Saturday, 08 September 2007

Western directors clueless when it comes to SA

MOST western directors recognise that SA and other emerging economies will reshape global business, yet they are woefully ignorant about SA’s economy and industry.

They are so uncomfortable about doing business here that they would rather deal with India, says a study by the UK-based telecoms company, BT.

Nearly seven out of 10 directors in the UK, France, Germany and the US do not know the local currency is the rand, and 27% could not name SA’s main exports or industries.

While 61% admit it is “crucial” that their business is able to work with the economies of Brazil, Russia, India, China and SA (BRICS countries) to succeed in the long term, one in five rate SA as the country in which they are least comfortable doing business.

Different legislation and regulation is seen as the most significant barrier to effective collaboration with South African businesses by 12% of respondents. The other top barriers are data security, which worries 12%, and political interference, which concerns 9%.

BT commissioned Datamonitor to poll 800 senior executives in companies from a range of sectors, with turnovers from $10m to more than $1bn.

The findings show that businesses in established economies have a good deal of uncertainty about working with businesses in SA and are ignorant about some of the most basic facts of business life in emerging markets, says Brian Armstrong, BT’s vice-president for the Middle East and Africa.

Western executives have a lot of homework to do to be ready to work effectively with businesses in SA, but local executives need to play their part too by better conveying the message that their systems are as modern as anywhere else, and their regulations are as secure, he says.

South African businesses have shown remarkable agility at adopting new collaborative tools and technologies; quicker, in many cases, than in the US or Europe. Yet nearly one in three western directors perceives SA as the least advanced of the BRICS countries in terms of information and communication technology support for businesses. “These are troubling findings,” Armstrong says. The World Economic Forum ranks SA as close to India and ahead of Brazil, China and Russia in terms of technology, but the message hasn’t filtered through to the first world.

Western businesses have the systems in place to work with SA, but lack the knowledge to do so effectively. “How can they determine winning strategies for global business if they have such an outdated idea of what is going on in significant markets like SA, and how its economy will affect them?”

The technology that enables collaboration between companies and countries is in place, but many western businesses are unprepared for the effect emerging countries will have. That needs to change, he says.

Source: Business Day

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