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Outlook on the Global Agenda 2014

  • About this report
    • Introduction by Klaus Schwab
    • Welcome from Martina Gmür
    • Preface by Drew Gilpin Faust
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    • 1. Rising societal tensions in the Middle East and North Africa
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    • 8. The expanding middle class in Asia
    • 9. The growing importance of megacities
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  • Download a PDF version of this report
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Outlook on the Global Agenda 2014 Home
  • Report Home
  • About this report
    • Introduction by Klaus Schwab
    • Welcome from Martina Gmür
    • Preface by Drew Gilpin Faust
    • Making the Outlook on the Global Agenda 2014
  • Top 10 trends of 2014
    • Introduction
    • 1. Rising societal tensions in the Middle East and North Africa
    • 2. Widening income disparities
    • 3. Persistent structural unemployment
    • 4. Intensifying cyber threats
    • 5. Inaction on climate change
    • 6. Diminishing confidence in economic policies
    • 7. A lack of values in leadership
    • 8. The expanding middle class in Asia
    • 9. The growing importance of megacities
    • 10. The rapid spread of misinformation online
    • In focus: The trends we need to know more about
  • Regional challenges
    • Donald Kaberuka: The cautious optimist
    • Building for the better: tackling inequality, unemployment and corruption
  • Networked thinking
    • Values
    • Employment
    • Interconnectivity, visualised
    • Interactive council map
  • Future agenda
    • The new space race
    • Mapping the future: The technologies changing our lives
    • The future of biotechnology
    • The future of shale gas
    • The future of democracy
    • The future of surveillance
    • The future of the Arctic
    • The future of multinationals
  • Browse by topic
    • Economics and Growth
    • Education
    • Energy
    • Entrepreneurship
    • Environment
    • Finance
    • Geopolitics
    • Governance
    • Health and Well-being
    • Hyperconnectivity
    • Innovation
    • Infrastructure
    • Risk
    • Sustainability
    • Society
    • Technology
    • Unemployment
    • Youth
  • Download a PDF version of this report
  • Download a calendar of 2014’s most significant events

The future of multinationals

  • Competitiveness
  • Economics and Growth
  • Innovation

 

header-multinationals


A container truck at the Yangshan Deep Water Port, part of the newly announced Shanghai Free Trade Zone © Reuters / Carlos Barria

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Author

Liu Jiren is Chairman and CEO of Neusoft Corporation, and a Member of the Global Agenda Council on Emerging Multinationals 

Author

Liu Jiren is Chairman and CEO of Neusoft Corporation, and a Member of the Global Agenda Council on Emerging Multinationals 

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Emerging-market MNCs will contribute significantly to the dynamism & growth of the global economy

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Emerging-market MNCs will contribute significantly to the dynamism & growth of the global economy

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Emerging-market MNCs can acquire best practices from developed markets and mature their home markets

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Emerging-market MNCs can acquire best practices from developed markets and mature their home markets

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Emerging-market multinationals need to build soft competitive advantage, beyond just selling products

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Emerging-market multinationals need to build soft competitive advantage, beyond just selling products
How will the global economy be affected by the rise of multinationals from emerging markets?

As emerging-market multinationals become key global players, their business activities will significantly enhance the integration and co-operation between emerging and developed markets, and contribute significantly to the dynamism and growth of the global economy.

With the advantages in cost-efficiency and innovation dynamism, these future global multinationals will accelerate the worldwide trend of ‘reverse innovation’, bringing more affordable and effective solutions to the world. The joint co-operation between emerging and developed markets in R&D, manufacturing and many other sectors will also be greatly increased, further boosting economic growth and helping to solve many systemic global problems.

Meanwhile, these multinationals will increase their competitiveness and will have the opportunity to acquire best practices from developed markets. Their own home markets will become more mature, and the innovation ability and business operations of the multinationals will be improved, greatly benefiting the long-term sustainable development of these markets.

From the survey

“By 2020, the BRICS are expected to account for nearly 50% of global GDP growth. Securing a strong base in these countries will be critical for investors seeking growth.”

Neeraj Bharadwaj
Managing Director, Carlyle India Advisors and a Member of the Global Agenda Council on India

This is a key time for companies from emerging markets that want to compete globally; we’ve seen companies from India, China and Russia all attempting to make the shift. The cost of doing business is always a factor; when global companies enter emerging markets their costs are cheaper than at home, but if these companies want to operate and hire in a more developed market, the costs are much higher. 

Chinese companies specifically have clear strengths. We can move fast, be flexible and make quick decisions. The trouble is that most of our business leaders are not experienced in understanding the world outside China – they’re not ready to go global because they don’t understand the culture, the legal systems, or the mentality.

That’s the biggest challenge for these companies. They need to build their soft competitive advantage, working on areas like social responsibility and learning how to employ people outside their home countries. When we look at Japan and Korea, we see companies successful in selling cars, mobile phones or TVs, so we know we can sell the product globally. But we now need to think ‘people to people’, not just ‘product to people’, and that’s a very different mindset.

 multinationals-infographic-q

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