Since the turn of the century, globalisation has become one of the key aspects in any form of business. The business landscape worldwide has been changing continuously. Globalisation has improved and kept communication at a high standard and increasing the mobility of individuals. This had gradually led to standardisation in companies' products and services, as well as consumer preferences. The rise of competition between companies is dominating the landscape and often helps the consumer though quality improvement, accountability and customer support. However, it can also work to their detriment through product quality, distribution and pricing. The competition also exists between countries fighting to become global hubs for business, such as Singapore, already a major economic hub in Southeast Asia, reforming their laws to encourage mobile entrepreneurs.
The financial services and investments industry accounts for 20% of all mobile entrepreneurs, making it the largest industry. There are also significant proportions coming from technology and telecommunications (14.8%), media (7.1%) and retail, fashion and luxury goods (6.1%). The technology arena is forecast to account for a larger share as executives begin to exploit opportunities offered by advancements in technology.
Go deeper with GlobalData
Establishing a business in a country is dependent on several factors: regulatory restrictions, tax laws, immigration policies, cultural factor and the availability of resources. Mature developed countries, such as the United Kingdom and the United States, are preferred countries for immigrant entrepreneurs and leads to considerably higher populations of entrepreneurs than in other countries.
Regional differences
Two of the major conflicts when considering globalisation and mobile entrepreneurs are immigration and taxation laws in certain countries. They can be prime obstacles when entering new markets. As a result, countries are attempting to reduce their negative impact by relaxing said laws. Countries such as Chile, Canada, the UK and France have taken steps to ensure the arrival of entrepreneurs to establish new business. For example, Chile and Canada have introduced start-up visas to attract global entrepreneurs.
European countries, especially in the West, have seen tight economic environments since the global economic crisis in 2008. This has hindered growth and expansion in the region. However, certain markets, such as Germany, Switzerland and the United Kingdom were able to stall massive declines, leading to important growth, albeit not at the levels record prior to the crisis.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataAccounting for almost 60% of the world population, the Asia-Pacific offers entrepreneurs a large target market and developments in the region have led to a rise in disposable income. At the turn of the century, Asian markets recorded a great influx of global brands and products from the west breaking through into the market. The initial euphoria over Asia Pacific has normalised since the economic crisis.
Another interesting prospect is emerging markets, which can offer significant opportunities for entrepreneurs. Regulatory issues, red tape, bribery and accessibility for resources have previously discouraged any ventures into these markets. Despite this, China and India have demonstrated significant entrepreneurial capability with large numbers from these countries starting business abroad in countries such as the US and the UK. In addition, following the Communist Party of China's Third Plenum, banking reforms are underway which could lead to even more investment possibilities.
Latin American emerging markets are also expected to drive growth. Countries such as Brazil, Argentina, Mexico and Chile have initiated reform process recently, and, as a consequence, have begun attracting high calibre entrepreneurs. One of the biggest reforms, as previously mentioned in relation to Chile, is the start-up visa, which Mexico and Brazil are also gradually introducing.
Since the economic slowdown in 2008, the US and Canada in particular have struggled due to credit being largely unavailable for launching new businesses. Significant immigration, taxation and regulatory reform have been adopted to overcome this issue. Similarly, Singapore and Hong Kong have also demonstrated the success of regulatory relaxation on businesses.
Secondary citizenship
Despite all of these government initiatives, an increasing number of mobile entrepreneurs prefer to request secondary citizenship rather than full relocation, as most prefer to stay in their country of birth. This is something that no region can quite overcome, as many prefer to keep home ties while benefitting from ease of travel between countries, a crucial aspect to business. Other factors which support dual citizenship may include education facilities for children, quality of life, solid infrastructure and healthcare facilities. As a result, wealth management firms have been compelled to specialise on immigration and wealth management services, a trend expected to continue in the near future.
According to sister company WealthInsight, one in every twenty HNWI entrepreneurs is mobile. The United States is the most popular destination, with 29.6% of entrepreneurs having business interests in the country. The UK follows in second place with 19.8%. Other countries do not even come close with none of them having a percentage in double digits. Canada, Hong Kong and Singapore are forecast to gain a greater share as their immigration and visa regulations begin to relax.
The US and the UK are the most popular destinations for mobile entrepreneurs, especially when expanding into each other's region, with 38.1% of American entrepreneurs preferring the UK and 28.3% of British entrepreneurs preferring the United States. However, they are not necessarily the best areas to expand into. Singapore and Hong Kong are rated higher, according to World Bank ratings, for ease of conducting business, with fewer procedures and time needed. Regulation reforms in many countries are set to lead to an influx of mobile entrepreneurs and the expansion of services to meet their incoming needs.
One problem with both the US and the UK is that their immigration and tax regulations are greatly outdated with reforms needed and imminent. The UK's entrepreneur visa, introduced in 2010, has failed to attract much new business. Current President of the United States, Barack Obama, has announced large scale reforms in January 2014. However, whether these new measures are too late remains to be seen.
A similar situation has arisen in the UAE and China. The ease of establishing business in these countries is low. The Chinese government has failed to protect firms from copyright issues and fair competition, leading to an exodus of business. For example, Google, as well as many consumer businesses, have discontinued their presence in China, preferring to relocate to location with more relaxed regulatory conditions such as Hong Kong. This has been a key issue creating unease among entrepreneurs from the US and Europe.
Trends in strategy
As a result, a key emerging trend is for mobile entrepreneurs to prefer markets with low barriers for business. Developing hubs of business provides advantages in communication, profitability and brand-building. While global hubs such as the US, Canada and the UK will always be popular, a lot of movement is region specific. For instance, entrepreneurs from the Asia Pacific will tend to prefer destinations such as Singapore or Hong Kong instead of expanding further afield. These two regions in particular are extremely popular due to the fewer regulatory sanctions in place. The legal structure in both of these countries is also very strong and plays an important role. So, while globally large markets will never fully lose favour, growth of business and entrepreneurs is more visible in countries such as Singapore and Hong Kong.
Moreover, one of the key goals for many companies and entrepreneurs is to create a global brand. The increase in availability of the internet has dramatically changed communication methods, and globalisation has standardised manufacturing processes, product quality and consumer preferences. This is particularly evident in developing markets where consumer awareness of global brands has increased. The subsequent rise in consumer spending power increased the want for branded products, leading to a gap in demand and availability, attracting global brands to these markets. To be able to compete with foreign entrepreneurs and emerge as a global brand, domestic entrepreneurs are required to expand into new markets to attract new business, while keeping their old customers happy. One of the big problems with this strategy is that it can only be applied by bigger businesses with larger bases of capital and smaller companies are severely affected by the increasing competition and are unable to compete.
On the other hand, expanding too quickly into new territory without the proper research can be fatal for a company. Two key signs businesses look out for are low-cost markets and the availability of talented workers. Comparatively low costs in countries like China, India and the Philippines encourage entrepreneurs to shift manufacturing and production arms to these locations. In addition, if the entrepreneur's home country has a lack of human resources, then new markets are ventured into. A large pool of talent is needed to run and manage a business, so unavailability of talented human resources is a major problem. Markets with a large skilled youth population, proactive education sector and active business environment are attractive to entrepreneurs.
There are many challenges when establishing business abroad. The development of an overseas plan is the first and one of the most crucial. Knowledge of the regulatory system of the new market is essential. Dealing with finance and accounting issues, payroll, employees and country-related factors all need to be considered, which can often lead to the hiring of professionals who make sure that entrepreneurs have all the information they need.
Once research has concluded, operations must be established. This is not an easy task, especially in certain countries hindered by corruption and overwhelming bureaucracy. Countries like the BRIC nations (Brazil, Russia, India and China) suffer from this in particular. Even after establishing a preliminary structure, many day-to-day processes such as reporting expenses, accounting services and ensuring compliance with local regulators are a huge usage of time and expense. This has led to a rise of specialist providers that deal with a large amount of the daily legwork.
Overall, mobile entrepreneurs are experiencing an exciting period of development. With the globalisation occurring more rapidly than ever, opportunities are appearing often. As more markets develop, competition develops and the bigger, established regions, such as the US or the UK, need to adapt and become even more accessible than they are. However, many pitfalls lie ahead if the proper precautionary steps are not properly taken. With regulatory demands to work with, as well as the difficulty to correctly gage new markets, businesses have a lot to consider before becoming global. The rewards, which can be plentiful, seem well worth the risk.
