International Business perspectives and Investment in Europe – Emerging Markets
Investment in Europe and it’s emerging markets is as easy as finding out where to invest and how to do business there. When it comes to international business and economic growth in the EU the emerging economies of Poland, Hungary, Romania, Bulgaria, the Czech Republic and Slovakia are some of the most rapidly developing and dynamic in the region.
When considering investing in Europe you only have to imagine the large domestic market, huge potential in development in infrastructure and education and relative proximity to other central markets, like the UK, to recognise the benefits.
Thanks in large part to the European Union Cohesion Policy Funding, Central and Eastern Europe (CEE) is at the forefront of recovery from the economic slowdown following the 2008 GEC and EU economic growth. Its highly educated, low-cost workforce, stable macroeconomic environment and favourable conditions also offer a wide variety of opportunity across sectors. Those include aerospace, precision, services, defence, motorways and IT & ICT; automotives, nuclear energy, shale gas and rail; as well as security, pharmaceuticals, medicine, electrical, retail, renewable energy and financial services.
When looking at where to invest in Europe these CEE countries are developing at a rate comparable to that of Russia and Brazil, while securing billions in structural funds to modernise, upgrade and improve its economies. By developing new industry and building on traditional strengths, the region has a population and a market of around 110,000 million EUR and a nominal gross domestic product (GDP) of almost 1.2 trillion EUR. Consumption is rising with economic growth, and according to Eurostat, the mean expenditure per adult equivalent increased by over 50 per cent in Bulgaria, while in Romania it more than doubled between 1990 and 2005.
These emerging markets and their rising middle class means an area of dynamic trade growth with countries like the UK, with only positive forecasts for international business in what is a 608 billion EUR import industry. As far as retail is concerned, the CEE has grown from a command economy with second-class products, to boasting some of the best shops and e-commerce opportunities around. Shopping complexes are as modern, if not more, than the region’s Western European counterparts, while national brands and international luxury imports have already penetrated Polish and Czech markets. Meanwhile, the global upturn is set to stimulate investment and trade in Europe, while more countries are expected to boost spending on large infrastructure projects. Water management, nuclear and ‘green’ energy are other more dynamic sectors and trade growth –of both skill and expertise, equipment and training –between CEE and its more advanced European counterparts should develop accordingly.
Poland is the largest beneficiary of EU Cohesion Policy Funding for the period 2014 to 2020, more than the 67.3 billion EUR for the previous round, while Romania, the second largest of the emerging EU markets, has been awarded 22 billion EUR. In terms of doing business in Europe, these funds will no doubt be directed to raising growth, productivity and investment in four major domestic sectors, including construction (by modernising equipment and reducing direct labour and indirect costs) and transportation (improving road freight productivity, specifically).
Infrastructural upgrades, energy modernisation, automotive growth and, of course, a store of natural resources in countries like Hungary, Romania and Poland, the CEE offers a competitive advantage for economic growth, boosted by international investment, government support and, of course, FDI. That’s why the UKTI has set up the Economic Scorecard, an online general index for prospective foreign investors to assess the opportunities in each region against their own requirements. That’s because, when it comes to international business, looking to investment in Europe and CEE (emerging markets) can only be a mutually beneficial partnership.