A majority of chief financial officers are optimistic about their companies’ global expansion plans but there is a struggle to find people with the right skills in emerging economies, a BDO survey found.
The BDO Ambition Survey interviewed more than 750 chief financial officers from companies with a turnover of $50m to $1bn in 13 countries. 95% of chief financial officers said they are confident about global expansion and predict that in three years almost half of revenue will come from business abroad.
The major factors that make global expansions attractive are an increased market size, access to new costumers and higher growth areas. The major challenges were intensity of local competition, red tape and bureaucracy. Half of the respondents said a challenge was finding the right people to help them realise international investment plans.
BDO chief executive Martin van Roekel said the results were somewhat surprising due to the challenging global economic environment.
“I think the result has to do with the markets they are focusing on, like China, India, Brazil,” Van Roekel said. “There is a general consensus that when focusing on those emerging markets success is still expected by the majority of participants in the survey.”
Van Roekel said finding people with the right skills is one of the main concerns because “if you can’t find the right people it increases the risk; the main reason mentioned by the chief financial officers for which a business is not successful is the lack of staff with skills and knowledge”.
Van Roekel said it could take between 5 to 10 years for some emerging economies to produce a sufficient pipeline of talent with the right skills.
According to the survey, China is perceived the most challenging country to do business in. Those interviewed said in China opportunities go hand-in-hand with risk for reasons including difficulties in understanding local language and culture.