Doing Business in the Industrialized Countries
Importance of doing business in industrialized countries
Access to large and affluent markets (e.g., the United States, Japan, Germany, the United Kingdom, France, Italy, Canada, Australia, Switzerland, Sweden)
Skilled workforce
High levels of education
Training
Advanced infrastructure
transportation
energy
telecommunications
Technological innovation
leading research
development centers
Economic stability
low unemployment
low inflation
Challenges and opportunities of operating in industrialized markets
Competition
from large, well-established companies
Regulation
complex and often-changing regulations
Globalization
increasing competition from foreign companies
Importance of understanding the unique business and cultural environment of each industrialized country
Cultural differences can impact all aspects of business, from communication and negotiation to decision-making and relationship-building
Overview of Doing Business in Industrialized Countries
Economic characteristics of industrialized countries
High levels of GDP per capita (e.g., all of the G7 countries have GDP per capita of over $30,000)
Diversified economies (e.g., industrialized countries typically have a mix of service, manufacturing, and agricultural sectors)
Strong service sectors (e.g., services such as finance, healthcare, and education account for a large share of GDP in industrialized countries)
Advanced manufacturing sectors (e.g., industrialized countries are leaders in the production of high-tech goods)
Drivers of economic growth in industrialized countries
Technological innovation (e.g., industrialized countries invest heavily in research and development)
Education and skills development (e.g., industrialized countries have highly educated and skilled workforces)
Investment in infrastructure (e.g., industrialized countries have well-developed transportation, energy, and telecommunications networks)
Free trade and globalization (e.g., industrialized countries are generally open to trade and investment from other countries)
Business challenges in industrialized countries
Intense competition (e.g., industrialized countries are home to many of the world's largest and most successful companies)
Complex regulatory environment (e.g., industrialized countries have complex regulations governing everything from business formation to environmental protection)
High costs of doing business (e.g., costs such as labor, real estate, and energy are typically higher in industrialized countries)
Business opportunities in industrialized countries
Access to large and affluent markets (e.g., industrialized countries have high levels of disposable income and consumers are willing to spend money on high-quality goods and services)
Skilled workforce (e.g., industrialized countries have highly educated and skilled workforces that can be leveraged to develop and produce innovative products and services)
Advanced infrastructure (e.g., industrialized countries have well-developed transportation, energy, and telecommunications networks that can support businesses of all sizes)
Access to cutting-edge technologies (e.g., industrialized countries are leaders in the development of new technologies that can be used to improve business efficiency and productivity)
Cultural Considerations for Doing Business in Individualized Countries
Importance of understanding cultural norms and values
Culture can impact all aspects of business, from communication and negotiation to decision-making and relationship-building
For example, in some cultures, it is important to build personal relationships before doing business, while in other cultures, business is conducted more transactionally
Key cultural differences between industrialized countries and other parts of the world
Individualism vs. collectivism (e.g., industrialized countries tend to be more individualistic, while other parts of the world tend to be more collectivistic)
High vs. low context cultures (e.g., industrialized countries tend to be high context cultures, where communication is implicit and nonverbal cues are important, while other parts of the world tend to be low context cultures, where communication is more explicit and direct)
Direct vs. indirect communication styles (e.g., industrialized countries tend to have more direct communication styles, while other parts of the world tend to have more indirect communication styles)
Power distance (e.g., industrialized countries tend to have lower power distance, where there is less of a hierarchy between people, while other parts of the world tend to have higher power distance, where there is a more rigid hierarchy between people)
Uncertainty avoidance (e.g., industrialized countries tend to have lower uncertainty