Competitive horizon

Citation

(2006), "Competitive horizon", Strategic Direction, Vol. 22 No. 4. https://doi.org/10.1108/sd.2006.05622dab.001

Competitive horizon

International consulting firm McKinsey and Company claims that India will account for more than half of business outsourced globally by 2010. The report, produced jointly with Nasscom, an Indian lobby firm, suggests that insurance, retail, banking and travel companies will be the main drivers of new outsourced business. It forecasts that India will collect around $60 billion a year from IT and outsourcing by the end of the decade. This would account for 7 percent of India’s gross domestic product (GDP) and around 44 percent of export growth. The report also predicts that the sector will need around 2.3 million workers by this time, compared to the 700,000 employed now. Likewise, increased outsourcing to India in related areas such as software and customer services will further increase demand for workers. But the report, as published by the BBC (www.bbc.co.uk), warns of a potential shortfall of some 500,000 skilled workers.

New Zealand urged to address export weakness

The New Zealand Institute has warned the country about its poor record in exports and foreign investment. The report, as published by the New Zealand Herald (www.nzherald.co.nz), claims that economic growth of recent years will not be sustainable without improved performance in these areas. It points to other small countries where rapid growth is largely driven through international trade. For example, Ireland has a similar population to New Zealand and exports account for nearly 80 percent of that country’s GDP. It iss significant that the figure of 29 percent in New Zealand is the same level as back in 1983. As a result, the gap between exports and imports is the largest for 30 years. The picture is further clouded by the fact that the bulk of the country’s exports are in slow growing industries and in categories, such as meat, where it is losing market share. In contrast, export in hi tech sectors is still relatively small despite rapid growth within areas like information and communications technology and biotechnology. The think tank also points out that a slowdown in overseas investment by New Zealand firms since 1990 means that just ten companies were responsible for around half the country’s international trade over the last year. In Australia, it takes the 700 largest exporters to make up a similar percentage. Another report will be produced in 2006 to try to identify what businesses and the government can do to better integrate New Zealand into the global economy.

A charitable boost

An article published by Business Owner (www.news.com.au) claims that small businesses have much to gain from donating to charity or supporting local causes. It points out that supporting local communities can raise a firm’s profile and generate valuable publicity. But the report also advises companies to target their charitable contributions accordingly in order to maximize benefits. Many small firms admit to being overwhelmed with requests for assistance, so it is best to concentrate on those that closely relate to core business activities. For instance, the report rightly suggests that a beauty salon would gain more from supporting any cause close to women. Firms should also monitor the benefits, such as by gauging the degree of publicity within the local media. The article also advises care in the type of contribution made. While charity donations can usually be offset against tax, companies may have to justify sponsorship of organizations such as sports teams in order for it to be classified as normal expenditure for promotional purposes.

UK aims to expand tourist industry

A significant increasing in spending by visitors to Britain from non-traditional markets such as Russia, India, China, Eastern Europe and Southeast Asia has prompted the UK’s official Tourist Board to target 11 emerging markets in an attempt to sustain these strong growth levels. According to an article published by Clearlybusiness (www.clearlybusiness.com), the aim is to increase income generated from tourism by £26 billion to £100 billion by 2010. New measures are being introduced to aid this, while also providing a platform to capitalize on the opportunities presented by the hosting of the 2012 Olympic Games in London. These measures include the board’s official web site VisitBritain (www.visitbritain.com) aiming to substantially increase its number of online visitors by introducing e-commerce to the site. It also hopes that improving the flight and accommodation details posted on its EnglandNet service will result in millions more people being reached.