Just weeks before the Sept. 11 terrorists' attacks, the firm wrapped up a two-month survey of global expansion plans from respondents of 3,000 companies polled in all hemispheres. The numbers crunching was still under way Sept. 11. Now, researchers are redoing their work after the firm floated follow-up questions to gauge whether plans or expansion locations might have changed due to the terrorists' attacks. IDRC Texas World Congress participants in Dallas got a sneak preview of the initial results and insight to the latest information, all of which should be out within a month.
Schneider tells GlobeSt.com that he believes the financial industry will be the first to decentralize. But, he adds, companies across the board should consider following suit, particularly when it comes to telecommunications and research and development.
Prior to Sept. 11, nearly 80% of the respondents planned on broadening horizons outside their home country's borders in the next three years. The one caveat to the finding, says Schneider, is "Sept. 11 is certainly changing things, we think." The firm will know for sure once the follow-up data's compiled.
Pre-Sept. 11, the global economic downturn was at the forefront of the survey. Only 5% of the polled firms axed expansion plans. Nearly 20% planned to shift their geo focus, another issue arising from economies going south. Schneider is now predicting that more will opt to shift their geo focus and possibly feed domestic expansion instead of seeking foreign soil.
European companies were the most likely to expand outside their borders while North American businesses favored beefing up in their homelands. The survey even probed the method of expansion, with Western European companies leaning toward mergers and acquisitions. North American companies, on the other hand, preferred to build or lease new space while Asian firms opted for adding onto existing facilities, say data collators.
It's the same old story when it comes to new locations, with market access and lower operating costs still driving decisions. European and Asian companies say market access is key to the decision while North American companies eye the bottom line and are the most likely to make it a cash-conscious choice. When it comes to the nitty-gritty of the site selection process, real estate concerns are ranked 16.
The Top 10 destination points for expansion, in order, are the US, UK, China, Brazil, Germany, Mexico, France, Canada, Australia and Japan. For the first time, two second-tier developing countries made the Top 5. "That's quite different from a few years ago," Schneider told the IDRC crowd. The news wasn't quite so good for Ireland, which failed to make the Top 20 after being ranked in the Top 5 in 2000.
Schneider says the survey held a few surprises even for him. Brazil is nearly as popular as Mexico and Canada, particularly for the European crowd. Spain ranked fourth in the roster of Western European destinations. It was no surprise that China emerged the winner in the emerging Asian marketplace. "It's the strongest," Schneider says. "It has tremendous capacity, tremendous market and it's stable." In Eastern Europe, the "up and comers" are Russia, Turkey and Romania.
Schneider believes the post-Sept. 11 responses will show that companies are going to be more concerned than ever about a location's stability, which initially ranked second only to market access when it came to deciding where to locate abroad. "In times of stress and uncertainty, people go to stability and companies go to stability as well," he explains to GlobeSt.com. "There's more risk aversion (post-Sept 11). You go to who you know and who you trust.
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