The philosophy behind the theory of ― socio-economic engineering, (SEE) is simple: making investments in long-term, sustainable, and conscientious ventures (in sustainable and conscientious ways) in emerging markets or developing countries. This concept not only promotes socially responsible investment criteria, but it also promotes financial responsibility. An investment's productivity and profit-generating potential is not dictated solely by short-term profits. Investment criteria relating to the sustainability of an investment venture are not limited to portfolio management as the investment itself may have a longer and more productive lifespan. As we have attempted to promote this concept, particularly in the context of investments made in emerging markets,we have been surprised by how many sophisticated investment “gurus” ignore what the term “social” means. Who We Are Our "Socio-Economic Engineers" here at Bankstreet's Strategy "Den" come from an impressive range of backgrounds and education. Our staff’s diversity lets us find the best solution for making your ideas successful. We come from a variety of disciplines and career paths, ensuring that our approach considers all angles. Basically, whenever you have an investment idea for an Emerging market, we produce a strategy to make that idea work. We won’t rest until you’re completely satisfied.
The Bankstreet Group is your connect to doing business in many developing countries. We specialize in the Caribbean Diaspora where following and understanding the changing economic ebbs and flows of commercial rivers can often be a very tricky adventure.
Many multinational corporations are struggling to develop successful strategies in emerging markets. Companies in developed countries usually take for granted the critical role that all the services that many deem necessary to maintain the economics, health and cultural and social standards of an emerging market. Because of the many institutional voids, many multinational companies have fared poorly in developing countries. All the anecdotal evidence we have researched suggests that since the 1990s, American corporations have performed better in their home environments than they have in foreign countries, especially in emerging markets….and worse in developing countries. Not surprisingly, many CEOs are wary of emerging markets and prefer to invest in developed nations instead.
Many companies have shied away from emerging markets when they should have engaged with them more closely. This has become one of the underlining factors that see so many emerging market societies producing scores of illegal immigrants. Since the early 2006, developing countries have been the fastest-growing markets in the world for most products and services. Companies can lower costs by setting up manufacturing facilities and service centres in those areas, where skilled labour and trained managers are relatively inexpensive. Moreover, several developing-country transnational corporations have entered North America and Europe with low-cost strategies (China’s Haier Group in household electrical appliances) and novel business models (India’s Infosys in information technology services). Western companies that want to develop counter-strategies must push deeper into emerging markets, which foster a different genre of innovations than mature markets do.
Many corporations enter new lands because of senior managers’ personal experiences, family ties, gut feelings, or anecdotal evidence. Others follow key customers or rivals into emerging markets; the herd instinct is strong among multinationals. Biases, too, hender companies’ foreign investments. Companies that choose new markets systematically often use tools like country portfolio analysis and political risk assessment, which chiefly focus on the potential profits from doing business in developing countries but leave out essential information about the soft infrastructures there. In December 2004, when the McKinsey Global Survey of Business Executives polled 9,750 senior managers on their priorities and concerns, 61% said that market size and growth drove their firms’ decisions to enter new countries. While 17% felt that political and economic stability was the most important factor in making those decisions, only 13% said that structural conditions (in other words, institutional contexts) mattered most.
Just how do companies estimate a nation’s potential? Executives usually analyze its GDP and per capita income growth rates, its population composition and growth rates, and its exchange rates and purchasing power parity indices (past, present, and projected). To complete the picture, managers consider the nation’s standing on the World Economic Forum’s Global Competitiveness Index, the World Bank’s governance indicators, and Transparency International’s corruption ratings; its weight in emerging market funds investments; and, perhaps, forecasts of its next political transition. American companies can enter Britain comfortable in the knowledge that they will find competent market research firms, that they can count on English law to enforce agreements they sign with potential partners, and that retailers will be able to distribute products all over the country. Those are dangerous assumptions to make in an emerging market, where skilled intermediaries or contract-enforcing mechanisms are unlikely to be found. However, composite indices don’t flash warning signals to would-be entrants about the presence of institutional voids in emerging markets.
When companies tailor strategies to each country’s contexts, they can learn to capitalize on the strengths of particular locations. Before adapting their approaches, however, firms must compare the benefits of doing so with the additional coordination costs they’ll incur. When they complete this exercise, companies will find that they have three distinct choices: They can adapt their business model to countries while keeping their core value propositions constant, they can try to change the contexts, or they can stay out of countries where adapting strategies may be uneconomical or impractical. Can companies sustain strategies that presume the existence of institutional voids? They can. It took decades to fill institutional voids in the West