Globalization tends to attract negative emotions especially from people who have a tendency to promote conspiracy theories. The mere mention of globalization evokes images of an evil corporation making inroads into an emerging economy to kill off the local businesses in order to gain a control of their market. Many people believe that globalization is a tool used by the world’s rich to perpetrate the cycle of income inequality.
However, when examined in an objective context, globalization could be a positive force. And globalization when merged with entrepreneurship could birth innovations for a more inclusive economic growth. Entrepreneurs are now starting to think globally in order to improve the odds of surviving locally.
Entrepreneurs have to source raw materials, services, and skills from other countries in order to get the best value for money. Some other entrepreneurs also find ways to sell their products and services to other countries where they could getter better prices because of the dynamics of demand and supply. The interconnectedness of today’s business in turn triggers a domino effect of wealth creation across national borders.
However, a number of hurdles must be crossed for globalization to reach its true potential as a powerful tool for wealth creation in the hands of entrepreneurs.
Some countries/companies are yet to embrace digital communications
Entrepreneurs in some countries have to contend with the fact that globalization is moving at snail speed because digital communications is yet to take a firm root in some places. Some companies still have corporate cultures built around paper communications with postal mails. Trying to build a business relationship with such companies could be somewhat stressful because postal mail between countries could take months to arrive. In some places, faxing documents is still in vogue and entrepreneurs in the west might have to relearn how fax works in order to send and receive documents.
Foreign exchange management is still somewhat expensive
If you are trying to do business with any form of international exposure, you’ll need to find a way to get your money in/out of your home/destination country. Many entrepreneurs doing business internationally still have to live with the exploitative fees that some traditional financial institutions charge to send or receive money from foreign countries. In fact, you can expect to pay between 10% to 20% in fees when sending or receiving money from some countries.
Apart from the exorbitant costs of foreign exchange transactions, some forex transactions often take a number of days to process; thereby adding to the opportunity cost of having cash at hand. Thankfully, services such as moneytransfercomparison.com can provide you with valuable information for choosing reliable international money transfer companies. In addition, entrepreneurs with foreign exposure can find ways to handle forex headwinds by employing best practices in foreign exchange management.
Shipping across international borders is still problematic
Entrepreneurs who are involved in the production/sales of physical goods might find it somewhat cumbersome to do business internationally because the shipping business is simply complicated. The cost of shipping goods to the some countries especially in parts of Asia, Eastern Europe and Africa is simply expensive. The worst part is that you can’t always pass on the shipping costs to the buyer because you’ll end up losing your competitive advantage on the price point.
