by Karen Newcombe
McKinsey's report on business in the Urban World emphasizes the need for us to understand global business trends and the changes in influence that are underway. The report points out that the entire business ecosystem is evolving, and the developed nations of the West are seeing their predominance shift as numerous large businesses appear in the developing world.
This emerging world continues to gain in the number of big companies it hosts and in their impact. In 2010, 73 percent of firms with $1 billion or more in revenues were located in developed regions. McKinsey predicts that by 2015, 7,000 new large companies in this category will develop, and 70 percent of them will be based in emerging regions.
To make this number a little clearer, McKinsey's report points out that in 2010 there were 85 companies in the Fortune 500 from developing regions, only 17 percent of the list. By 2025, they estimate that number to be 230 firms – that's 46 percent, closing in on half of the Fortune 500 list.
For companies whose customers are other businesses, this is a significant shift in the geography of their markets – the main marketplace is no longer likely to be in the U.S. and Western Europe, but will shift to China, India, South America, and Eastern Europe.
These large business emerging around the world will shape the world economy, competition, market opportunities, and this means change not only for the giant megafirms themselves, but for all businesses. The report points out that your customers may be in different locations than they are now, your biggest competitors may be firms you haven't heard of yet, and your firm may need to rethink where to locate both headquarters and local offices. Your staffing may need to change considerably to bring in people familiar with language, business practices, laws and customs in places where you're not accustomed to operating.
Take a moment to download the free report by clicking the image above, or this link:
Even if you run a small business, the ideas and big perspectives in this report can help spark your thinking as you plan for 2014 and beyond.