Globalization Index, which was developed by the Economist Intelligence Unit for Ernst & Young to measure the 60 largest countries/ territories by GDP according to their degree of globalization. Among the respondents to the 2012 Globalization Survey, 433 were from developed markets and 297 from rapid-growth markets; of the latter group, 139 were from Brazil, Russia, India and China and 158 from other rapid-growth markets. Among the companies surveyed, the reported annual revenues were as follows: 23%, US$10 billion or more; 24%, US$1 billion to US$9.9 billion; 49%, US$100 million to US$999.9 million; and 4%, under US$4 million.
Globalization continues to define our business landscape, increasing the levels of cross-border trade, capital and labor integration.
A constant challenge for business leaders is to anticipate and interpret how globalization is changing, while understanding the opportunities and risks it creates. Although there may be little they can do to change global demographic shifts or capital flows, business leaders can react effectively to the forces of globalization or, even better, anticipate them to their advantage.
This latest edition of our annual globalization report clearly shows that globalization is evolving against a highly volatile economic backdrop. Although globalization continues, its pace has slowed from pre-recession levels and its nature has changed. Capital flows between East and West have become more evenly balanced and technology is now the key driver of globalization, promoting innovation across nations and cultures, regardless of location. By contrast, the globalization of talent is at an early stage, with skilled people clustered in some locations but scarce in others, and businesses everywhere struggling to match talented professionals with available positions.
Prospering in this globally integrated environment requires constant refinement of even the most sophisticated global business strategies. The businesses that will ride the next wave of economic growth will be those that understand the significance of globalization and tailor their strategies based on that understanding. They will explore new markets and establish well-rounded global business portfolios.
At Ernst & Young we recognize globalization as one of the defining issues of our time.
For many years, we have worked with the Economic Intelligence Unit to study globalization trends and support our clients in their attempts to understand these trends and the advantages and risks they present.
Our report, which is informed by the views of close to 800 global business leaders, looks at the most important elements of globalization for business.
The changing face of globalization will have a profound impact on the business landscape. It is now time for business leaders to respond with the flexibility, speed and unconventional thinking necessary to prosper in our increasingly connected world.
The changing face of globalization will present new challenges for companies in the coming years. Our research for this report, based on Ernst & Young’s 2012 Globalization Index and Survey, reveals a business landscape of uncertainty and ambiguity, set against a backdrop of slowing cross-border integration. In this uncertain world, companies will need to look for growth in new ways and from new places.
The trends and issues they must consider include the following: Globalization continues, but it’s differentthis time around. Although globalization — the cross-border integration of business — will continue in the years ahead, its pace will slow, with the financial crisis and subsequent recessions providing a tipping point. Trade, technology, culture, labor and capital will integrate at different rates across the 60 countries measured in the Index.
Companies must make “big bets” on markets they may not have considered before. To stimulate the global economy,head off competitors and ride the next waveof opportunities, businesses will need to beton markets or regions of the world that maynot be obvious choices today. This may meanconsidering not only rapid-growth marketsoutside Brazil, Russia, India and China (BRIC)but also developed markets, as well ascreating nuanced and customized strategiesfor different markets, sectors, areas, regions and countries. Taking “big bets” on carefullychosen markets, categories or technologies— those that match a business’s existingcompetencies — offers the best chance of securing a sustainable competitive advantage.
The BRICs are still reliable options — for now … For many multinational companies, Brazil, Russia, India and China were the big bets of the past decade. And there’s no question that these powerhouses will continue to be major players in the world economy. But as their growth slows over the next few years and their operating environments become more challenging, companies must look for additional engines of growth.
… But the momentum is shifting to other hot spots. Increasingly, non-BRIC rapid growth markets (such as Mexico, Turkey,
South Africa and Vietnam) are emerging as attractive locations for global business. Despite their risks, these markets are more globally integrated than the BRICs on a range of trade, investment, cultural and technological criteria, and in the past three years have improved markedly in terms of ease of doing business, infrastructure, government policies and labor productivity. In particular, several countries and regions in Africa are shaping up to be among the most dynamic parts of the world for investment.
You can find the entire study in the attached pdf document
