A Revival in Global Economic Activity

Exports during the month hit their highest level since August 2008, the month before the financial crisis.

"More and more of our exports have started going to the faster-growing regions in Asia, Latin America and Canada," said Morgan Stanley economist Ted Wieseman. "It highlights that the emerging markets never really had much of a slowdown at all. They've continued to outperform throughout the crisis."

Exports of industrial supplies were particularly strong, rising 8%, driven by chemicals and plastics. Food exports also surged. Among the big gains: Soybean exports jumped to almost $2.4 billion, an all-time high, from $1.8 billion in September.

Read the entire article here.

If You Were to Bet on Growth, Where Will It Come From?

According to Abbott Laboratories Chief Executive Miles D. White:

... he has assembled a business in fast-growing countries that the company will count on for a big part of its growth.

"Where do you think the growth in the world is going to come from?" Mr. White asked during an interview at his suburban Chicago office, a few miles from Lake Michigan. "Would you bet on the U.S.? Would you bet on Western Europe? It's going to come from emerging markets."

The article goes on further to say:

Now, the fast-growing emerging-market economies are much more attractive. Expanding middle classes in such countries as Brazil, South Korea and Turkey are not only spending more on health care, but their rising affluence has contributed to increasing rates of diabetes, heart disease and other conditions that once had been limited to developed markets. Some governments, notably China's, are beginning to provide insurance to pay for health care.

Read the entire article here.

Graphic illustration source here.

Global Strategy: For the Time Being Avoid the U.S.A.

China's biggest search engine company, Baidu Inc., is more dominant than ever now due to Google's pullback (moved its search to Hong Kong due to censorship demands that were placed on Google by China government).

Baidu's 41-year-old founder and CEO Robin Li has to figure out how to grow the business amid investor concerns on just where the growth will come from since there will be an intentional avoidance of the U.S.A. market for now.

More than two-thirds of China's population is still not on the Internet so there is room for Baidu to squeeze out additional local growth over the next 5-10 years.

But other revenue streams will be critical for Baidu to maintain and sustain its position in the local and global marketplace.

Read the interesting Bosstalk interview conducted by Owen Fletcher (WSJ) with Robin Li (at Baidu's Beijing headquarter office) -- here.

Illustration credit (very striking -- scary -- how much it looks like Google): Baidu search engine service, China

Posted by: Laurel Delaney, The Global Small Business Blog

Do Not Fear the Globalization of Higher Education

The new global brain race is intensely competitive.

Read all about it here.

Posted by: The Global Small Business Blog

P&G Extends Reach to Some of the Most Populous Countries in the World

The U.S. and Europe are in a slump so Procter and Gamble plans to target India -- where consumers remain a tough sell -- for its international expansion push.

Read more here.

P&G India here. P&G India: brands.

Photo credit: P&G Ariel, India

Exports Strengthen Global Trade

According to the Commerce Department, the U.S. trade deficit expanded 2.5% to $40.4 billion in March, compared with the prior month.

The March rise in exports and imports was a positive indicator for U.S. demand, as well as for international trade, signaling that more economies around the world are recovering from the downturn.

U.S. exports rose 3.2% to a seasonally adjusted $147.9 billion, while imports increased 3.1% to $188.3 billion.

Read more here.

Posted by: The Global Small Business Blog

Export Transportation Bottlenecks

The United States is experiencing its own export renaissance due to a generally weak dollar and a push by the Obama administration to double exports in five years.

But the one thing nobody is talking about? Shipping bottlenecks.

It's the opposite of what one might expect. Carriers have a surplus of ships. And since the U.S. still imports more than it exports, freighters arrive in America looking for export cargo to take back, so they don't have to go home empty. Yet American producers of everything from hazelnuts to cardboard are complaining they can't get their goods shipped in timely fashion. Eighty rail cars filled with dried peas sat for weeks on train tracks outside Seattle, waiting for a ship to India. Wheat for Asia is stuck in a warehouse in North Dakota.

It's a challenge.

Read more here.

Learn Global Business Etiquette

If you are in the process of expanding abroad, avoid cultural gaffes by learning local business etiquette in the country you are about to do business.

This article offers some good tips by business owners and experts in the trenches on how to immerse yourself in a country's culture to better understand the people, respect their ways and be sensitive about never offending.

Expanding Abroad? Avoid Cultural Gaffes

You might also check out our 8 Global Marketing Gaffes.

Guess Who's Leading the World Out of a Downturn?

If you immediately thought Asia is leading us out of the downturn, you're right. Specifically, Hong Kong shows a burst of activity in consumer consumption.

An excerpt from the WSJ article, "Consumers Spend Asia Out of a Downturn."

"Chinese consumers are buying," says Dong Tao, regional Asia economist for Credit Suisse in Hong Kong. "Job prospects are good." Add what he calls "the spice of asset appreciation" in property and stocks, and folks feel richer.

All of that is good news for the world economy, which has relied on Asia to pull the world out of recession. The International Monetary Fund forecasts inflation adjusted growth in developing Asia will be 7.3% in 2010, compared to 3.1% globally. China has accounted for more than half of the world's economic growth the past three years, according to the IMF.

Still, Asia must rely on its exports to not just survive but to really thrive. More here.

Graphic sources: J.D. Power Assicates, Asia (car sales), Asian Development Bank (consumption)

Note: In observance of Christmas tomorrow, be sure to watch for our special holiday post.

The Incredible Shrinking Trade Gap

The shrinking trade gap is lifting our spirits and growth prospects.

"U.S. exports appear to be improving much faster than the domestic economy, suggesting that much of the improvement seen in the manufacturing sector reflects strengthening economic conditions abroad and the impact of the weaker dollar," said Nomura Securities economist David Resler.

Stronger-than-expected net exports lifted growth prospects for the current quarter. The forecasting firm Macroeconomic Advisers raised its estimate for fourth-quarter growth to 3.8% from 3.4%.

Read all about it here.

Business Attire For Globetrotters; How to Fit In, Be Comfortable and Not Offend

Have you ever been overseas attending a business meeting and at the close of the gathering, someone suggested you meet afterward at a famous sauna to relax and further discuss business -- in the nude? I have -- at least up to the nude part (swimsuits do come handy while traveling overseas!).

Here's a great little article that covers this and many other awkward moments when traveling to foreign countries and how to deal with it in the most sensitive manner possible without offending anyone, losing yourself or the deal you're working on.

Where Yellow's a Faux Pas And White Is Death

Art: Mark Rothko

Outsourcing New Ideas

As funds dry up the world over, businesses are doing everything they can to continue down the path of generating new ideas (innovation). Have you considered outsourcing that aspect of your business to reduce costs, speed development time and tap into a pool of talent worldwide?

According to a recent article in the WSJ (special Business Insight Report), four situations call for outsourcing:

1. When companies would need to add lots of new knowledge to innovate, such as figuring out how to work with an unfamiliar chemical compound to make a different line of pharmaceuticals.

2. In the early stages of a project, when there are lots of technical hurdles to be overcome and the outcome is far from certain.

3. When intellectual property isn't well protected in the industry. In these cases, since new ideas spread quickly from company to company, it may not be possible to differentiate products with innovations. So, businesses turn to outsourcing to limit spending.

4. When companies have had lots of experience with outsourcing. Let's say all the factors above are equal—it's basically a toss-up between working on a project in-house and outsourcing it. In these cases, companies with a long track record of contracting tend to hand off the job to outsiders—three times as often, in fact, as businesses with average levels of experience in the practice. The costs and benefits of outsourcing are more certain for experienced firms, and they can better manage the situation to produce effective results.

Take a further look here to find out how outsourcing innovation works and affects performance.

Global Trade Gap Grows

Even with a sinking dollar that aids exports, the trade gap still grows.

Important excerpt here:

Long term, however, economists say the U.S. needs to address its trade deficit by spurring exports to help offset imports of other nations' goods and services. One way to do that is by lowering the value of the dollar relative to other currencies, making U.S. goods and services cheaper abroad and more attractive to buyers.

That is already beginning to take place, as a recovery of the global economy has reversed investors' "flight to safety" that spurred demand for dollars during the past year. The U.S. dollar has been trading near a 15-month low this week against a basket of other currencies.

Even so, "the dollar may need to decline further," said Mr. Pandl, to spur exports enough to help narrow the trade gap and boost U.S. economic growth.

Read more here.

What's Your Push Into China?

If you run a global small business, and I am assuming many of you do, what should you be doing to swing open that door to China? The first step is to track what others are doing and determine success rates.

For example, innovative healthcare product company Novartis announced on Tuesday that it will spend U.S. $1 billion spread over five years to make China (starting in Shanghai -- pictured) a third global pillar for its research and development. Why? Couple of good reasons:

1. Rapid growth is one key reason for the expansion.
2. Projected to become one of Novartis's three biggest markets by 2014.
3. Revenue in China has been growing at annual rate of 30% in the last few years.
4. Health-care reform alone will fuel growth.

The question Novartis asks is: "Where do you need to be down the road, and clearly it is here." It's a question many of us should be asking and facing but what small business can afford to make the kind of investment required to do business in China?

Do you think at the very least it might be prudent to give Novartis a call or send an email to an appropriate person to see how you might partner with them on some of their initiatives? It's a great way to attempt to crack open the market -- together.

Read more here.

How To Chart an Export Course Right Out of the Recession

Here's the task at hand for 46-year-old chief executive N. Chandrasekaran (better known as "Chandra" -- pictured) at Tata Consultancy Services Ltd.: To chart a course for India's largest software exporter out of a recession that deflated global technology spending and exposed the reliance of Indian outsourcing firms on the U.S. and U.K. markets.

In an interview conducted by WSJ reporters Amol Sharma and Paul Beckett, Chandra shares his mind about how he plans to navigate Tata out of the downturn.

Let's focus primarily on the 21 takeaways that I picked up on that might enable you to get a better hold on global strategy for your business:

1. Expand your company's footprint (think about emerging markets).
2. Tackle new areas (such as cloud computing).
3. Make sure you are very close with all your customers.
4. Manage your costs better.
5. It's not about taking costs out; it's about bringing more efficiency.
6. Become closer to your customers.
7. Stay with your customers during the downturn (don't abandon them).
8. Coach your team to have them understand your customer's "pain points."
9. Ask your customers: "What can we do to help?"
10. Don't continue to pursue BIG deals in the pipeline that may never come to fruition.
11. Focus on deals (develop an entirely new strategy) that will come to fruition.
12. Expand your presence in other parts of the world (consider emerging markets).
13. Develop a full suite of services that you can sell end-to-end offerings to customers.
14. Go after "nonlinear" growth. In other words, find ways to generate more revenues with less headcount additions.
15. Create something once, then re-use it to serve multiple customers!
16. As your customers go global, be there before they arrive to service their needs.
17. Send people on-site to make it work -- especially if language is a problem.
18. Select strategic locations to conduct business in.
19. Pick the right strategic location and then scale it (e.g, Mexico).
20. Train people to develop your firm's methodology across all continents.
21. Look at cloud computing as a business model, not a technology.

Tata Consultancy to Expand Footprint in Emerging Markets

Bring America to the World

This is a fascinating commentary not just about the wildly popular "Mad Men" series but more about Conrad Hilton (pictured), founder of the Hilton Worldwide hotel chain. There's so much I didn't know about him.

In the series, Hilton, portrayed by Chelcie Ross, says, "It's my purpose in the life to bring America to the world." In real life he called it, "planting a little bit of America around the world."

I'll let you read the piece for yourself, "Hollywood Discovers a Real Businessman."

The only reason why I am blogging about it is because I feel a little of The Global Small Business Blog brings America to the world too. Don't you?

Tentative Global Trade Turnaround?

World trade is beginning to pick up. But the turnaround seems to be tentative unless we make a concerted effort to export or import more.

In the U.S., the Commerce Department said Friday that the dollar value of exports, which surged in July, rose another 0.2% in August. That put exports at their highest level since December, but still 21% below year-ago levels. Lower oil imports reduced imports by 0.6%, narrowing the trade deficit to $30.7 billion after four months of widening.

Read more at "Trade Upturn Hints at a Recovery."

And check out the World Economic Outlook (October 2009) or IMF Data Mapper here.

Illustration: IMF World Economic Outlook (WSJ)

China Goes Local

China's aggressive and seasoned exporters are setting their sights on a whole new market: The Chinese.

Find out why here.

Another interesting related tidbit here.

Self-Regenerative Power of Markets Lift Us Off the Rocks

A great piece by James Grant who argues that the latest gloomy forecasts ignore an important lesson of history: The deeper the slump, the zippier the recovery.

One may observe that Ronald Reagan stood for enterprise, free trade and low taxes, whereas Barack Obama stands for other things.

Read more here.

The Driver Of Our Global Growth Is Not To Make Money

Don't you find this hard to believe?

"The driver of our growth is not to make money, but to continue investing in this market." ~ Harish Manwani, president of Unilever's Asia, Africa, Central and Eastern Europe division.

It may be a planned global strategy but is it sustainable over the long haul?

Read more about Unilever's growth strategy here.

Unilever in China

Innovation | Unilever Global

Research and Development Centers

Photo and chart credit: Unilever