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Grant Thornton: Red tape threatens to obstruct globalisation opportunities

By Rob Starr, Content Manager,

New research from the Grant Thornton International Business Report (IBR) reveals that the number one barrier to globalisation opportunities  reported by businesses  is legislation and regulations.

Ed Nusbaum, CEO of Grant Thornton International Ltd., said: “Dynamic businesses are constantly looking for growth opportunities and expanding into different markets can boost business growth prospects through access to new consumers and new technologies. But mountains of regulations and legislation could prevent businesses considering overseas opportunities.

Ed Nusbaum from Grant Thornton added: “Globalisation is no longer simply a case of mature economy businesses looking for low cost labour and land in emerging economies. Increasingly businesses in emerging economies are looking to invest in peers from mature economies in order to access key skills, processes and technologies.

“With governments cutting spending, growth rates slow and unemployment rates high in most of these mature economies, the danger is that protectionist regulations are adopted to shelter local businesses. However, investment from higher growth emerging markets might be just the thing to get their own economies moving.

“Clearly every economy in the world has a different business operating environment so moving across borders will create challenges. And strong regulations and legislation can be a good thing, assuming they are designed to drive trade – not drive it away. That regulations and legislation are cited by businesses around the world presents a clear challenge to policymakers.”

These findings are drawn from the 2012 Grant Thornton Emerging markets report, which also ranks the 27 largest emerging economies in terms of the opportunity they offer for business investment using a range of economic indicators. As with the 2010 report, China tops the index, followed by India and Russia. Brazil has moved above Mexico into fourth place. The biggest movers include the ‘frontier economies’ of Indonesia, Chile, Nigeria and Peru.


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