British business must continue to seek out opportunities in emerging markets as new research highlights that many continue to outperform the economies of developed nations, Business Secretary Lord Mandelson said today.
Addressing the Economist Intelligence Unit's Emerging Markets Summit this morning, the Secretary of State revealed the findings of a new report which examines global business attitudes to emerging markets in light of the global downturn.
"UK businesses should be strategic about their exports and plan for the long-term. Many emerging markets are outperforming developed economies, and are expected to grow strongly for years to come. This represents an exciting opportunity for UK business providing greater diversity for the exporter." Lord Mandelson said.
Commissioned by UK Trade & Investment, the ‘Survive and Prosper: emerging markets in the global recession' report, gives fresh insights into the opportunities and longer-term strategic importance offered by emerging economies.
It is based on a survey of more than 540 high level business executives from across 19 business sectors; over 40 per cent of those interviewed worked for companies headquartered in emerging markets.
Key findings include:
- 77 per cent of companies expect the prospects for the global economy to improve in 2010-11.
- Despite the economic downturn, emerging markets support global profitability.
- Emerging market economies, on the back of the continued high growth and market size of China and India, have outperformed those of developed countries in 2009.
- Sixty percent of companies surveyed expected to derive more than 20 per cent of their total revenues from emerging markets in five years' time - almost double the current figure of 31 per cent.
- China was cited as the preferred investment destination over the next year and beyond by most respondents (45 per cent) followed closely by India (43 per cent) and other Asian nations (35 per cent).
- Political risk (including the risk of nationalisation and expropriation) was cited by 50 per cent of survey respondents as the greatest government-related obstacle to doing business in emerging markets.
Commenting on the research Lord Mandelson said:
"The global recession was a wake-up call for companies to diversify their export base and seek out new opportunities in the emerging world. UK business needs to adapt its strategy accordingly to reap long term rewards."
The report is part of a wider push by UK Trade & Investment to raise awareness about the potential trade and investment opportunities for British companies in high growth markets.
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