Hong Kong, 20 May 2014 – According to the latest international business survey by Regus, the global workplace provider, while 42% of companies around the world are looking for growth in domestic markets, outward-looking Hong Kong is bucking the trend.
The research canvassed the opinions of more than 20,000 senior executives and business owners across 95 countries. It show that, while just 17% of firms globally are looking overseas to drive growth, in entrepreneurial Hong Kong the number targeting international markets is 26%. What’s more, less than 20% of Hong Kong respondents are pinning their growth hopes on domestic market expansion.
However, Hong Kong faces competition from its regional rival, Singapore, where 33% of firms surveyed reported they are mainly experiencing growth by expanding abroad, and just 17% are aiming to expand in new markets within the country.
Neighbouring Taiwan, is also on the lookout for international opportunities. Nearly twice as many firms there than in Hong Kong – 46% – reported that they are mainly experiencing growth by expanding abroad. Only 15% reported experiencing growth by expanding in new domestic markets.
The picture is very different for Mainland China, where just 13% of respondents reported that they are experiencing growth by expanding abroad. This compares with 57% of respondents report mainly experiencing growth by expanding in new markets within the country.
According to the research, the five most important barriers to international growth by HongKong firms are seen as:
1) Ability to hire top quality staff (86%)
2) Access to flexible office space (69%)
3) Lack of local knowledge and connections (65%)
4) Lack of market information (56%)
5) Difficulty of building a local distribution network (48%)
The focus on home-grown growth is even more marked in emerging markets, where three times as many companies (51%) are seeking it compared to the number looking for growth overseas. This is evidence that the results of economic recovery are starting to benefit more people in developing countries as consumer confidence begins to recover, and reliance on exports diminishes.
“Asia has become the engine of global economic growth. Ironically, the most populous region on the planet is also suffering a shortage of talent. A number of skills sets are in short supply … and set to become scarcer as organisations scale up to accommodate growth,” said Martin Cerullo, Managing Director, Development, APAC for the global talent acquisition and management provider Alexander Mann Solutions
“Taking a flexible approach to talent management can pay significant dividends. Ideas include targeting local talent that is currently abroad, or changing work practices to accommodate the requirements of their workforce. Rather than requiring staff to fit a particular profile or working model – the traditional office-based, 9-to-5 approach –more companies are embracing flexible working models,” he said.
His views are echoed by John Henderson, Chief Financial Officer, Regus Asia-Pacific, who notes there has been an important reversal in the past two years, with firms now experiencing more growth from domestic markets than through foreign expansion.
“This change reminds us of how important it is for businesses to remain flexible and scalable so that they can respond to market volatility, but also highlights an important increase in consumer purchasing power in emerging economies," Henderson said.
“Regardless of whether businesses are expanding in new markets in their own country, or abroad they rely on a series of key factors. They need to access reliable and up-to-date market information, to network and to have easy access to a number of options when considering the best location to set up in. In addition to these needs, flexible working space allows them to rapidly react to the markets and keep their capital free for investment in further growth. Businesses need to be able to rapidly expand, but also to retract speedily should growth possibilities open up elsewhere,” he added.