3Ds of Emerging Markets’ Business Disconnect and What To Do About It.

By Alexander Gordin (Due to numerous reader requests this article is being posted in full. An abridged version has been published previously)

Decades of international business and project development experience in over thirty countries have left my colleagues and me with two indelible conclusions: roughly 80 percent of supposed international business opportunities are a pure waste of time. Yet, of the 20 percent that are potentially solid and very lucrative deals, only a small percentage actually get consummated. Given, that this small percentage amounts to trillions of dollars, only underscores the fact that trillions more are left on the table undone. After looking at countless business opportunities, it has become increasingly clear that a substantial portion of the unrealized opportunities results from several repeating and recognizable factors:

GlobalFelix

Developing countries excluding LDCs (Least Dev...

Developing countries excluding LDCs (Least Developed Countries) Newly industrialized countries Other emerging markets Other developing economies (Photo credit: Wikipedia)

Lack of cross-cultural communications and relationship building skills among counter-parties involved in transaction

Lack of ADVANCED international business experience

Lack of a mechanism to properly package, evaluate and structure opportunities both by their sponsors and potential participants

Lack of a platform to develop in-depth relationships with QUALIFIED counter-parties in multiple markets

Thus the following challenge emerges – If someone could filter and trap the “soap bubble” 80 percent and yet at the same time cost effectively unlock even a small portion of the unrealized opportunities, it could create billions of dollars of additional economic value for those involved.  Thus a group of experienced international executives, aided by a distinguished global advisory Board, members of the international media and diverse group of international professionals has developed and is proud to present Emerging Markets Business: Unlocking American Markets Challenge™

As their economies grow, emerging market countries are aggressively building infrastructure, and developing commerce.  These countries need a host of resources including suppliers, professionals, investors, franchisors et cetera from outside their borders to help them capitalize on their potential.  At the same time, many companies from developed nations, particularly from the U.S., are eager to provide products or services.  However, the market of connecting these buyers and sellers is extremely inefficient to say the least, wasting valuable time and money, until now.

We have developed a program that effectively and efficiently connects emerging countries with companies and investors that are ready, willing and able to provide needed products and services.  This initiative addresses several fundamental problems currently hindering international business and provides the platform for pre-selected North American exporters, investors, project developers and franchisors to access and take advantage of over $5 billion of qualified business opportunities in more than 30 of the most promising emerging markets.

Fluent In Foreign™ is developing this initiative  jointly with the Broad Street Capital Group, and in cooperation with several leading law and accounting firms, Global Trade Magazine, RSL Media LLC, publishers of the New York Enterprise Report and the Princeton Council on World Affairs.

The premise is very simple:

PROBLEM

As international business grows globally, there are many more entrants and more countries competing to attract foreign investors, partners and suppliers seeking to enter new markets. These emerging countries often spend millions of dollars and countless hours, let alone enormous opportunity costs because they lack proven and efficient processes to identify and secure qualified suppliers and partners.

There is a substantial number of emerging market companies of all sizes seeking to export their goods and services in the areas of IT, technology commercialization, component manufacturing, agriculture, energy, biofuel, foodstuffs, beverages and spirits, aerospace, defense, oil and gas services who stand to benefit tremendously from entering or expanding their presence in the American markets.

There are also entire medium size (US$15-500 million business and project development sectors across many emerging market countries that are begging to be funded and there are funds readily available in the U.S. to fund tens, even hundreds of companies and projects in sectors ranging from hospitality, food security and ICT to agriculture and alternative energy.

Injecting significant funding into this slice of emerging market economies will generate thousands of new jobs; increase corporate efficiency and productivity by introducing latest western technologies and production tools. It will also create a multiplier economic effect, which will reverberate throughout the country’s business and consumer sectors.  Yet, for the last couple of years, only a tiny sliver of the entire American originated debt and equity financings that could have been done in many emerging market countries, has been completed.

Finally, multiple business owners seek to attract proven U.S. franchise brands to their countries and many seek to invest their hard-earned profits into American businesses and commercial real estate

Because of the size and nature of these projects, small and middle market companies American companies are often the most suitable counter-parties for these projects. Yet, most middle market suppliers are ill-equipped to pursue international opportunities and lack the means and know-how to secure and identify suitable international partners. They also lack cross-cultural understanding and communication skills and are often unaware of various risks such as government expropriation, theft of intellectual property, non-payment, physical or reputational harm and ways to mitigate them.

The big question is WHY? Of course, global economic recession has played its part. Yet for those of us who are focused on cross-border market entry services, marketing, financing projects, enterprises and trade, the answer is pretty simple – Disconnect, Distrust and Deficiency, or as we call them 3Ds.

There is disconnect in understanding of western financing,  or market entry processes and of the requirements set forth by the U.S. Government agencies, businesses, consumers and financial institutions.  Many businessmen from emerging market countries spend a lot of time and effort in putting together sleek-looking presentations overloaded with information, setting up technical models and writing business plans using prepackaged software. Yet, most of them fail to truly understand the needs and requirements of the American consumers, businessmen or financiers and their focus on product reliability, branding, compliance requirements, project’s ownership, provenance, due diligence etc. They also do not understand the fact that unless they commit financially to the market entry or capital raising processes, they will not be perceived as serious players.

There is also a huge image problem that many countries have in the West. Although some of it is well deserved, a big part of it is gloom and doom that does not accurately portray the situation in those countries.

Then there is distrust. Over the last two decades, businesses in emerging market countries have been pillaged by every type of western con artist known to man. Many swooped in, promised local businessmen untold riches, massive credits and investments, collected fees and then vanished.  No wonder today companies in many countries are wary, scared and mistrustful.

Finally, there is deficiency.  Deficiency of cross cultural knowledge among the process participants on both sides of the Atlantic; lack of early stage pre-project funding and absence of an integrated well-defined and officially endorsed process, which would nurture and properly prepare companies and projects to be able to take advantage of all the available opportunities.

Estimates are that in today’s environment only one of 20 potentially eligible projects and companies seeking financing in emerging markets get funded. What this process needs in order to unlock a floodgate of financing, as well increases in exports and technology transfer partnerships, is cooperation between public, non-profit and private sectors,

To stimulate the process a modest amount of support from the federal and state governments, investment promotion agencies, national industry associations and chambers of commerce will be needed throughout emerging market countries. The Government should use its investment promotion agencies to work with those of us in the private and U.S. non-profit sectors in order to provide official endorsement, information dissemination, and participation leadership to encourage, or even mandate local businesses to take part in the process without fear of being duped.

This endorsement and support, will be combined with a focused private sector effort to train local companies on how to more effectively access U.S. markets; educate American investors on the benefits of doing business in emerging market countries; change negative image plaguing many countries through strategic public relations and information efforts; and provide effective networking opportunities for trained and qualified local companies to meet potential qualified investors, partners and customers on an ongoing sustainable basis..

Simply given the current portfolio of alternative energy, agriculture, infrastructure and ICT projects, which we are reviewing, we can confidently say that with just a modest amount of local government support, combined with corporate focus, training and financial commitment, emerging market companies can attract at hundreds of millions in equity and trade financing in the next 18 months.  Thousands of jobs and the multiplier effect generated by this initiative will help the government strengthen its business electorate base, improve country’s investment image and its overall economic condition.

On the export side an increase of at least 25% of exports to the US over the same period is absolutely achievable

American businesses and professionals who are Fluent In Foreign Business stand ready to help small and mid-size companies in over 40 emerging market countries meet the challenge of successfully creating at least $5 Billion of tangible economic value in the next 18 months.  May 28thth-30th Broad Street Capital Group, along with Fluent In Foreign Advisory Board will hold a briefing and project review sessions for all interested companies, to select projects eligible for the 2013-2014 financing, export trade, investment and franchising for  inclusion into Emerging Markets Business: Keys to America Challenge™.

SOLUTION

The Emerging Markets Business: Keys To America™  is an invitation only multi-year program that systematically solves the aforementioned problem.

  1. We identify the most attractive emerging market nations and, through their investment agencies and other sources, solicit  their best investment, procurement, supply, service, and franchise opportunities.
  2. We identify and pre-screen companies already involved in international business or who are seeking to enter the international business arena, as well as professionals who serve them.  We then INVITE them to become members of the Keys To America accelerator for a minimum commitment of 2 years
  3. We have created a platform, online and in-person, which enables these participants to meet, screen, build relationships and commence projects. We also offer unique business tools and a suitable support environment so participants can train and improve their ability to conduct effective international business resulting in increase in ROI for all.

CULMINATION

The initiative will culminate in a spectacular marquee event in May of 2015 – The Emerging Markets Business: Unlocking American Markets Conference at Sea. This is a unique international business forum where the above-mentioned pre-screened participants will meet to get learn more about each other, forge stronger relationships, improve their skills and consummated deals. This event will take place over a 5-day Atlantic Voyage aboard USS Keys To America, a fully chartered 2,050-passenger luxury liner.

On May 16th, 2015 the USS Keys To America liner will be setting sail for a five-day, five-night invitation only voyage from Miami to Cozumel Mexico and Grand Cayman.  The journey, however, will be far more than a simple vacation.  We are gathering hundreds of government officials, traders, franchisers, suppliers, investment professionals, financial professionals, and business executives from over forty countries for this exclusive venture, making sure that passengers experience both the joy of spending a relaxing time discovering the world beyond the desk, and networking with the most prestigious and influential leaders in business.

VisionOftheSeas

Process

We will invite 40 emerging countries (via their investment agencies) to each showcase ten of their top projects and companies to showcase their best national business opportunities.  We will also invite up to 500 qualified companies, including exporters, project developers, importers, franchisors, direct investors and their advisors to become part of our initiative.

Over the next eighteen months, we will hold a series of qualification events and training workshops to select top opportunities, narrow down the list of countries and rank the participants according to their skill and ability to undertake projects.

Our workshops and specialized training will help participating companies to increase their personnel’s skills to successfully convert international opportunities to deals and be positioned for significantly higher results than they have achieved in the past.

Emerging Markets: Keys To America Conference at Sea™. Help us shape Your experience.

 

 

WORK HARD, PLAY SMART.  BECOME FLUENT IN FOREIGN BUSINESS!

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About Alexander Gordin
An international merchant banking professional with over twenty years of business operating and advisory experience in the areas of export finance, international project finance, risk mitigation and cross-border business development. Clients include foreign governments, municipalities and state enterprises as well as Fortune 500 and small/medium enterprises. Strong entrepreneurial instincts, combined with leadership and strategic skills. Transactional and negotiations experience in over thirty five countries. Author of the highly acclaimed "Fluent in Foreign Business" book and creator of the "Fluent in OPIC", "Fluent in EXIM","Fluent In Foreign Franchising", "Fluent in FCPA",and "Fluent in USTDA" seminar/webinar series. Currently developing "Fluent In ......" seminars and publications. Co-author of the Fi3 Country Business Appeal Indices. Extensive international business development and project finance transaction experience in healthcare, aerospace, ICT, conventional and alternative energy infrastructure, distribution and hospitality industries. Experience managing international public and private corporations. Co-Founded three companies abroad. Strong Emerging and Frontier Market expertise. Published and featured in numerous publications including: The Wall Street Journal, Knowledge@Wharton, NBC.com, The Chicago Tribune, Industry Week, Industry Today, Business Finance, Wharton Magazine Blog, NY Enterprise Report, Success magazine, Kyiv Post and on a number of radio and television programs including: Voice of America, CNBC, CNNfn, and Bloomberg. Frequent speaker on strategy, cross-border finance and international business development. Executive MBA from the Wharton School at the University of Pennsylvania. B.S. in Management of Information Systems from the Polytechnic Institute of NYU. Specialties Strategic Management Advisory, Export Finance, International Project Finance & Risk Management, Cross-border Negotiations, Structured Finance transactions, Senior Government and Corporate officials liason

2 Responses to 3Ds of Emerging Markets’ Business Disconnect and What To Do About It.

  1. Pingback: Unlocking American Business, Capital & Consumer Markets by Companies From Emerging Markets | Emerging Markets' Business: The Keys To America!™

  2. Pingback: 2013 Fi3E INDEX™ RANKS APPEAL OF 180 NATIONS FOR U.S. EXPORT OPPORTUNITIES | Fluent In Foreign Business

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