, YouTube and Google Translate to Access Global Markets

As more parts of the world become receptive to new technologies and state censorship and cultural taboos give way to more a more globally receptive attitude toward online content, huge new areas of the market are made available to savvy businesses.

Tools such as Google Translate and YouTube offer a free and easy way to communicate ideas across language barriers but neither is a fool proof means of doing so, and misuse of these mediums may do more harm than good. Google Translate is a long way from being 100% accurate and although flashy graphics and smiling faces in YouTube videos can communicate ideas across language barriers, they don’t necessarily translate across cultural barriers. Consider the cultural connotations of a young business woman in a skirt enjoying a glass of champagne in the office, to some Westerners this is an image associated with success and gender equality in the work place, but it could be culturally alienating to potential customers in the Middle East.

Just relying on SEO isn’t good enough either. Being top of the Google rankings doesn’t guarantee optimum access to global markets. Google isn’t the top search engine in every country; in Russia it’s Yandex, in China it’s Baidu. And users using auto-translate software in those regions may not even be able to tell what your product is let alone whether it’s reliable or suitable.

The first thing you need to do is identify your market. Check where your traffic is coming from and try to understand why that area of the market is interested in your product. When you have identified the target demographic then you can safely say that it is worth addressing them directly and in a fully professional manner. You need to hire professionals for effective localization services. Translation services aren’t just about translating websites word for word; they involve thorough consideration of cultural differences and the intended meaning of the source language text. Language professionals are not only linguistically competent in the languages they work in, but are also familiar with the cultures from which those languages came and are therefore able to optimise your website or promotional material to a standard that no software can come close to.

If you are serious about expanding your business abroad then you have to be serious about translation services and not be willing to settle for mediocre alternatives.

So whether you need localisation or internationalization services for your site, get in touch with a translation agency for professional translation services today.

The Benefits of Using Social Networking Sites for Global Marketing

Social networks are not a fad. They have become ingrained in our Internet culture. The most popular and innovative social networks today, Facebook, Twitter, and LinkedIn, offer great international exposure. Not only do these networks connect people to each other, but also connect people to the brands and companies they are interested in. Nielsen, a global consumer research company, published stats showing that “the world’s most popular brands online are social-media related and the world now spends over 110 billion minutes on social networks and blog sites. For the first time ever, social network or blog sites are visited by three-quarters of global consumers who go online. The average visitor spends 66% more time on these sites than [in 2009], almost 6 hours in April 2010 versus 3 hours, 31 minutes [in 2009] (Nielsen, June, 2010).”

As more people are moving away from the TV and technological innovations are making it earlier to have Internet access anywhere, people are looking to social networks for information, entertainment, and business endeavors. Social networking is thus the perfect avenue through which businesses can target new domestic and international clients and build-up a reputable company image.


Facebook is the most popular social network, with 500 million users worldwide. About 70% of Facebook users are outside the United States and Facebook users spend over 700 billion minutes per month on Facebook (Facebook Statistics, 2011). The amount of Facebook users worldwide has grown 56.7% over the past year. The top five countries with the highest growth percentage, in decreasing order, are Russia with 377.2% growth, Brazil with 286.3% growth, Thailand with 206.7% growth, India with 196.2% growth, and Poland with 166.2% growth (Inside Facebook Gold, 2011). Three of those countries are BRIC countries. This signifies that social networking is growing the fastest in the fastest economically developing countries. This correlation is promising to companies wishing to expand internationally. Having a Facebook profile can expose your company or brand to potential clients in the next state over or emerging markets scattered around the world.


Twitter is a tool for posting very short comments that people whom you are connected to can read. Twitter was designed to be very compatible with mobile phones through text messages, so that users can update and be updated anywhere, anytime. Twitter is great for marketing because it allows small business owners to update their market on the latest happenings of the company, such as upcoming PR events, seminars, conferences, or new blog articles.

Twitter actually has a 140 character per update limit, so messages are always short and sweet to engage your clients. Sysomos, a social media monitoring company, launched a 2010 report about global usage of Twitter, stating, “the number of U.S. unique users was 50.8%, a sharp drop from 62.1% in June. This suggests the use of Twitter outside the U.S. has experienced significant growth over the past six months (Sysomos, January, 2010).” So, from the back of a taxi in New York on your Blackberry, you can send out an update that will reach thousands of followers around the world.


To undertake serious marketing promotional venture, look towards the more business-oriented community of LinkedIn for business success. LinkedIn is an ideal platform for developing and maintaining business relationships, and this is a great way to improve your B2B and B2C marketing strategy. LinkedIn makes it easy for entrepreneurs and start-up founders to mingle with other like-minded individuals because it allows users to form groups where they can communicate and share advice/experiences on common business interests. In this network you can expose your business and gain followers, potential clients and even potential employees.

In October 2009, LinkedIn’s network’s CEO, Jeff Weiner, said, “half of LinkedIn’s membership is international (TechCrunch, February, 2011).” If you want to expand your business into Egypt, you can make an ad campaign that specifically targets other LinkedIn users in Egypt who are interested in your particular product or service. You can also receive advice from a businessman in Egypt on how to successfully expand your business in the country. The opportunities are endless and inspiring.

Take advantage of the innovative marketing techniques that these social networks have to offer to small business owners. Leverage the notion of online relationships and credibility and boost your international marketing efforts in ways that will generate noticeable results.