Who is Your Company? Where to Locate to Compete in Emerging Markets?
Where should corporations from both developed and emerging markets consider locating in order to maintain their competitive advantage? In the past, New York, Paris, London, Tokyo and Hong Kong served as vital hubs of business contacts, skilled workers, easy transport, and connections with customers. However, the internet, cheaper air travel and knowledge-based production has changed the economic map. Most academic and management literature focuses on understanding the way that aerotropoli and the emergence of a creative class in large cities affects business performance in the US, EU and Japan. For companies looking to compete in emerging markets, the pundits have far less advice to give. This study attempts to provide that guidance – by using data to pin-point the next metropolitan hotbeds of trade, innovation and profit in emerging markets.
The new report points to the next generation of emerging metropolitan areas. The key findings are:
The top 10 metropolitan areas likely to help provide international companies with a sustainable competitive advantage consist of Dubai, Istanbul, Johannesburg, Santiago, Buenos Aires, Sao Paulo, St. Petersburg, Moscow, Shanghai, and Beijing.
Companies can work with government to improve the way their city helps them to compete successfully across borders by supporting infrastructure investment into, out of, and inside of airports.
Businesses can contribute to their own bottom-lines in emerging metropolitan areas by lobbying for business facilitation policies, encouraging governments to relax visa restrictions, and conducting R&D through local universities and research institutes.
Locating in cities connected to global trade routes can often provide more profitable access to developing markets than actually placing large corporate offices and factories in those countries.
Given these results, the author concludes that cities can help companies compete in emerging markets. However, companies locating in these emerging metropolitan areas need to work with national and local governments in order to encourage investment in infrastructure and changes in policies.