Selling American Services to Emerging Economies?

A recent article in the Economist, “Export or Die”, highlighted opportunities for American businesses to sell to emerging economies.  It’s a fascinating read, and much of what is says flies in the face of common thinking about globalization.

Popular opinion is that the fast-growing economies in India and China are primarily sources of low cost labor, through outsourced services or manufacturing.  The Economist article points out that they are also growing markets, especially for – surprise! high end services and manufacturing.

America’s export boom is likely to be led by firms that are already global in scale and by sectors in which America has a clear competitive advantage: sophisticated, knowledge-intensive capital goods like microprocessors, and high-end services like engineering, oil-production services and even (witness KPF) architecture.

Few companies better capture that trend than Intel, a microprocessor giant. It is one of America’s most successful companies, and 80% of its revenue comes from outside its home country.

80%!  Another company with a similar strategic profile, which I wrote about here, would be EMC, which derives about 75% of its revenue from overseas.  Yet the other examples in the article are not as predictable: an American-based architecture firm, KPF, discusses a key project in Hong Kong.   The firm has used the same internet applications that help Indian businesses to send IT services to the US, to help send their architecture services to Hong Kong.  Their Asia business is a big part of why they did not have to lay off employees last year.

So where are the opportunities?  The Economist says that “Services are playing an increasingly important part in America’s exports. Their share of the total has gradually increased, to nearly 33% last year. Within that category, the private side, which covers things like business, professional and financial services, has been growing fastest.” Is it time to start opening up new sales territories at your firm?

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