28 June 2011 | Adam Leach
Emerging markets are considered to be the biggest
growth opportunity in 2011, according to 47 per cent of UK manufacturers
surveyed by Zurich Insurance.
The HazardWarning Report surveyed 100 senior managers from the manufacturing sector. It
discovered the majority favoured tentative movements or expansion into markets
such as Brazil, Russia, India and China (BRIC). Some 60 per cent felt their
exposure to risk in untested areas was high, resulting in a willing but cautious
approach to these markets.
The report said this ‘softly softly’ approach
to courting foreign investment will see companies look to gain insight into
potential risks and challenges associated with each market, and form alliances
with other organisations to ease entry into the market.
The majority (39 per cent) said failure to
succeed in those markets would be the single largest barrier to growth. This
was followed by 20 per cent who saw the burden of compliance and regulation as the
biggest obstacle. The difficulty in attracting talent (15 per cent), the inability
to invest in innovation (14 per cent), the availability of credit (8 per cent)
and the pressure to reduce the carbon footprint (4 per cent) were also impediments
More than half (52 per cent) identified their
supply chain as one of the three main factors dictating success next year, with
unforeseen disruptions cited as a key concern.
CIPS CEO David Noble said: “Business is
facing a new era of ‘hard globalisation’ with longer and globally
interconnected supply chains. Not understanding the risks inherent in each tier
can result in massive failures, not least to reputation, and can be costly to
terms of accessing these new markets, just under half (47 per cent) of firms
recognised that the onus is on them to take the initiative and benefit from the
fast-growing emerging economies, rather than looking to government or