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In the last few years, opportunities in emerging markets have been gaining increasing attention as companies look to diversify and consider new possibilities. These rapidly expanding economies have grown to represent over half of worldwide GDP, and major opportunities in emerging markets have seen then becoming magnets for foreign investments.
Top emerging markets are generally defined as those economies that are transitioning into developed status, characterized by having a unified currency, stock market and banking system. They are generally going through industrialization, while their rapid recent economic expansion has seen them become home to fast-growing populations of middle class consumers.
Although it can be difficult to enter some of these markets, assistance is available in the form of Employer Of Record (EOR) services, which can help you hire workers in emerging markets legally, safely and quickly. A good EOR provider will be aware of local issues and used to navigating bureaucracy on the ground.
If you are considering EOR opportunities in emerging markets, contact us for more information.
Which countries are emerging markets?
The key areas are South America, such as Chile or Colombia; the Middle East, including Egypt and the UAE; South East Asia such as Vietnam or Thailand and to the East of Europe, from Poland to Turkey. These four regions account for the vast majority of opportunities in emerging markets.
Certainly, companies from all over the world are seeking out valuable business opportunities in emerging markets, identifying a greater potential for success due to their rapid growth. While the regions above are developing now, sub-Saharan Africa is likely to be the next big thing in terms of opportunities in emerging markets.
However, these markets are vulnerable to certain risks, for example with security and political stability. While these countries are usually on the path to full industrialization and economic development, they are defined by not having completed the journey, so issues will persist. It’s important to remember that there are challenges as well as opportunities in emerging markets.
New consumers and a wide talent pool
Over the past decades, opportunities in emerging markets have often been connected to a rapidly growing population base. With improvements in healthcare and general quality of life, many key indicators of long life have been transformed. This means people living longer and contributing more to the local economy.
The OECD has estimated (.pdf) that middle-class spending in emerging economies will be much higher by 2030; going from 25% of global consumption in 2009 to almost 70% in the next 11 years. This represents a great opportunities in emerging markets for your business to acquire new consumers. Many goods and services have huge expansion possibilities as they have previously had limited demand.
But it’s not just about your customers. There are also opportunities in emerging markets to acquire talented workers for your global expansion project. Many countries have large pools of highly talented and well educated workers without a corresponding number of job vacancies for them to fill. With English being increasingly accepted as a global business language, communication won’t be an issue.
Emerging markets offer multiple advantages when it comes to international trade. For example, in Central America, many countries have access to both the Atlantic and Pacific Oceans, making them top strategic locations. In South America, meanwhile, Brazil is growing in importance as part of the BRICS bloc.
As the world economy becomes less centered on North America and Western Europe and increasingly multipolar, new strategic centers are growing in importance, such as the Middle East or West Africa. Language use too is different in smaller markets, and this is growing in importance. While English is used worldwide, having more strings to your communication bow is becoming an important point of differentiation.
If you want to take full advantage of the opportunities in emerging markets, it pays to identify the main trading alliances and the top exports of each emerging market. In South America, for example, the southern cone is brought together by the Conosur trading bloc, while most Eastern European countries are now in the EU. Mexico is becoming an important center for nearshoring, whereas the Philippines is highly regarded for call center outsourcing.
Economic, political and cultural instability
Emerging economies are exposed to various risks as they need to keep improving in terms of economic and political stability. While each individual area will have its own blend of issues, there are common threads that raise their heads repeatedly.
Tax complexity, bureaucracy and complex or unclear regulations are all common in less developed economies. This is often because there is a complex economic system whereby people are employed to manage and navigate the complexities of the rules. At its worst, this will also manifest in high levels of corruption.
It’s also possible that a country will have developed at a very fast rate and will still have some catching up to do in terms of regulatory frameworks. While these are developing, it may be unclear what the long-term implications will be. The same goes for infrastructure, both physical such as highways and ports and financial such as banking systems.
Finally, both security and stability are persistent issues in many developing countries. Especially outside of major urban conurbations, it may be necessary to consider hiring security staff. For longer-term projects, you may want to consider the chances of a coup or radical shift in political governance.
A partner for expanding your business into emerging markets
If you want to take advantage of opportunities in emerging markets, you need to understand the local culture, understand the language and get to know every regulation of your destination. For this reason, it is essential to partner with professionals.
With an international EOR specialist, you will have support from local experts who know exactly how the economic and political landscape works―particularly when it comes to hiring local talent. An international EOR specialist also makes it easier to visualize the panorama of opportunities in emerging markets.
Our network of international entities and trusted partners allows us to assit companies in over 100 countries worldwide, and our portfolio includes international PEO / EOR services, contractor hiring, and global talent acquisition to assist companies with finding direct hires.
Contact us to find out how we can assist you with opportunities in emerging markets.