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E-mailAny questions about the degree to which the economies of the world’s biggest nations are intertwined were answered last year. The financial crisis that ripped through the U.S. was quickly felt around the world. “The biggest silver lining to the economic and financial crisis in the U.S. is that it has very little to do with globalization,” says Ian Bremmer, president of Eurasia Group, a leading global political-risk research and consulting firm headquartered in New York City. “The recession has been a story of domestic greed and poor oversight,” he says, not the downside of connectedness, trade or global supply chains.
Indeed, even as the U.S. travels the sometimes rocky path to recovery, CEOs say America remains their most important market. Nearly nine out of 10 CEOs cite the U.S. as an important or crucial venue for their business, and more than two-thirds call it the most crucial. China once again tied with Western Europe for a distant second as the strategically most important region. Although Ball Corp. CEO David Hoover says that “the health of the U.S. economy is fundamental to the health of the world economy,” he acknowledges that his company has more growth opportunities in places such as Eastern Europe and Brazil.
Mexico is cited by 3 percent of CEOs as the most important market. “Latin America has solid fundamentals and is better positioned to confront the financial turmoil than it has ever been,” says Daniel Hajj Aboumrad, CEO of América Móvil S.A.B. de C.V. (AMX), Mexico’s largest wireless-service provider. “It is true we may face a bumpy road ahead, but the opportunities are clearly there.”
Key Emerging Markets
In fact, half the business leaders polled consider emerging markets as opportunities for business. CEOs of manufacturing, construction and mining companies, as well as business-information services firms, are more likely to share that view than the chiefs of companies in the consumer products, retail, health, energy, utilities, banking, real estate and insurance sectors.
Size plays a role as well. Heads of businesses with market caps of $1.5 billion and above (65 percent) are more likely to see emerging markets as opportunities than are heads of companies with market caps of less than $1.5 billion. Stephen Roell, chairman and CEO of Johnson Controls Inc. (JCI), says China — with its still-robust growth rate — presents the biggest opportunities for the years ahead, followed by India and Latin America, especially Brazil. Quaker Chemical Corp. (KWR), says Chairman, President and CEO Michael Barry, “has invested heavily in BRIC [Brazil, Russia, India and China] countries over the past several years and continues to see these nations as key areas of growth.” And although Richard O’Brien, president and CEO of gold producer Newmont Mining Corp. (NEM), says his company is not currently doing business in China, he envisions a day when it might. “In some of the places where we do business, there’s geopolitical risk,” he says. “That’s not necessarily the case with China, but we still would want a partner there first.”
