Customers are winning over costs in globalisation

DAVOS - The world's business leaders are more wedded to globalisation than ever as their attention switches from cutting costs to winning new customers, research shows.

The emergence of economic powerhouses like China and India is a major theme of this week's World Economic Forum annual meeting in Davos, which brings together the world's business and political elite.

A PricewaterhouseCoopers analysis of responses from 1410 chief executives found 63 per cent were confident globalisation would have a positive impact on their businesses over the next three years.

Overall, 71 per cent expected to do business in China, India, Brazil or Russia over that period, with 78 per cent viewing China as the most significant market opportunity.

The survey underlines how corporate objectives and attitudes have shifted as key emerging markets have started to mature, generating a growing middle class with the inclination to buy Western goods and services.

"Cutting costs is no longer the sole purpose for globalisation," said PricewaterhouseCoopers chief executive Samuel DiPiazza.

"The economies of Brazil, Russia, India, and, of course, China were once seen primarily as sources of low-cost production.

"However, they now present substantial growth opportunities for multinational and locally-based companies and, at the same time, are producing a new crop of serious global competitors."

That view was echoed by a smaller survey of 200 executives from Deloitte Touche Tohmatsu, which found 58 per cent of manufacturers expected their company's revenues to grow substantially in emerging markets over the next three years.

The biggest obstacle to globalisation was considered to be over-regulation, cited by 64 per cent of respondents in the PricewaterhouseCoopers survey.

Trade barriers came a close second.

- REUTERS