BRITAIN’S diverse business and professional services sector makes up a vital, under-recognised part of this country’s economy. Ranging from accounting and credit information to recruiting and management consulting, its companies are leading their competitors in capitalising on the development of emerging markets.
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The financial director of Hays, Paul Venables, says emerging markets now make up 10 per cent of its business. These are growing markets for the global recruitment company. Three years ago, emerging markets made up just 3 per cent. Similarly, Steve Varley, managing partner designate in the UK and Ireland for Ernst & Young, says: “With each passing year, these emerging markets become more and more important to our global organisation.” Last year, the professional services firm saw double-digit growth in many markets. Richard Fiddis, who is managing director of strategic markets at Experian, explains that in the last financial year emerging markets accounted for around 20 per cent of the global credit information group’s revenue. Although currently making up only a very small part of the business, Nick Stagg, chief executive of Management Consulting Group (MGC), says emerging markets “present a huge opportunity.”
Venables, Fiddis and Varley all say that experience in developed markets has been indispensable to their success in entering developing markets. Fiddis cites four reasons for Experian’s success. Firstly, there was a pull from multinationals they already work with in developed markets to also work in developing markets. Secondly, the trends of growing consumerism, demand for credit, and fraud have been working in their favour. Thirdly, as a market leader, big players in emerging markets wanted to work with them. Finally, Fiddis states that Experian has fostered a culture in the company where people are willing to move abroad. Venables says this culture of staff flexibility has been important for Hays, too. When Hays entered Mexico, it was able to take a manager out of Paris with a Mexican wife to lead the team.
Fiddis says the biggest challenges will come from adapting to local markets. In India, Experian by-passed traditional direct marketing services and introduced digital marketing services because of the potential for mobile phone technology. For Stagg of MGC: “What is needed is western approach and delivery with a full understanding of the local market which requires well trained local staff rather than an all ex-pat approach.”
The main challengers for Hays in emerging markets are fellow UK recruitment companies Michael Page and Robert Walters. Despite facing small local players, Venables doesn’t see growth slowing in emerging markets unless there is another recession. Varley agrees: “Global recovery has really been powered by the emerging markets, so anything that might threaten their performance would have a major impact on the world, be that inflationary pressures or a slump in their import countries.”
It can be hard to get a handle on the companies that make up the business and professional services sector, but we would all notice if it was to disappear. As would much of the rest of the world, which relies upon the companies’ technical knowledge to drive forward their growth. The UK’s history of internationalism, free trade and contracting out is certainly paying dividends.