How The International Economy Affects The Business ?

The global economy continues to become more of the standard economic market. The ups and downs of the last few years have created challenges for most of the international economies affected. The global economy continues to merge and to become more inter-dependent. A graduate from an international business school program is in greater demand now that the world markets have interchanged many critical economic factors. The demand for an international business education is higher than it has been before and is expected to become greater in the future.

Jobs for qualified international business degree graduates have increased in number since the world economy has become more volatile. International business graduates are being hired because of their multicultural and multiple language capabilities. This type of business graduate may be trained in sales and marketing and may travel to other areas of the economic world. Marketing companies, finance consulting firms, and nonprofit organizations hire international business graduates for their specific multicultural expertise or for their specialized training in an account matter.

A graduate may receive a bachelor’s degree in business with a minor in international affairs. A masters degree can add to a resume for an international studies student. Competitive positions within this international business career field are often enhanced with advanced degrees. Certifications can be additional factors that create advantages for those students wanting to be chosen over a similar competitor.

The recent economy does not seem to be limiting the number of jobs available for international business career students. The jobs available may need advanced degrees in order to eliminate a certain type of competitor. Certain curriculum choices within a business program can assist a graduate in becoming more marketable for the job market itself.

Certifications and licenses are frequently used to hire international business graduates. A certification or license can be gained in project management or in international banking. An advanced degree, a license in a specialized field of study, and multiple language capabilities is a marketable package for this area of business. Three years of experience in a field of specialization may be required as well. There may be a requirement of documentation for these years of experience. References may be a request.

The volume of international business clients has grown over the past several years. This increase in international business clients has been a result of the information interchange and inter related business transactions that have developed as a new world business norm. The economy in recession has created a greater demand for marketing consultants, international finance experts who are bilingual, consultants who are knowledgeable about world currencies or world trading, experts in imports and exports, and those marketing or sales professionals who are willing to travel overseas extensively.

International business clients may increase for those business graduates with a specialization in global environment strategy, business plan development, emerging new markets, operations and supply chain management, and management accounting. The particular account customer may need a certain expertise in order to solve an accounting issue, for example. Management techniques learned in an international business curriculum would need to include government implications and restrictions as well.

A career in global operations may need specific skills in analysis, human resources, communication, technical writing, presentation applications, risk analysis, and problem solving. These particular skills would be necessary for inclusion on a curriculum vitae that is presented to an employer as a list of academic character and knowledge. International business clients may need expertise in public policy and cultural diversification. A curriculum vitae that lists these skills will help to qualify the international marketing applicant, for example.

The global economy has had several ups and downs over the past several years. Some international economies have been in recession. Other global economies are in a type of economic bubble with some current concern about the future national business status. The international business student is in greater demand since the world economies are changing significantly. Advanced degrees are necessary in business and finance today as well. Licensing and certification may be necessary for these job applicants in order to position themselves ahead of their employment competition. International business clients are requesting that the national or foreign consultant be at least bilingual in many instances. A knowledge of the foreign customs and cultural differences is critical today.

“The world is a global marketplace and the financial world is a large Web that extends throughout almost every country and region.”

Ken Yancey, a former banker and the current CEO of SCORE, a nonprofit association helping Americans launch and scale small businesses, agrees, pointing out that as part of the world economy, “the U.S. holds the debt of other countries, and other countries hold our debt. The rise and fall of one nation’s economy affects the global economy.” 

Getting a loan might become harder for small businesses, says Gazaway when Basel III regulations kick in January1. According to a report in The New York Times, these rules require banks to maintain a certain ratio of capital on hand “to protect themselves against potential losses.” Gazaway says, “Basel III is going to change the way banks look at risk, leverage and liquidity, and encourage a more responsible form of lending.” This should, he adds, have us “cheering for the success of the European Central Bank (ECB) because we will feel the ripple effect whether it’s good or bad.”

Adding to this global interdependence Leahy says is that “The dollar is still the reserve currency of the world, so monetary policy in the U.S. affects the world.”

Nearly everyone agrees the two big global hot spots to keep an eye on are the European debt crisis and the slowdown in China. Gazaway says, “All indications are that China’s growth is slowing down,” which Leahy notes has already negatively impacted other nations like Australia. In fact, he says, “China is a river of resources, and a slowdown there affects many developing and emerging nations.”

Does this mean the money lending pool will remain indefinitely dry? Not necessarily, says Yancey and Leahy, though they both point to alternative sources of funding. “The [lending] pendulum has swung so far in one direction,” Yancey says, “that unless you have perfect credit” a big bank is not likely to help you. The good news is the smaller banks were not as impacted as the big banks. It’s been ideal for them,” Yancey says, "since they can cherry-pick the best small businesses” to lend to.

Leahy agrees. “For20 years banks were the go-to place for small businesses that needed funding,” he explains, "but now there’s a void in the market. Small businesses need capital to run, so [they] need to go in a new direction.”

And once again it’s technology to the rescue. Leahy says for businesses that have no collateral to put up, or those that haven’t been in business long enough, new technologies, in the form of peer-to-peer lending networks and lending clubs can help fill the void. Yancey also suggests crowdfunding as a good alternative for businesses looking for capital. “It will be interesting,” he says, “to see how the government decides to regulate the crowdfunders.”

Globalization also has an upside. Yancey suggests small businesses think about exporting, though he stresses, “You have to be concerned about the currency risk, and insurance and shipping costs.” Currently about292,000 American businesses are involved in exporting,286,000 of which are small. The Obama administration launched a National Export Initiative in2010 focused on helping small businesses get involved in global trade. To help you navigate exporting Yancey suggests you get help from a SCORE mentor, “who has been there and understands the cultures and nuances” you’ll encounter.

Dario Gomez, the associate administrator of International Trade at the Small Business Administration, also thinks exporting is a great way for small businesses to become more economically diverse and robust. "Exporting,” he says, “increases a company’s chances of staying in business.”

Gomez points out that the trend “towards a global economy has helped build a strong middle class” in many nations around the world, making exporting an even greater economic opportunity for small businesses. And, he emphasizes, exporting is not just for product, food or retail businesses. “Service businesses, too, are in demand globally,” Gomez says particularly citing a need for “engineers in the developing nations, environmental companies (sanitary conditions are a problem needing solutions), and architectural businesses." "China,” he continues, “will be building over100 airports in the next15 years, leading to lots of opportunities” for American companies to offer their services.

Citing the European debt crisis, Gomez suggests American entrepreneurs look beyond Europe which is projected to grow only0.7 percent next year, compared to a global growth rate of3.9 percent. He cites Latin American and the Caribbean as strong markets, with an expected4.5 percent rate of growth, and calls out Peru as being particularly robust, with a projected6 percent growth rate. The hottest opportunities for exporters are in Asia, where together the nations of China, India, Thailand, Indonesia, Vietnam and the Philippines are expected to grow by7.5 percent in2013.

Gomez says in this global economy “there’s a buyer out there for what you’re selling” citing an Illinois entrepreneur who’s successfully exporting waffle cones to Canada, and a demand in Taiwan for elk antlers from the mountain states.

Of course exporting takes money, but the money pool here is a little fuller for small businesses. Gomez says you can get help from the SBA, the U.S. Department of Commerce, and the Export-Import (Ex-Im) Bank. There are in fact loan guarantee programs for small businesses at the Ex-Im Bank and the SBA (Export Express).

Yancey advises entrepreneurs to also think about “import displacement,” where American small businesses consider manufacturing here in the U.S. products that are currently being imported.

If the last several years of a terrible economy have you down, Yancey believes the proverbial bright light is shining at the end of the tunnel. “Entrepreneurs are resilient,” he says, “and we’ll figure it out. Small businesses have been successful during our worst moments. So much good has been developed in the heat of the breach.”