Africa, China, and South America are currently three of the leading international business regions for Western firms—China for the sheer size of its markets, South America for its growing consumer classes, and Africa for its emerging business development potential. With this in mind, Linda Florence, vice president and dean of specialized programs at the University of Phoenix, provided some guidance on workforce issues and business climate factors for security managers who may find themselves working in one of those three regions.
In some respects, Africa is the last frontier for U.S. firms. Asian companies already have a strong foothold there, and there is a growing demand for consumer goods. However, much of the infrastructure is still in its infancy and many projects remain largely dependent on multinational corporations for funding.
A substantial portion of Africa’s economic health is dependent on oil and minerals. In the last decade, there has been a continuing trend toward reforms aimed at encouraging new commercial endeavors with a more favorable business environment and less government regulation. However, progress is far from uniform; some governmental functions are still not computerized and rely on antiquated paper-based systems.
Opportunities come with substantial risks. Political instability in some regions continues to present challenges, and sometimes dangerous situations. Africa also features unique hurdles in its business environment, such as limited access to energy and difficulties in registering property.
Like all emerging markets, companies need to be prepared to address unique risks and volatility such as Ebola and extreme forms of terrorism. The level of volatility should be carefully assessed. Security executives must develop long-term strategic priorities with agile crisis management plans to weather inevitable, short-term disruptions.
Chinese society is still based on collectivism, reflecting traditional values of loyalty and responsibility. Thus, Chinese workers tend to be committed to their work, with a focus on long-term rewards. They also prefer working in teams towards the greater good, compared with Western workers who seek more immediate gratification and tend to prefer working alone.
However, due to the influence of technology and influx of Western businesses over the past few decades, Chinese workplace characteristics are slowly changing, with more individualistic, Western values on the rise, especially among the youngest generation of workers who are just beginning to enter the workforce.
In addition, there is a well documented skills gap in China in many fields, including security. The demand for skilled labor is likely to outstrip supply by 24 million people in 2020, according to a recent McKinsey study. The country’s dwindling youth population may result in a widening skills gap after 2020 as well.
South America is made up of 12 separate countries—Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Guyana, Paraguay, Peru, Suriname, Uruguay, and Venezuela—as well as two nonsovereign areas—French Guiana and the Falkland Islands, a British overseas territory. Each country has its own distinct government, culture, and, in some cases, dialect.
The individual countries and regions that make up South America should be evaluated separately rather than viewed as a homogenous group. The countries share common history and language despite some variances in dialect, but there are remarkable ethnic differences, the understanding of which are vital to successfully managing operations throughout South America.
The richness of their individual heritage should not be ignored.
South America as a whole has experienced tremendous growth over the past decade with a growing middle class second only to China’s. The expanding middle class has created not only a well-educated workforce, but also resulted in a strong consumer population.
Still, there is significant income inequality in some regions, indicating the lack of skilled workers available in those areas. For example, Argentines and Chileans earn approximately one-third of U.S. per capita income, but 10 times as much as those in in Paraguay. At the same time, Brazil boasts a significant number of billionaires, even compared to the United States and Europe.
In addition, business operating environments can be distinctly different from those in the West. For example, some organizations may face risks such as government expropriation of their assets and arbitrary intervention. The complicated labor laws reflect a rich political history, as well as the traditions and values of the respective regions. Often, these laws disproportionately protect employees.