June 26, 2020
New research released by Globalization Partners and CFO Research, suggests that most businesses are undeterred by the impact of COVID-19 and are still moving forward with plans for new or expanded international operations. More than half of the respondents expressed interest in expanding or adding operations in the Asia-Pacific region. The findings also claim that 83 percent of respondents said they are looking into a remote, global workforce model as a solution to the changes brought about by COVID-19.
Despite the pandemic-induced economic crisis, 45 percent of respondents are either currently expanding globally or only slightly delaying their expansion and will do it within one year. Another 9 percent maintain intent to expand internationally but remain in a year-long holding pattern.
“This research offers grounds for optimism that the economic crisis caused by COVID-19 has not derailed international expansion plans”
After North America at 71 percent, the Asia-Pacific region (excluding China), targeted by 65 percent, was the most popular region for new or expanded operations, according to the survey. Capturing market share was the top cited reason for expansion into these specific regions. Also, highly cited was the desire to expand sales, diversify investments and acquire top talent.
The data also suggests that employee health and safety was a top concern related to global expansion, cited nearly twice as much as the other leading issues, including new business strategies, increasing sales pipeline and revenue, and reducing organisational costs. In addition, 83 percent of executives surveyed expressed concern managing multiple third parties and stakeholders in a foreign environment during a volatile economic climate. And 74 percent of executives expressed concern with navigating foreign banks and international employee payroll in these volatile times.
Expansion had been or was expected to be a long process for most of the executives. 86 percent said their global expansion took or would take at least five months. That figure included 42 percent who put the time required at more than one year. As a result, dedicating resources to global operations was also a top concern for executives planning international expansion.