It's no secret certain markets hold special promise for U.S. small businesses. Although in the past Europe and Japan topped the list of traditional trading partners, experts now expect these areas to experience little growth in the near future. Instead, the key players for the next several years include Argentina, Brazil, China, India, Indonesia, Mexico, Poland, South Africa, South Korea and Turkey. Dubbed Big Emerging Markets (BEMs) by the U.S. Department of Commerce, these nations comprise nearly half the world's population and are expected to double their share of world imports by 2010.
Not surprisingly, Asia's recent financial crisis might affect such predictions, especially since the market accounts for more than one-third of all U.S. exports.
But no one knows what the long-term ramifications will be, and as everyone waits for renewed growth in this area, an optimistic economic world hopes for the best. Based on the turmoil in Asia, entrepreneurs must carefully weigh both the risks and rewards of doing business there. Big opportunities mean big risks--but can also translate to big rewards. A well-thought-out plan will help you prepare for the ups and downs you'll face in the market. (For more information on the Asian economic crisis, see "Pulse," April.)
The Asian situation aside, these 10 BEMs share a number of distinct features that account for their role as leading markets for U.S. products, services and investments, including geographically large markets, huge populations and ongoing economic reforms. By 2000, these countries are expected to be a larger import market than the European Union (EU), and by 2010, BEM imports should surpass those of the EU and Japan combined.
According to Susanne Lotarski, the U.S. Commerce Department's Eastern Europe and new independent states director, U.S. companies are among the leading investors in Poland and surrounding areas. "The region as a whole is growing very rapidly, at a rate of 4 percent [annually], fueled by the entrepreneurial firms that have sprung up in the past five years or so," she says. In addition, the region's imports tripled in that period and, in 1997 alone, grew about 27 percent. "These will be fast-growing markets for U.S. companies and entrepreneurs."
As we near the 21st century, the changing tides of global trade will increasingly lure those with innovative minds and pioneering spirits across borders in pursuit of unknown--yet promising--rewards. Only through strategic steps, from evaluating the best time to go international to meticulously researching potential partners, will small businesses lower their risks and heighten their likelihood of success. And as globalization of the business landscape continues unimpeded, shifting the focus from domestic to international markets remains the natural next step. It won't be easy, but it won't be impossible.