The Global economic scene as we used to know many decades ago is not quite the same anymore. Many economies have evolved; some have performed steadily while many others have declined. Judging and analysing the scenario on the micro level, it has been observed that the cycles of economic depression and economic instability have led to the downfall of businesses; but there have been a few instances where these outwardly negative conditions have been utilised to advantage by some business owners. On a broader scale, markets keep emerging and their emergence brings along with them challenges as well as opportunities.
It has been observed, noteworthy emerging markets such as China, India, Brazil, Indonesia, South Korea, Argentina, Mexico, Poland and Turkey as well as Egypt, Iran, Nigeria and Taiwan have created millions of opportunities for entrepreneurs and business owners. By definition, an emerging Market is a country which bears some characteristics of a developed market but does not fully meet the standards required for it to be called one.
It is evident that the political scenario of a country is a major influence on its economy. Lan Bremmer, a premier political Scientist, describes an emerging market as “a country where politics matters as much as economics to the markets”. Recently Industrialised countries with economies that have not reached a status to be tagged as “the first world” in a macroeconomic sense; can also be seen as emerging markets.
A Developed market, on the other hand, is the one which is most developed economically as well as has stable capital market shares. These are countries with high-income, efficient market institutions and openness to foreign ownership. Countries like Singapore, United States, Australia, Germany and France are all considered as developed markets.
In spite of the varied classifications, every market is composed of entrepreneurs and business owners who make colossal decisions. Globally speaking, the business world is now a small “village” and cross-border transactions can be made in a matter of seconds. However, various challenges are sprouting up. The challenges faced by each of the Emerging markets differ from the other and are sometimes unique to a particular region. As Ian Bremmer states; politics as well as economics matter in an emerging economy. An emerging market afflicted by political instability is usually hostile to Investors and Entrepreneurs. In the long run, many entrepreneurs avoid these hot spots in spite of them offering high potentials and potentially high returns on Investment. Extreme terrorism and fanaticism, weak laws, lack of solid structure, complicated logistics are all limiting factors in the smooth running of businesses. According to Australian Bureau of Statistics, Developed markets too fare no better in terms of challenges. 60 percent of small businesses are said to cease within the first three years of their commencement. Daily Telegraph reports that half of the businesses in the UK fail within five years. To sum up, most of the challenges stem from inadequate capital, Tax systems, high energy costs, burden of regulations, and too much competition amongst others.
No doubt, in spite of the challenges, there are definitely some bright spots. Just as a few entrepreneurs progressed in their ventures and were able to turn to their advantage, the ‘great economic depression ‘and the various lows in the economic cycle, similarly it is possible to put to advantage, the dynamics of the present day modern economic market. Some of the high and unappeasable demands of the emerging markets are still unexplored and have yet to be met. Global entrepreneurs and business Owners need to closely monitor and recognise the plentiful opportunities lying in these markets. Sub-Saharan Africa is yet to overcome its Energy challenges. Food provisioning and processing is still a huge challenge in many parts of the world. Large corporations regularly seek new, innovative ways to improve themselves and employ smarter strategies.
Definitely, there is scope for better strategic management, better resource management and service delivery. Entrepreneurs and Investors working in emerging markets need to be well-informed and knowledgeable about the political atmosphere of a potential investment destination. This knowledge should be channelised into building stronger entrepreneurial muscles to face the challenges realistically. Entrepreneurs also need to diversify in other fields and look for varied options to reduce potential risks and shocks from time to time. No amount of money is too small to carry out pilot surveys, to ensure the sustainability and viability of business ideas. Intuition and common sense and not emotions should be the major drivers of decision making. Painstaking research on customer behaviour, supply-demand dynamics and insights into future projections help in identifying opportunities lurking from behind the maze of visible challenges as these have led to the collapse of many promising ventures.
To conclude, the one common trait in all successful entrepreneurs is - the ability to chart a new course for them self and to rise above competitiveness of the commonplace. This trait is explained in vivid and practical terms by W. Chan Kim and Renee Mauborgne in their widely read book “Blue Ocean Strategy”. They have stressed on the importance of proper business analysis, value innovation, creating new and uncontested market space for new demand and high profitability, maximising opportunities while minimising risks, and creating win-win situations as much as possible for all parties.