What makes an international business leader tick? What are the most attractive foreign markets for UK investors and what holds back or accelerates overseas investment?
These are all questions that an insightful new report from Kreston Global answers with the help of 600 business leaders from around the world.
As members of the Kreston network, and through our own international business gateway Kreston Duncan & Toplis, we’re pleased to share this report titled ‘Global vision and the ‘interpreneur’ mindset’: a report that explores the factors driving foreign investment.
In a survey of 600 business leaders, composed of C-suite executives, owners, chairs, partners, managing directors, and other senior figures across companies with a turnover of up to £500m, the report reveals key findings on what drives international investment - and what holds it back.
With 100 business leaders each from the United Kingdom, the United States, Brazil, China, Germany, and India, the takeaways may surprise you.
It (almost) goes without saying that the fundamental impetus spurring businesses to expand overseas is the opportunity to access larger, more diverse markets. In fact, almost half (45%) of entrepreneurs asked gave this as their primary driver.
But which localities are seen as the most inviting for investment?
It’s good news for UK business owners especially, as western Europe is apparently the most alluring market that overseas businesses would like to invest in, with 34% citing it as their prime target. The USA isn’t far behind, with 30% of international investors wanting to explore the vast isle of the star-spangled banner.
Interestingly, the exception to this seems to be China, whose business leaders professed to prefer more local investment in North Asia.
Of course, looking at this logically, proximity plays a pivotal part in businesses expanding beyond their own borders, as the majority seem to prefer offering their wares to neighbouring countries or on adjacent continents. This is typically due to established supply chains and a shared cultural understanding - the nuances of which can often be lost on radically foreign markets.
The report indeed confirmed this, explaining that among the most critical concerns for businesses considering taking the plunge into new markets is lacking understanding of local tax issues, which could prove problematic, and not knowing enough about the business culture or indeed the language - with 23% and 20% respectively of those surveyed flagging a lack of familiarity with target markets as barriers to growth.
The second most cited reason for expanding businesses overseas is also one of the largest problems: supply chains.
45% of would-be international business leaders say that gaining access to new supply chains, more manufacturing opportunities and other key resources is a driving force behind their foreign forays, but at the same time, international supply chain issues are the number one concern. They’re purported to weigh heavily on enterprises that have embedded suppliers and limited resilience - with almost one-third of respondents highlighting it as a potential pitfall.
Western business owners should look to the east for plenty of examples of thriving businesses that have expanded into overseas markets. Virtually 9 out of every 10 business leaders surveyed in China (89%) have grown their businesses into other territories - which is certainly a benchmark for business owners globally to aspire to.
India is also a flourishing investment hub, with 72% of their respondents having made the leap overseas too. The UK, Brazil, the USA, and Germany trail behind at 35%, 25%, and 23% (each) respectively.
What would it take to similarly incentivise UK business leaders to embrace a global outlook?
Perhaps unsurprisingly, those who choose to make the big decision to branch out their businesses into other countries are perceived as being more outgoing - which makes sense, given that they are literally going out into foreign markets.
Over two-thirds of those asked (67%) said a core characteristic of being an interpreneur is being extroverted and 62% think that the ‘typical’ international business leader is more focused on the ‘big picture' than being bogged down in details. They’re thought to be less practical than they are imaginative, with the drive to do more pushing them forward beyond borders.
It’s important to note that there is no all-encompassing archetype for international business leaders - by definition, they all face vastly different challenges in varying environments and shifting markets - but it is an interesting insight into the minds of those entrepreneurs who choose to go above and beyond their own borders to maximise their reach and profitability.
For lots more insight into the mindset of international entrepreneurs around the world, you can download the report here - and perhaps explore whether it would be an option for your business. If you are looking to explore global opportunities for growth or investment, contact Kreston Duncan & Toplis, our international business gateway.