The World Economic Forum’s Outlook on the Global Agenda 2014 provided one of the more interesting numbers in international business recently: Firms in emerging economies accounted for 25% of the top 500 multinational corporations in 2012, with 127 out of the total. In 2003, a mere 9 years earlier, the percentage was 4% and the tally was 19 companies. Impressive.
These statistics beg many questions regarding changing landscapes for
- corporate competition
- supply chain connectivity
- (most importantly) opportunity
It is an exciting time as globalization matures and the rewards of economic development are felt outside the normal historic zones of commercial leadership.
Implications for Global Risk
Corporate executives, especially those focused on international operational risk, need to ensure that they have a broad and evolving perspective that includes the full spectrum of competition. Does your competitive analysis have the same cast of characters it did 5 years ago?
As the trend undoubtedly continues, the impact will begin to be felt more broadly as different cultures may introduce new practices for sales, marketing, R&D etc. Will these new practices be worth learning from, or will they introduce new risks when adopted by your partners and vendors?
In addition, the maturity and sophistication of risk management practices in North America and Europe may soon be perceived as a competitive advantage when compared to some of the less robust practices in emerging economies. Will their risk management practices give western multinational corporations a competitive advantage or prevent them from game-changing innovation?