India to produce 2219 new MNCs between 2010-24
The competitive landscape is set to be transformed over the next decade as Indian and Chinese multinationals lead the way in seeking new markets abroad. They are joined by an array of companies from Singapore, Russia, Malaysia and South Korea, says a new report entitled Emerging multinationals: The rise of new multinational companies from emerging economies from PricewaterhouseCoopers (PwC).
India is expected to produce the most new multinational companies, overtaking China as the emerging world’s largest source of new multinationals. Over 2200 Indian companies are projected to open operations outside the country over the next fifteen years. The South American countries in the sample (Argentina, Brazil, Chile and Mexico) are expected to be a relatively smaller source of new multinational companies while the export-orientated South East Asian countries (Malaysia and Singapore), along with oil-rich Russia and the newly industrialised South Korea, are expected to continue to produce large amounts of new multinationals. The research also provides an insight into the evolution of new multinationals from emerging economies.
"It is encouraging to know that India will replace China as the largest source of new multinationals in the emerging world from 2018 onwards. The key drivers for this are the relative increase in both investment intensity and openness that the Indian economy offers," said Jairaj Purandare, India Leader for Markets and Industries, PricewaterhouseCoopers.
According to this report, some of these new multinationals will become international powerhouses and will require services all over the world, for example, in order to support their IT and telecoms networks.
PwC used econometric techniques to project the number of new multinationals that will arise from a representative sample of 15 emerging economies over the next 15 years. The countries analysed were: Argentina, Brazil, Chile, China, Hungary, India, Malaysia, Mexico, Poland, Romania, Russia, Singapore, South Korea, Ukraine and Vietnam.
More new multinationals are moving straight into developed economies as opposed to setting up their first foreign operation in a neighbouring emerging economy. These new multinationals are increasingly likely to be in business services or higher value-add manufacturing sectors as opposed to the more basic natural resource extraction sectors," said Yael Selfin, head of Macro Consulting, PwC.
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