RSM International Conference, Singapore 2007

RSM Global Business ForecastMiddle Enterprises in the World EconomyDavid BartlettEconomic Adviser, RSM International

RSM International Conference, Singapore 2007

Overview of ReportOverview of ReportOBJECTIVESOBJECTIVES

• Examine global opportunities and challenges facing middle enterprises• Deliver actionable recommendations to mid- sized companies navigating global shifts• Showcase the knowledge and expertise of RSM International professionals

METHODOLOGYMETHODOLOGY• Detailed questionnaire addressing key cross- border issues affecting middle enterprises• Responses by 130 RSM International professionals• Telephonic interviews of 40 survey participants

DIFFERENTIATIONDIFFERENTIATION• Focuses on globally active middle enterprises• Blends survey results and qualitative analyses• Highlights contributions of individual RSM International firms

RSM International Conference, Singapore 2007

International GrowthInternational Growth

• Most middle enterprises focus on their domestic markets despite rising international growth prospects

• Asia, Europe, and North America offer the best growth prospects for mid-sized companies

• Middle enterprises rely on traditional exporting, but increasingly use non-export strategies

RSM International Conference, Singapore 2007

Global Competitive ThreatsGlobal Competitive Threats

• Import competition represents the foremost threat to middle enterprises

• Emerging market-based companies are generating mounting competitive pressures worldwide

• Mid-sized companies are prioritizing investments in human capital to meet global competitive threats

RSM International Conference, Singapore 2007

International Business RisksInternational Business Risks

• Economic downturns and financial crises rank as the primary risks facing middle enterprises

• Mid-sized companies exhibit a strong awareness of global business risks, but lack coherent risk management strategies

• Middle enterprises are underutilizing a growing repertoire of international risk management tools

RSM International Conference, Singapore 2007

Industry and Sector TrendsIndustry and Sector Trends

• Services offer the greatest growth potential for globally active middle enterprises

• Mid-sized manufacturers enjoy important opportunities in bioscience niches and other market segments with low barriers to entry

• Expansion of the global market for renewable energy opens high-growth, high-margin niches to technologically adept middle enterprises

RSM International Conference, Singapore 2007

International OperationsInternational Operations

• Middle enterprises are implementing lean manufacturing and related techniques to counter low-cost challengers from China

• Mid-sized companies are leveraging advances in international shipping and logistics to manage global supply chains

• Middle enterprises are utilizing direct sales and Internet-enabled distribution to reduce their dependence on independent distributors

RSM International Conference, Singapore 2007

Global FinanceGlobal Finance

• For middle enterprises, the rise of emerging economies represents the most significant development in global finance

• The exchange rate impact of the U.S. current account deficit is not considered a critical issue in the middle enterprise sector

• While commercial banks remain the primary funding source for middle enterprises, private equity has become a major financial vehicle

RSM International Conference, Singapore 2007

Emerging MarketsEmerging Markets

• East Asia, Southwest Asia, and Central and Southeastern Europe figure importantly in the strategies of globally active middle enterprises

• The weak business environments of Latin America and the Former Soviet Union reduce the attractiveness of those emerging markets

• Building international brand equity constitutes a key challenge to emerging market-based companies pursuing global growth opportunities

RSM International Conference, Singapore 2007

Human Resource ManagementHuman Resource Management

• The global war for talent has become a central axis of competition in the middle enterprise sector

• Mid-sized companies in professional/financial services, Information Technology, and manufacturing report serious labor shortages

• Middle enterprises are poorly positioned to compete with large companies in the bidding for skilled employees, heightening the imperative of effective human resource management

RSM International Conference, Singapore 2007

Utilizing RSM Global Business ForecastUtilizing RSM Global Business Forecast

• Business Development

• Client Services

• Marketing

RSM International Conference, Singapore 2007

Questions?Questions?

David BartlettEconomic Adviser, RSM Internationaldavid.bartlett@rsmi.com