Time to kick off my ‘starting 11’
From the first use of the term ‘BRICs’ in 2001 to the ‘Next 11’ and later the ‘CIVETS,’ economists the world over have become focused on which nations will dominate the 21st century to rival the already-established economic powerhouses.
Whilst the insights and forecasts of economists are without any doubt important, I believe there is no better barometer for economic potential than understanding where companies themselves are looking to expand - and why. Each year we run the BDO Ambition Survey, an analysis of the views and cross-border expansion plans of CFOs of mid-market companies. The Survey results give us a unique insight into the markets that are dominating the growth objectives of mid-sized players around the world.
As the European Football Championships kicked off last week, I started to think about which countries would be part of my own ‘starting 11’ - and which would be merely squad players.
Some markets would definitely be in the line up - China, the USA and Germany. As you would expect, these three nations dominated the expansion plans of the CFOs we spoke to in 2011. Along with these, it was India, the UK, Brazil, France, Russia, the UAE, Canada and Australia that made up the rest of the ‘movers and shakers’ team. The economies of each of these countries, whether traditional economic powerhouses or an emerging market, all hold great appeal for the investment plans of the CFOs that we interviewed.
I’ve just come back from our Sub Saharan Africa regional conference and have seen real growth there - in leaps and bounds. The economies of many African nations are seeing exponential growth – there is no doubt that aid provided by international donors has helped create the right environment for private investment. But let’s for sure not forget the growing importance of the natural resources available in a considerable number of African countries. Africa’s largest trading partner is, of course, China but it is interesting to note that investment by other nations, including India, Brazil, Turkey and Malaysia, are also helping fuel the economy in the continent as a whole.
What is clear is that the economies of many African nations, in the way that ASEAN nations did before them, hold real potential for foreign investment and economic growth. In our 2011 Survey, one CFO commented that South Africa is seen by many companies as a hub to access Africa. I agree, and will be particularly interested to read the results of our 2012 Ambition Survey to see if more companies have jumped on the bandwagon.
Unfortunately, political and social instability in some nations is proving a barrier to widespread international investment. Whilst it is hard to predict how African economies will perform in 2012 - or 2020 for that matter - what I do know is that wherever our clients will be, BDO will follow, providing a tailored service approach to our clients that reflects local market cultures. In the last year alone, we have expanded into Kuwait, Barbados, Macedonia, Montenegro and most recently, Puerto Rico. We’ve also extended our presence in Malaysia to include Myanmar and Brunei Darussalam.
I’ll be watching with interest this year to see how my ‘starting 11’ perform and I won’t be surprised if several substitutes emerge before the year is out, clamouring for their place. Meanwhile, as with the Euro Championships, I remain optimistic for an interesting tournament - the Netherlands results were something of a surprise, but no doubt there’ll be a few more along along the way.