Report reveals global executives’ growth plans

Straddling emerging and developed markets will be a huge test for businesses.

By Anna Rooke, OurWorld Editor

Global business leaders have a positive outlook for the future growth of their companies, according to a major annual survey.

Nine out of ten executives polled for the Economist Intelligence Unit’s CEO Briefing consider business prospects over the next three years to be either “good” or “very good”.

UK Trade & Investment has sponsored the annual survey of corporate priorities for the second year running.

Focus on Asia

Half the companies (52%) polled for the report believe that the greatest opportunity for revenue growth lies in Asia.

Nearly 60% of executives believe that they will invest more time and money in emerging markets than developed markets in the next three years.

European upturn

However, the report also shows that the European economies are experiencing a recovery.

Estimated growth of 2.4% in 2006 within the euro-13 countries was a marked increase on 2005.

While the rate of expansion is likely to slow to about 2% in 2007, the conditions are right for an average growth rate of just above 2% between 2007 and 2009.

The talent gap

The report looks at the challenges and risks for growth in both Eastern and Western economies.

A shortage of talent is one of the biggest problems that businesses will face in 2007.

“This is especially true in emerging markets, where one in two respondents identify a lack of available talent as the primary barrier to growth,” states the report.

Meanwhile, executives pinpoint high labour costs and market saturation as the biggest challenges they face in developed markets.

Top tactic – quality and innovation

Straddling emerging and developed markets will be a huge test for businesses.

Localising and differentiating products and services in individual markets is still seen as the key to success.

About three-quarters of survey respondents agree that their firms will differentiate themselves on quality in future, rather than cost.

“A race is under way for the high ground, as firms seek to differentiate themselves on brand, through better product or service quality, or by innovating in their field—or by a combination of these approaches,” concludes the report.