Development of Services that Support International Business

Ecosystem of Services

Any business in order to function and grow needs an ecosystem of suppliers, vendors, and infrastructure that supports the operations of the business.

For instance, if a certain company wants to setup its operations in a particular place, it needs land, roads, water and power supply, and vendors and suppliers to supply its raw materials or other factors of production, and most importantly, provision of basic services to its employees in the form of transport, shopping avenues, and schools and hospitals. Hence, there needs to be an entire ecosystem that supports the business and its operations.

Likewise, international businesses too need services that support their operations and this includes quality housing and infrastructure for its employees including the expatriate ones. This means that if an international business has to setup shop in a particular country, it needs the existence of top quality infrastructure.

China and India: A Study in Contrast

If we take the examples of India and China in this regard, they present a study in contrast. Whereas China built modern airports, roads, and other infrastructure, India is lagging behind in providing even the most basic facilities to the international businesses.

No wonder that foreign and western multinationals are more open to invest in China rather than in India. Moreover, the fact that India took its own time to construct international standard airports in its Metros barring Mumbai is a testament to the failure of the country to develop its basic infrastructure.

What is more appalling is that the roads and ports are also yet to be developed fully. On the other hand, the services including quality English education and other services are better in India than in China. Of course, this is not to say that India cannot develop its infrastructure but rather the fact that because of policy paralysis, political gridlock, and bad governance, it has not been able to ramp up significantly.

The Next Breakout Nations and Fallen Stars

The implications of this are very clear. In order to attract foreign investment, countries must get their basic infrastructure right. The examples of the next Breakout Nations like Vietnam, Nigeria, and some countries in Latin America serves to illustrate the importance of getting the infrastructure sorted out.

Moreover, as the competition for foreign investment accelerates and intensifies, the winners are those who can provide the ecosystem of services better, faster, and smoother. This is the lesson that the stars of yesterday like Thailand, Indonesia, and Russia have learnt as their economies collapsed because of skewed investment priorities that put more money into the hands of a few rather than the collective.

Indeed, though the previous section criticized India for not improving its infrastructure, the fact that development has been more equitable than the other countries means that the societal services are more evenly balanced.

Closing Thoughts

Finally, the fact that along with capital development, human development needs to be improved as well is clear from the examples of South Korea, Taiwan, and Malaysia. These Asian Tigers have shown that given the right mix of infrastructure and services to support international businesses, they can match the development of the western nations.