Senior Executives See Growth Opportunities in Emerging Markets
Emerging markets may been pummeled in the financial world this year, but a survey of 500 CEOs and senior executives by management consulting firm A.T. Kearney shows they believe that emerging markets will be making a comeback.
East Asia and Latin America were the regions they had most faith in, as well as India which is luring more manufacturing with its seven percent economic growth rate.
Mixed with that optimism is a view of the 2016 business landscape of increasing operational difficulties and continued economic and geopolitical volatility, according to the report, entitled “Views from the C-Suite.”
“This year’s results confirm a world of unprecedented opportunity, on the one hand, and compounding risks, on the other,” said Erik Peterson, managing director of A.T. Kearney’s Global Business Policy Council, which conducted the study. “In assessing risk, we found it striking that 82 percent of global business executives in this year’s study believe that both economic volatility and terrorism will intensify throughout 2015 and into early 2016. More broadly, 43 percent of senior business leaders we surveyed this year identified geopolitics as an important business challenge compared to only 29 percent who felt that way in 2014.”
Some 76 percent of executives foresee a more difficult overall global business operating environment in the coming year. Their biggest concern is worsening policy and regulatory environments, cited by 46 percent of respondents as one of their two foremost operational challenges. Executives rank the sub-issue of trade regulations as the highest policy concern.
The outlook for the global economy varies regionally. Executives in Asia Pacific, at 46 percent, and the Americas, 44 percent, generally believe that this year the global economy will not accelerate beyond the 2014 growth rate of 3.3 percent, while those in Europe are more bullish on global economic growth.
Regarding China, executives continue to be less optimistic: 77 percent foresee China’s economic growth rate slowing to less than 6 percent in the next 12 months.
The potential bright spots identified by the executives on the global operating horizon: the possibilities that emerging markets could stage a comeback (77 percent), that energy and commodity prices will remain low (76 percent), and that economic growth in the U.S. will exceed three percent (73 percent).
Executives point to investment opportunities in emerging markets as the primary external business opportunity in the next 12 months, highlighting East Asia and Latin America as regions with the most opportunities.
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