October 23, 2012 // By: Susan Galer
Can small and mid-size enterprises (SMEs) in emerging markets keep growing despite economic uncertainty? To find out, the Economist Intelligence Unit (EIU) surveyed over 500 senior managers from SMEs in Brazil, Russia, India, China and Mexico.
Despite widespread expectations that economic conditions will worsen, managers at SMEs in emerging markets appear confident about their firm’s prospects over the next 12 months. Sixty percent of respondents believe the overall business environment has become much more difficult over the past three years. Yet 78% of those same managers expect their turnover to increase during the next year. Additionally, 72% expect to boost their company’s workforce in the next 12 months.
SME executives shared the following business priorities for the next year:
Senior Solution is an example of the rapid growth experienced by SMEs in emerging economies. When this Sao Paolo based specialist software developer has its initial public offering (IPO) in 2013 on Brazil’s Bovespa Mais market for high-growth companies, CEO Bernardo Gomes expects to invest the proceeds into acquisitions for more growth. In the past six years, the firm’s revenues have increased an average 28% annually—far outpacing its own sector, as well as the Brazilian economy. If the IPO is a success, Gomes predicts even higher growth rates for his company.
Sixty-four percent of survey respondents are automating more tasks and functions now than three years ago. A senior manager at a Russian healthcare, pharmaceuticals and biotechnology firm describes the firm’s biggest single opportunity in the coming 12 months as “improving performance with new, innovative technology that helps cost reduction.”
Another example came from Oktogo.ru, an online travel agent founded in Russia in 2010. While the firm’s business model is web-based, it also now offers access through mobile platforms for both customers and suppliers. “Mobile is quite big in Russia and the penetration of smart phones is very high,” explains CEO, Marina Kolesnik. “The company is also investing in social media to build its brand, strengthen client loyalty, and grow sales.”