- Singapore, Israel, Australia top business growth environment index
Singapore, Israel, Australia have beaten global competition to top the latest Grant Thornton Global Dynamism Index (GDI) which ranks the business growth environments of 60 leading economies.
These countries offer dynamic businesses the right mix of regulatory stability, a strong labour market, technological infrastructure, growth opportunities and access to finance. However, comparing these results with the perceptions of business leaders about operating in different markets, suggests misconceptions could be stifling future international growth prospects.
Singapore (rank 1) leads the GDI 2015, rising six places from the previous iteration. It ranks top for financing environment and no lower than 25 (economics and growth) in any other growth area, highlighting the country’s robust, broad-based offer to dynamic businesses.
Israel (rank 2) has also risen six places this year. It comes top for technology due to strong research and development spending, and in the top 10 for financing environment. Australia (rank 3=) drops two places but still ranks in the top five for business operating environment and labour market. Finland (rank 3=) and Sweden (rank 5) have both risen slightly, due to their favourable business operating environments and an advanced technology infrastructure.
Paul Raleigh, global leader - growth and advisory services, said: “Market entry decisions are some of the toughest a business leader ever has to face. There are so many factors - both known and unknown - to consider. Uncertainty about what lies ahead can make it hard to make the case for action to colleagues and funding partners, and to manage risk effectively.
“The GDI can be used as a tool to help identify countries of interest by drawing on 22 indicators weighted according to the importance attached to them by real business leaders, adding that vital human perspective.”
Perception vs reality
However, further analysis of the results suggests business leaders may not be fully aware of the drivers and challenges of operating in different markets. Comparing the reality of the GDI with the perceptions of business leaders from the Grant Thornton International Business Report (IBR) indicates some interesting knowledge gaps.
For example, Singapore, ranks top for the overall quality of its financial regulatory system in the GDI, but more than a quarter (28%) of business leaders questioned in the IBR perceive financial uncertainty or risk as a barrier to doing business there. The picture is similar for international investors in Germany where one in five cite financial risk as a barrier despite the country’s sound financial framework (rank 17=).
Paul Raleigh continued: “A lack of familiarity with a particular territory or region can skew perception and lead to unexpected challenges when expanding into a new market. For dynamic businesses, the trick is balancing instinct with reason, perception with reality.
“This study reveals how looking behind the headlines can uncover unexploited opportunities for dynamic businesses in new markets. The business world is always changing, with the realities on the ground often surprising business leaders who take a closer look. In order to maximise growth potential, business leaders need to refresh their perceptions of foreign markets in line with the market insights at their disposal.