With the exponential rise in globalization, it has become difficult for a company to thrive without a significant global presence. Most companies are considering investment in the developing economies. The three countries that have shown significant economic growth in the recent past are; India, Brazil, and China. This article would include a brief evaluation of the economic, social, and technological environment of these countries.
India is one of those economies in the world that have shown an exponential rise in economic development in a very short period of time. A number of companies with significant global presence are establishing their operations in India. There are a number of factors that have influenced the pace of economic development in India. Some of those factors include; availability of skilled labor at a reasonable price, availability of resources, and a welcoming attitude to foreign investments.
Indian economy is growing at a rapid pace therefore the economic environment of the country can help a business earn higher revenues. Indian economy is very friendly to foreign investment and there are potential tax credits available for the international businesses. The human resource available in India is skilled and easily available.
Despite the advantages, there are some disadvantages as well. Indian culture may be one of the hindrances in the way of an effective acquisition. Indian culture is significantly different from that of the West. There may be barriers to free flow of communication due to the differences in the business environment as well. Another disadvantage is that the salaries of the human resources are likely to rise due to the economic growth and this may result in a rise in operational costs. There is also high risk related to exchange rate as the exchange rate of the currencies keep fluctuating frequently and this may cause a hindrance in keeping track of the actual financial position of the acquired company.
Brazil is also one of the emerging economies in the world and in the recent past, it has shown an outward attitude. This is the reason why it has grown significantly in a very short period of time. The positive changes in the economic policies in Brazil have led a number of multinational companies to investment in Brazil.
The factors that make Brazil an optimum choice for investment are somewhat similar to that of the other developing countries, i.e. skilled labor at a competitive price, feasible economic policies, rapid economic growth, and potential for global expansion. The factor that makes Brazil different from other country choices here is its geographic location and culture.
The pace at which the economy of China has grown in the recent past is plausible. China has become a hub for the manufacturing facilities of all the major electronic companies in the world. The reason behind this significant investment in China is due to the availability of labor at a very competitive price. One of the major companies to have its substantial operations in China is Apple Inc.
China has a very feasible economic environment and it is home to a number of potential electronic companies with global operations. Although the political and business environments of both the countries are different, the recent trend has proved that companies based in US can easily benefit by investing in China.
Therefore, it can be concluded that investment in growing economies can get businesses on the fast-track to global presence, and the potential countries for international business expansion include the developing economies such as; India, Brazil, and China.