Here at Tata Communications, we’ve been debating what it really means to be “global”. It is an interesting question to ask as one of our employees chimed in and said, “Maybe we are global but maybe we’re also local everywhere.” This didn’t slow the debate down. It actually added another dimension to it.
I think “global” refers to scale, reach and a multicultural knowledge and understanding of different people while “local” applies to how you use these attributes. This is an interesting distinction. It means that while you may have offices around the world, it only translates really well when you create value on a local level.
Our heritage and roots are in India but that hasn’t dictated our approach to opportunities in both developed and emerging markets. It has meant that we have deep emerging-market knowledge that we can use as a foundation for evaluating opportunities around the world and this is something that we are seeing global businesses become increasingly interested in.
According to research firm Revere, MNCs with greater exposure to emerging markets show better financial results. Between 2005 and 2010, MNCs with high emerging market exposure outperformed the S&P 500 by 32%.
We are seeing MNCs coming to emerging markets from developed markets to set up shop. This is where how well you can “go local” can become a real test for global players but, as we can see, those that go for it get real returns.
On the other side is the trend of emerging market businesses going global. In 2011, 100 of the companies on the Fortune 500 were from emerging markets and that is sure to continue to increase. China is leading that charge but the other BRIC economies aren’t that far behind. PricewaterhouseCoopers Emerging Multinationals report also notes that 2,200 Indian companies are expected to become MNCs by 2024.
This points to change and I don’t think my colleagues riddle about “global” versus “local everywhere” will be solved anytime soon. However, it is an interesting question to ask as developed and emerging market business look to each other for new opportunities.
So is your international business striving to be global or local everywhere?