UK businesses ignoring world’s fast growing economies are signing their death warrants
UK businesses are writing their own death
warrants by not capitalizing on opportunities to trade with the BRIC
countries (Brazil, Russia, India and China), which are the world's fastest
growing economies, according to Grant Thornton's International Business
Report (IBR).
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Far from being a threat, most of the
world's businesses are taking advantage of the rapid growth these counties
are experiencing. However, the UK has fallen amongst a small group of
countries who are proving to be the exception to the rule. Less
than half of UK businesses (46 percent) believed that globalization
presented an opportunity to their country, showcasing the ambivalent
attitude currently displayed by UK companies. This is in stark
contrast to the 82 percent of Indian businesses who believed that globalization
presented a significant opportunity for their country.
Looking specifically at the economic
expansion of the BRIC countries, UK business owners felt that over the
past few years they had very little impact on their own companies.
China had the most significant impact with a balance of +9 percent,
well up from the 2006 result of +1 percent, but still lagging behind
the EU average for 2007 of +14 percent. The impact of Russia's
expansion was ranked with a balance of +7 percent, followed by India
(+5 percent) and Brazil (+3 percent).
“UK businesses are burying their heads
in the sand by failing to make the most of the opportunities that the
expansion of the BRIC countries offers them,” says Anuj Chande, international
business partner at Grant Thornton. “It is little wonder that
their growth rates are lagging well behind their EU and global counterparts.”
“Combined, the BRIC countries are expected
to represent 44 percent of GDP by 2050. To remain competitive
in the future, companies have little choice but to act now and seize
the opportunities that the world's fastest growing economies presents,”
he continues.
Imports and exports
Importing goods from countries with lower
production costs can offer significant savings to businesses; but the
UK is failing to take advantage of the opportunities that importing
from the BRIC countries can offer. For example, 97 percent of
UK businesses do not and have no formal plans to start importing from
Russia, followed by 96 percent not planning on importing from Brazil,
89 percent ignoring importing opportunities from India and 79 percent
from China.
The report also highlighted that UK businesses
have no ambitions to export their goods and services to BRIC countries
as 94 percent do not or have no formal plans to export to Brazil, 91
percent have ignored Russia as an export destination, 90 percent have
forgotten the long standing ties we have with India and 87 percent have
failed to see the potential of China as a country to export to.
“I can scarcely believe that not only
are UK businesses missing out on these vital import and export opportunities,
but they also have no ambition to involve themselves with the fastest
growing economies in the world,” says Chande. “UK businesses of
this size can not afford to carry on this way and expect to prosper
in the long run. From our perspective, it's a no brainer.
Do business with these economies and the possibilities they can afford
are endless,” he concludes.
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5. Case studies and best practices.
6.
Key trends
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