We put our heads together over here at Velocity Global to come up with a list of 10 items that we think will be hitting the headlines again and again in 2016 for international expansion and business. Also, check out global expansion tips from successful international executives and directors. Without further hesitation here they are:
1. China’s slowing growth
…will mean re-distributed investment opportunities. Countries that have recently relied on investment and trade from the PRC will be scrambling for alternative trading partners and private investment. This may transfer to Africa and Mexico.
2. Debt will become more expensive
…when interest rates rise, and this may be exacerbated in emerging markets. Companies realize they shouldn’t tie up their free cash in static infrastructure like legal entities across the globe, causing more of a push towards service-based solutions like FSaaS.
3. Communications improvements
…will continue to decrease the barriers of connection with international employment talent.
4. The US market will continue to expand
…while prolonged depressed commodity prices will create great employment cost arbitrages globally. This is critically important for US businesses that will continue to struggle to fill highly technical roles with domestic talent.
5. Developing Markets
…will continue to lead the GDP growth globally and represent the best ROI for investment opportunities.
6. Technology upsurge, specifically all things wireless/mobile/app
…in developing nations will continue to be a huge point of opportunity. These locations are bypassing traditional stepping stones in adoption and just going right to modern standards, so there are actually higher adoption percentages. Think M-Pesa and the direct to cellular phones/ satellite services versus using hard-lines in developing countries.
7. The sharing economy
…will become a more and more prevalent concept in international business. Concepts like Uber – a taxi company that owns no cars, AirBnB – a hotel that owns no buildings; this type of approach will find their way deeper and deeper into international business and all business for that matter.
8. Geopolitical tensions in the Middle East and North Africa
…will slow economic growth in certain parts the region (Israel, Turkey, Iraq, Syria, Afghanistan, and Egypt), and may result in companies shifting their resources to higher growth and more economically stable regions/countries. Further fallout may occur across some Eastern European countries as refugee/immigration concerns cause infighting and political unrest locally.
9. Russia’s economic troubles
…could destabilize the region from an economic and security standpoint. Companies should look closely at their investments in Russia however, there are some Eastern Bloc countries that are making a compelling case as business/tax hubs (i.e. Kazakhstan).
10. An overall slowing in Global GDP
…juxtaposed with a relatively strong US economy, means that international expansion opportunities will be plentiful. Many knee-jerk reactions by Fortune 500 companies to reduce exposure to slowing global markets means that opportunities abound for mid-market companies to strike while the giants are sleeping. Companies getting in early with an agile approach to these markets will see significant returns in the coming years.
Let us know if you have any questions about any of these topics and how they may affect your international expansion goals, we would be happy to talk.