globalEDGE Blog - By Tag: emerging-markets

Green finance is quickly gaining popularity in developing economies as more nations realize it can promote sustainability and economic prosperity. Financial operations and investments that explicitly assist climate-friendly and ecologically sustainable initiatives are called “green finance.”

As the National Basketball Assocation, or NBA, continues to mark the beginning of its 78th season, it is interesting to consider the places the league is headed in terms of international attention. This NBA season sees a historic high of 125 international players on opening-night rosters, hailing from 40 different countries and regions across six continents. This season, the league expects to reach over 200 different countries and present their games in more than 50 separate languages.

As the medical industry continues to advance each year, experts are seeing significant success in collaborations with Artificial Intelligence; the combination of these two markets is helping many patients get their diagnoses faster and efficiently.

Recent examinations have shown that AI has allowed radiologists to decrease 50% of their workloads. Also, instances of false positives given to patients have lessened. This new advanced system may eventually save millions of lives, specifically as experiments continue to measure how AI takes on cancer. 

As the rate that games are being developed at increases each day, the gaming industry shows no sign of slowing down any time soon. Although the pandemic prevented many gaming companies from developing new products, it helped the industry see a surge in many new gamers entering the market, leading up to present day.

Experts are seeing a rapid increase in the number of people playing games, with a staggering 3.38 billion people worldwide in 2023. As for the global market itself, experts predict $187.7 billion in revenue from the gaming industry this year, according to Newzoo. Large video game companies both abroad and in the United States, such as Activision Blizzard and Riot Games, are experiencing this growth first-hand. 

Almond, coconut, oat, soy, pea, and hemp milk… in an age particularly reliant on Starbucks morning coffee and cycling health trends, the alternative dairy industry is taking the world by storm. 

You have most likely watched a show or movie on Netflix at one point or another. Whether it was borrowing a friend’s account or purchasing the subscription for a month and then getting roped into another, streaming services have become ubiquitous. Netflix has released multiple hit shows and classics to date yet is now the worst-performing stock of 2022 in the S&P 500. It is down 62.5% year to date. What happened?

Electric vehicles have been around since the late 1800s, but they have only recently been discussed as the next big thing in the automotive industry. With increasing performance and technology improvements, government support, and lower production costs, electric vehicles are expected to have a huge impact on the industry in the coming decades.

With international turmoil in OPEC countries, scientists clamoring over ‘the sixth mass extinction’ due to climate change, and costs finally becoming competitive in comparison to fossil fuels, renewable energy is becoming an increasingly significant industry for the future of the world’s economies.

Recent currency declines against the U.S. Dollar highlight a dependence of emerging-market currencies on dollars. As the Federal Reserve continues to raise interest rates and subsequently boosts the power of the U.S. Dollar, some emerging markets have seen weakness in their own currencies. Two notable currencies displaying weakness are the Argentine peso and the Turkish lira.

Entrepreneurship is permeating business conversations as more people discover the lasting benefits that come with investing in start-ups. Entrepreneurs are responsible for driving the majority of social and economic innovation across the globe and continue to foster opportunities for growth in mature, emerging and frontier markets alike .

This blog analyzes A.T. Kearney’s Global Trends 2016-2021 report, which focuses on Political, Technological, and Demographic Revolutions. Today, I will specifically go into the 2nd trend in the report, which talks about Latin America’s position to be a major economic player in the future.

There is a bright spot in a region historically filled with political and economic trauma. Neoliberal political parties with pro-business strategy have been winning elections across the region, creating hope for a future filled with economic prosperity. The region has deepened its ties with the rest of the world and is in the midst of reshaping its future identity.

When it comes to market growth, countries around the world have different perspectives on what constitutes a strong performance of the economy. On Wednesday, October 11 the International Monetary Fund (IMF) announced its prediction that India’s growth rate will decrease to 6.7 percent for 2017, compared to a prediction earlier this year of 7.2 percent. This large drop is largely due to Prime Minister Narendra Modi’s implementation of the Goods and Service Tax (GST) and the demonetization of the Indian banknote. If India’s growth rate falls, it would be behind China’s predicted growth rate of 6.8 percent for 2017. Modi has faced backlash and criticism about the effects that these policies have had on India’s economy so far, which is an interesting contrast to the opinions of citizens in developed countries on the progress of their markets’ growth.  

Recent reports published by the World Trade Organization (WTO) have forecast a remarkable recovery in global merchandise trade for 2017. Last year, global merchandise trade failed to reach its projected growth of 1.7%, ending the year with a growth of 1.3%, marking 2016 with the slowest growth since the financial crisis. Among other indicators, WTO Director General Roberto Azevedo blamed the poor performance in 2016 on the slowdown in emerging markets, stating that imports hardly grew in volume terms. However, the six-year trend of disappointing growth may be coming to an end as the world economy gradually begins to regain momentum. In a report released on April 12th, the WTO predicts a 2.4% growth in global merchandise trade by the end of this year, stating that, for the first time in several years all regions of the world economy should experience a synchronized upturn in 2017. 

Part four of our transport manufacturing blog series examines the role emerging markets play in the industry.

Emerging markets are proving to be key areas for future growth in the transport manufacturing industry. The 2017 Emerging Markets Index from Agility and Transport Intelligence shows continued strength in logistics, infrastructure, and investment potential for large emerging markets, including the United Arab Emirates, Malaysia, and Saudi Arabia. According to the index, countries such as India and Kazakhstan significantly strengthened their business capacity over the past year, warranting further attention from international logistics executives. In addition, China, India, and Brazil have become a hotspot for automotive and aircraft sales. Despite frequently cited concerns in dealing with emerging markets—government corruption, tax laws, and customs—more corporations within the transport manufacturing industry are hoping to expand their business in these countries.

Growing up, many kids turned to ketchup to go with every meal, from hot dogs to mac and cheese to scrambled eggs. Now, the condiment of choice has turned into Sriracha. In the past 16 years, the hot sauce market, specifically Sriracha sauce, in America has increase by 165%, which makes the market one of the fastest growing industries in the United States.

Sriracha is now becoming a global phenomenon with over 200 tons produced a week worldwide. David Tran, the creator of the spicy condiment, never trademarked his creation which has created more success for his name sake. Many imitations are produced in countries such as France, China, and Australia, which are sold alongside the original sauce produced by Huy Fong Foods.

In an age where low and negative interest rates dominate the central banking scene for most of the developed world, one major nation has a target interest rate of 14.25%. The country in question has been all over the news in the past few years, from the World Cup and the Olympics, to the impeachment of a president and a deep recession. It is Brazil whose official interest rate stands at 14.25%, which is entirely counterintuitive given the information that Brazil is mired in a deep recession. Brazil has to maintain such a high official interest rate due to the fact that they are facing issues with inflation that have persisted for years. Since 2000, Brazil has only had three years where average inflation in the country ran below 5%, and in both 2015 and year to date 2016 Brazil has seen inflation run above 9%. The inflation issue has hampered Brazil’s ability to encourage growth through monetary policy and as such Brazil’s recession, which now spans over 2 years dating back to 2014, has persisted. In recent months, however, Brazil’s economy has hit several key targets and as such a rate cut is officially on the table.

With the economic struggles of many emerging markets, Indonesia has been one of the few bright spots. The economy is expected to meet expectations and grow 5% this year, the fourth highest rate among emerging markets. The fact that Indonesia has been able to keep its economy growing is impressive, especially with the many outside factors that have significantly impacted other emerging markets.

Economists warn of a sudden recession due to the uncertainty of Britain’s exit from the European Union and the lack of a strong plan for the future with minimal further disruption of the global markets. Over the past 2 weeks, the British pound has dropped to record 31 year lows against the American dollar, and the Bank of England recently stated that it would likely combat the financial turmoil through quantitative easing and rate cuts. Current economic predictions of households delaying consumption and corporations postponing investment would further lower the demand for labor and increase unemployment. However, despite the potential signs of further economic turmoil, there are silver linings that are becoming more apparent, such as emerging markets and the role of uncertainty.

In 2015, India took over the title of the fastest growing economy from China. This is partly due to China’s slowest growth year in a quarter of a century. Even with the fast rising economy, India is a still a nation filled with poverty. Tim Worstall from Forbes stated that “Poverty is, after all, simply a lack of both stuff to consume and the wherewithal to purchase such, and economic growth is defined as more stuff and the incomes to purchase such. Thus economic growth is, by definition, the solution to poverty.” This is great news for the politicians as well as the people, as it shows a solution to a problem that has long plagued the sub-continent. The rupee, India’s currency, has been on a down swing lately, as value has stayed relatively low given the economic gains. This, however, may also be beneficial as it makes exports cheaper for foreign consumers, which leads to a greater volume of exports and thus a boost in GDP. 

Last year, $735 billion flowed out of emerging markets, Compared to $111 billion in 2014, this situation has not occurred since the late 1980’s and could be bad news for emerging markets. With all of this capital flowing out of emerging markets, this means that the money is being used to buy assets elsewhere. Unfortunately, since emerging markets are still building up their roads, infrastructure, factories, and technology to improve their own economies, they are extremely reliant on investment from developed countries. With money being taken out of these countries to be invested elsewhere, emerging markets could face a tough year economically.

The United States Federal Reserve’s recent rate hike after a decade has prompted fears of financial turmoil in emerging markets. This rate hike is significant to global markets because the strengthening of the U.S. dollar could cause trouble in countries where firms have borrowed heavily with American currency, and the weaker domestic currencies could make it more difficult to pay back the dollar debt. In 2015, investors have withdrawn $500 billion from emerging markets, and this new development could prompt a larger outflow in the coming months from emerging markets.

There are many risks associated with frontier markets, but there may be even more reward for investors.  Compared to the popular emerging markets, frontier markets are even higher on the risk-reward scale. It is a smart move for investors now to make a move to invest some of what is already invested in emerging market into frontier markets, generating more diversification for their portfolio and to generate higher growth potential.

The once mighty emerging markets of Brazil, Russia, India, and China are currently experiencing the negative consequences that come with the title "Emerging Markets". Brazil and Russia are experiencing terrible recessions, China is attempting to control a stagnant market, and India is struggling with economic reforms. To give an indication of the severity of the situation, Goldman Sachs, whose former chief economist coined the title given to the BRIC countries, has recently pulled its BRIC fund after years of continued losses. 

China has a problem. In fact, China has multiple problems, but perhaps the most concerning issue is its greying populace. Throughout the world, advances in technology and knowledge in the general population of birth control, have left advanced countries facing demographic crises. China is no different, and while not considered an advanced country, it faces similar issues that are plaguing its population.

South Africa is one of the most prominent wine-producing countries in the Southern Hemisphere. With more than 300 years of winemaking history, it is now the ninth-largest producer of wine in the world, with some 250,000 acres under vine. The wine tasting trip to Stellenbosch provided the perfect introduction to the South African wine industry.

Manufacturing was the most prosperous sector in the early twentieth century in South Africa because of low input costs and developed infrastructure. However, the industry is now facing great challenges. During my trip to South Africa, I observed some weaknesses in the country’s manufacturing industry.

Ever since the 2008 financial crisis, emerging markets have received less investment from other countries. This is due to falling demand for the commodities that have traditionally powered these countries' exports. In addition to this, flows to emerging markets decreased even further in 2014 due to unease in the markets. Now it is looking even grimmer. By the end of 2015, capital inflows to emerging markets are projected to reach $548 billion, while emerging markets are only expected to have about $540 billion in outflows. These numbers are troubling, for if the gap between capital inflows and outflows continues to decrease, net capital flows to emerging markets may go negative for the first time in decades. 

Oudtshoorn, the capital of ostrich industry, has been enjoying prosperity from ostrich farming since the 1880s. These big-eyed birds provide jobs to the locals and attract tourists from all over the world. Before I went on this trip to South Africa, I never knew ostrich farming could be turned into a profitable business. During the visit, I observed several advantages and disadvantages of ostrich farming.

The Internet has become an indispensable element in peoples' lives in the 21st century. South Africa is no exception. The Internet user base in South Africa increased from 2.4 million in 2000 to 12.3 million in 2012. The increasing number of internet users presents great opportunities for online businesses.

Although it’s been a long time coming and an even longer time expected, the Fed decided not to raise rates at the most recent FOMC meeting. This news comes as a bit of a disappointment to investors and economists, especially after the past week of downturn in American stock markets. However, it is the emerging markets that have experienced notable distress. Although some of the issues many of these nations face are chronic or fundamental inadequacies, the currencies have taken the hardest hit.

Under the new economic classification section of globalEDGE, the emerging markets classification has an abundance of resources to offer to users. These resources range from internally generated indices to Bloomberg’s Emerging Markets News site.

South Korea is in uncharted waters. Amid recent economic turmoil in Asia, South Korea has become a safe haven for foreign assets. Some have speculated that emerging market investors have gotten smarter, and therefore can identify countries within the space that are better long term investments. Another school of thought, however, is that South Korea has transcended from an emerging market to a fully developed nation, and therefore presents more security in the face of economic trouble. 

There are several factors that differentiate an emerging market from a frontier market. These factors can vary from liquidity in the markets, to risk intensity, to return on investments in the future.

As of late, most news related to emerging markets has been overwhelmingly negative. China’s economic growth rate is dropping, and Brazil and Russia are mired in economic recession. To make matters worse, the 19 largest emerging economies have seen an outflow of more than $900 billion in investor capital over a thirteen-month period ending in July. Despite all of the negativity surrounding emerging markets, there are indicators that suggest emerging economies will be just fine.

Since the financial crisis, the economic situation in the European Union has been stagnant. Years of low growth and low inflation have left the Eurozone seeking answers. In January 2015, the ECB sought to find these answers through a massive bond purchase program similar to the quantitative easing program that the Federal Reserve carried out in the United States. The plan entailed the creation of €1 Trillion, or approximately €60 billion per month, by September 2016 to carry out the purchase of bonds in Europe. This plan was put in place to push down interest rates, therefore boosting inflation and creating a more attractive environment for credit creation. In turn, this would effectively result in a stimulation of growth throughout the European economy.

There are presently many different happenings all across the globe that are affecting emerging market (EM) currencies. A lessening demand for commodities, a devaluation of China's currency, stalled global trade, and an expectation that the Federal Reserve will increase interest rates are all bearing down on EM currencies. Some of the countries on the more drastic end of this are Russia, Colombia, and Brazil, whose currencies have fallen more than 30% over the past year, according to Bloomberg Business. Currently, emerging market currencies are in a "free fall" and according to Stephen Jen, a former International Monetary Fund economist, we should expect "a violent sell-off in some emerging market currencies in the second half of this year".

The globalEDGE team has added another new section to its recent developments. The Insights by Economic Classification section has now been published and can be accessed via the Global Insights menu! Currently the new section has two groups of countries defined: emerging markets and frontier markets. This new section highlights where the emerging and frontier markets stand in comparison to the least and most developed markets in the world. Furthermore, the statistics page of the new section provides information on a selection of indicators, which visually helps to compare group countries with one another. A risk comparator is also available, where two group countries’ economies and credit risk assessments can be compared. The new section also lists resources related to emerging and frontier markets. Make sure to check out our new section today!

In recent developments of the ongoing deterioration of relations between the United States and Venezuela, the U.S. government sanctioned multiple Venezuela government officials for alleged human rights violations, demanded the release of political prisoners, and warned against blaming American policies for the country's continued economic and political problems. While this exchange or harsh rhetoric and sanctions is nothing new for the U.S. and countries that differ greatly from its foreign policy goals, what makes this episode especially noteworthy is that it could entail significant consequences for American prospects for doing business within the Latin American region, and especially within Cuba.

With a lot of business areas in developed markets and industries becoming saturated, many companies are starting to look into newer product categories in emerging markets. A key driver in making this transition into emerging markets successful is implementing a diversified strategy. Companies need to be innovative in these new markets, as existing capabilities are not often in line with the wants and needs of the newer prospects.

January was the first time in 6 months that the MSCI Emerging Markets Index outpaced the S&P 500 as it gained 0.6%. Investors sent $18 billion into emerging market stocks and bonds, after an outflow of $11 billion in December. Analysts note that low commodity prices allow for quick growth in these emerging economies. As emerging markets go through reforms in order to stabilize their currencies or stimulate growth in their economies, investors see this as an opportunity to obtain higher returns.

Recent investments by U.S. companies into Indian-based startups are proof that there are innovative tech companies in places some companies may have never thought to look. Startups in emerging markets are increasingly catching the eyes of foreign investors. As of 2013, only 15% of India’s population had internet access. However, this is a number that has more than doubled since 2010. As India and other emerging economies become better connected from a digital perspective, more and more tech companies will emerge.

Since the Nordic economies are relatively small and open, exporting constitutes an important part of the economic activities in the Nordic region. Denmark, Norway, and Sweden have all had greater exports than imports every year since 1995. As the Nordic countries focus on exporting a few different products, each of them contributes to the growth of the regional Nordic economy and they together form a competitive market in the global economy.

As Brazil is busy finishing the last construction for the 2014 World Cup, Qatar, the host of the 2022 World Cup, has started its infrastructure improvement plan to welcome its guests from all over the world. This preparation has really brought Qatar into the eyes of investors with high expectations for economic gains. Qatar is not alone, as we see millions of “host money” from foreign investors has pushed the UAE’s stock market also to a new high. This blog will give you the overviews of Qatar’s and the UAE’s economy in the recent years and will explain the reason why Qatar and the UAE have experienced growth in foreign investment.

Nowadays, people have more opportunities to move to different parts of the world than ever before, thanks to globalization. Global trade, therefore, is changing with the increasing mobility. A new report says that, while the last era of globalization was driven largely by sourcing low-cost production, the next era will center on the rise of the global knowledge economy.

As the world's population continues to grow, more and more countries are beginning to realize the importance of improving infrastructure. The 2012-2013 Global Competitiveness Report repeatedly cites infrastructure as the single biggest hindrance to doing business in India, well ahead of corruption and bureaucracy. To address the needs of urbanization and global business, governments around the world are spending large amounts of money on infrastructure projects.

Recent tremors in emerging markets have investors worried about whether or not their money is in the right place. There is a riskier alternative for investors, that being investment in frontier markets. Frontier markets are markets that are neither developed nor emerging, and with this definition, frontier markets include twenty-three of the twenty-five fastest-growing economies over the last ten years. However, most of these countries do not have stock markets nor are they listed in the MSCI frontier market index, and this is due to the countries' stocks being unable to meet size qualifications and accessibility standards.

“Ten to 20 years from now, we may look back on the present as the dawn of the Smart Era: a time when rapid and continuous innovation changed almost everything about the way we live.”  This quote, spoken by Ernst & Young’s Global Technology Sector Leader Patrick Hyek, exhibits how quickly smart devices have inundated the business world.  The expansion of smart technology in the business world has created new opportunities for industries and companies around the globe that at one time had little interaction with technology.

In the midst of what appeared to be a comeback for the European automotive market, which includes western Russia in international marketing figures, the current political crisis in Ukraine has spurred on fears that Russia's days as a growing reliable source of car sales may be coming to a quick halt. Seeing as Russian forces in the Crimea region has resurrected Cold War tensions between Russian and Western supported factions, American and European investors in the Russian automotive market have reportedly lost confidence in Russia as a continued source of fuel for the sector's global recovery. These tensions come alongside economic turmoil that the international automotive industry has been handling in other emerging markets, which includes the currency market problems that are worsening prospects in the emerging-market countries of Turkey and South Africa.

Brazil’s economy posted surprisingly good numbers for the fourth quarter of 2013, renewing hope that the country’s economic fortunes can turnaround. Brazil had seen its GDP contract by .5% in the third quarter, leading some analysts to speculate that the country was headed for a recession. The new numbers for the fourth quarter show that the economy grew .7% from the previous quarter and 2.3% over the entire year, numbers that no one expected to see. This news brings some relief and encouragement to Brazilian officials, who currently have their hands full with issues surrounding the economy, protests, and major upcoming sporting events.

Many emerging markets have noted the rapid devaluation of their currencies taking place over the past year. In Colombia, the peso is now worth 2,017.01 per U.S. dollar, the weakest currency level since 2009. While other emerging markets such as South Africa and Turkey are fighting incessantly to combat currency declines by raising interest rates, Colombia is taking a different approach by fully embracing the decline of its currency.

Now that so many businesses are expanding into the BRIC countries, one major focus should be how are they going to secure the best and brightest to work for them.  The needs and wants from employers by professionals in countries such as Brazil, Russia, India, and China are unlike that of employees in developed countries. Companies need to learn how to tailor their workplace in these countries in order to identify, secure, and retain top talent.

Russia has spent more than $45 billion hosting the most expensive Winter Olympics in history with the hope of boosting its economy. People are beginning to doubt if this larger expenditure is really worth it. Although people have already seen the Russian ruble appreciate in value, they are still unsure if the Olympics will take Russia out of the time when the economic growth slowed down to only 1.3 percent last year. This article will analyze the economic data of several countries after hosting major international sporting events so you are able to predict how Russia’s economy will perform after the Winter Olympics.

In December of 2013 the Federal Reserve (FED) announced that it would begin to taper its bond-buying program by $10 million per month. As a result of quantitative easing (QE), the FED had been purchasing $85 million in assets in order to stimulate the economy. As the Federal Reserve continues to reduce its monthly purchases, there will be certain effects on globalization. Since tapering was announced, emerging market economies have been struggling. As the FED continues to taper, emerging markets could continue to see and outflow of funds and fluctuations in their currencies.

People’s attention shifted to the U.S. stock market again when stock prices dropped by 10 percent and hit a record low since October 2011. Although the recent ease-money government policies played a role in the price drop, the main reason for the decline was the global growth slowdown.

In 2001, economist Jim O’Neill identified the world’s strongest emerging economies as the BRIC countries, which is an acronym that stands for Brazil, Russia, India, and China.  Thirteen years later, O’Neill has offered another acronym defining today’s emerging economic powerhouses – the MINT countries.  Mexico, Indonesia, Nigeria, and Turkey all show signs of strong future GDP growth and the potential to become major players in the global economy.

In the five years that the globalEDGE blog has been operating, much has changed in the area of global trade and investment. It all began when the global financial crisis came about in 2008 and this led to major changes in the global trade markets. Global trade relative to GDP plummeted around thirty percent during the financial crisis, and the crisis seemed to have come from problems such as poor trade regulation, bad credit, and poor bank strategies. There are many changes that have been made to the global economy and many challenges that have been faced in the area of global trade since 2008. Here’s a look at what has happened.

During the globalEDGE Blog’s first five years, it has served the international business community not only as a resource for global business news analyses, but also as a time capsule for events that significantly influenced international markets. Born in September 2008, the resounding news of the blog’s launching was understandingly dwarfed by other major events of the time, such as the rapid spread of cell phone use and business in Sub-Saharan Africa and, of course, the global financial crisis that’s effect on the global economy was comparable only to the Great Depression. In this blog, we will not only go back and revisit the news that captivated the world’s attention in the first months of the blog, but will also discuss the lasting effects of those events and how they continue to impact the world in 2013.

This week we are celebrating the birthday of the globalEDGE blog! With its inception on September 12, 2008, the blog is now turning five years old and we are starting our celebration with a blog post about what has transpired in emerging markets over the past five years.

Emerging markets has become a phrase that incites a lot of excitement. With high growth rates and the possibility of huge returns, investors have flocked to put money in the best performing emerging markets. One of the darling emerging markets over the past decade has been India. The combination of a large landmass, rich with resources, and the world’s second largest population has been the framework that allowed India’s GDP to grow at an average rate of 7.65% a year over the past decade. This well outpaces the United States as well as almost every western economy and has caused investors to salivate at the potential they see in India. Regardless of these extraordinary statistics, recent stumbles in India’s economy has reminded everyone just how risky emerging markets can be.

Foreign direct investment has a large effect on the economy of countries. It can increase production, employment, exports, imports, and economic growth. Over the past five years, emerging markets have seen an increase in foreign capital from investors in search of higher yields. Three popular emerging market countries among foreign investors that have experienced political instabilities in the past month are Brazil, Turkey, and Egypt. The political instability could prove to be detrimental to emerging market financial growth in the short run, but investors should be more worried about the slowing economies of these countries.

According to a report by the World Bank, Sub-Saharan Africa is on pace to achieve larger economic growth than the global average over the next three years. The report stated that higher commodities, increased investment opportunities, and a steady recovery in the global economy should sustain the region’s GDP growth above 5%, while the global average remains merely 2.4% as of this year. Excluding South Africa, the region’s strongest economy, African economies are currently growing at 5.8 percent, higher than the developing country average of 4.9 percent.Coupled with an anticipated increase in global foreign direct investment, which is expected to reach $54 billion USD by 2015, the economic growth in Sub-Saharan Africa provides an immense opportunity not only to elevate the standing of African nations in the global economy, but also the chance to fight back against the region’s staggering poverty levels.

From the hustling cities of Asia to the scorching desert cities of the Middle East, business travel is booming in emerging countries. Last year business traffic in the emerging markets of Asia, Latin America, and the Middle East grew substantially and major infrastructure projects are underway to accommodate the rapid growth in these markets. Most emerging cities are experiencing an expansion of airports, hotels, and highway. This trend is further testament to the dynamism and growth prospects of emerging markets.

Every year globalEDGE publishes its Market Potential Index (MPI) in order to assess a market’s attractiveness for international business. The Market Potential Index provides a detailed ranking of 26 emerging countries. With the MPI, determining which international market to enter is no longer an overwhelming task. Emerging markets are ranked based on several dimensions, allowing appropriate marketing strategies to be developed for each particular country. This year the MPI highlights several significant trends among emerging markets. We will now take a closer look at some of these trends in order to obtain a better idea of the importance of emerging markets in international business.

On April 4th, the Bank of Japan shocked the world by unveiling a stimulus package that plans to inject $1.4 trillion into the Japan economy over the next two years. This large stimulus package is designed to help Japan out of a deflationary cycle and end two years of stagnation.

With some of the largest economies in the world struggling to grow, companies are looking to emerging markets to boost sales. Global corporations are testing their limits as they reach into new untouched markets. While there are many challenges that come with selling in a new market, there is also great potential. Many global companies are discovering this fact as they see emerging markets growing their sales.

As technology and communication capabilities increase, it may be safe to assume that the world is becoming more connected with many countries becoming integrated to the world economy. This basic idea is called globalization and with globalization comes many benefits such as new opportunities in emerging markets and increased access to international trade. To many people, globalization is making the world flat meaning businesses can collaborate and operate across borders without regard to geography or distance in today’s modern technological and political landscape. Many businesses are beginning to realize the opportunities abroad made possible by an increasingly connected world. However, is there a way to measure how connected the world really is?

In today’s technology driven society, web browsers are very important as people spend many hours using the internet for business needs or gathering information from sources around the world. A few weeks ago, Google Chrome became the most popular web browser worldwide for a single day, edging out the long-standing dominance of Internet Explorer. Claiming the top spot for only one day may not seem like a noteworthy event, but how Google Chrome was able to take the lead is very important in terms of international business.

Globalization and the growth in emerging markets have driven significant changes in nearly every industry around the globe. This no different in philanthropy where the “old” standard of donations being led by wealthy Westerners is being turned upside down. Explosive growth has led to tremendous wealth creation in many developing countries and veteran donors are urging the new rich to donate to important causes. Philanthropy has also been repackaged into a businesses where consumers help donate products to needy causes.

Entrepreneurship is the key, long-term growth driver of any country's economy. Not only do small businesses, in aggregate, add more jobs than large corporations, they are usually the companies leading technological breakthroughs. These small businesses are clearly very important to every country, but they face different challenges and rewards when operating in developed and emerging markets.

The widely accepted “BRIC” designation for the world’s largest emerging economies may soon be in need of a revision.  In fact, some international business scholars have felt for many years that Jim O’Neill’s term for the developing nations of Brazil, Russia, India, and China should be updated to include at least one additional country.  Morgan Stanley publicly stated as early as two years ago that the commonly referenced acronym should be revised to “BRIIC” in order to include the rapidly growing economy of Indonesia. 

With the projection of a $150.1 billion cloud computing world market by 2013, what are emerging markets doing to get a piece of this pie? Cloud computing is finally growing in developed nations. Many companies are gradually moving more applications to cloud data centers where they can take advantage of pooling of computing resources, more efficient use of data processing power and increased flexibility. Cloud computing could have a huge impact on societies and economies in developing countries as well.

A quick look around the globe can show you that the continued growth in emerging markets have led to rapid changes in many industries. One of the industries that many people seem to overlook is the entertainment industry. Global entertainment is actually in the crosswinds of many trends that have changed (and will continue to change) the face of entertainment.

Global water usage has exploded in recent years. This has been led by emerging markets demanding increasing amounts of clean water for consumption, and the agriculture industry needing more water to produce the food required to meet their new demand. These two increases in demand combined with the shrinking supply of clean water have led many to predict a water shortage sometime in the future. To fight this problem there are two options: decrease demand or increase supply. The globalEDGE October Newsletter addresses the option of increasing supply while this post will discuss efforts to decrease demand.

So how exactly to you advance from a frontier market to an emerging market? Some people classify frontier markets as a subset of emerging markets, but there is a clear distinction. We’ve talked in previous posts about systematic risk and political instability as huge factors to impeding growth. Once a country can overcome many of these risks, and grow a more stable infrastructure, it is well on its way to becoming a developed economy.

While more developed countries have been faced with huge financial problems and equities have advanced just under 50% this year, markets in developing countries such as China and India are trading at 52-week highs. Furthermore, emerging markets account for about 50% of world GDP. It seems likely that they will be the source of global growth over the next few years, seeing that developed countries are spending resources in reducing debt and rebuilding banking systems.