International economic and financial relations are primarily driven by private actors. Alongside globalization, production constraints and international value chains have become more and more complex. The efforts of private actors are supported by public actors in order to promote and foreign trade, inward and outward investments, and co-operations, creating an active form of Private-Public Partnership. Attractiveness has become a key factor of Business Development and a diplomatic challenge including economic intelligence, best practices, ethics, governance and sustainable development.
International economy is driven by value chains and regional dynamics. Each region, as a more or less homogeneous area, tends to develop its competitive edge, through industries, services or commodities and the use of highly specialized global markets. Relevant strategies are based upon a comprehensive understanding of regional dynamics in order to allocate activities and resources. Regions are interdependent and establish preferential co-operations with their neighborhood: interregional cooperation is a key issue of economic diplomacy in a world which tends to become tripolar between the United States, China and the EU.
In an instable and unpredictable context, the assessment of country risks, both political and economic, is a key tool of international business development. It is a prerequisite of risk management which allows actors to take the necessary steps to ensure reasonable risk exposure in the long term. The methodology of country risk is a prospective and dynamic approach encompassing the specificity of country risk among other risks involved in international business, a basic understanding of Sovereign Risk Analysis as undertaken by rating agencies, and the relevance of « Political Risk Insurance” and cofinancing by national and multilateral agencies to mitigate risks.
International Business is also driven by national and international Laws and Regulations. As legal risks are critical in business, especially with an aggressive use of domestic Law against foreign interests and the development of economic sanctions, the understanding and structuration of general legal risks is a key factor of risk management. Main legal systems are in competition and aim at increasing their international influence, as is the case in Africa with OHADA (Organisation pour l’harmonisation en Afrique du droit des affaires). Above national systems, international institutions have developed common principles and practices in order to facilitate trade and investments, worldwide or on a regional basis. A focus on the EU will illustrate the process of legal integration and the main differences with other major players.
International Business represents a generally much higher level of risks than domestic business. Markets, banks, insurance companies, public national and international organizations provide risk mitigation solutions, ranging from short-term to long-term risks, to limit the exposure of exporters and investors. Using such tools in a relevant and cost-effective is a key component of international risk management. They contribute to an efficient structuration of the value chains and protect operators from major political and commercial risks from simple trade finance to much more sophisticated products such as export finance and project finance. They also aim at developing good practices such as the fight against corruption, poverty reduction and sustainable development.
Science and technology represent major challenges in all economic sectors and probably the most relevant approach to manage the future and welfare of populations and together with the protection of the planet. Various sectors will be considered from nanotechnologies to space, from artificial intelligence to transportation. A global world is also a digitalized world, both for production, exchange and finance. They also generate creativity, new business models, lifestyles and cultures. Such evolutions may present ethical risks which must be assessed and, as the case may be, regulated.
Understanding cultures is not just economy and management, it is also a personal development which makes international business more exciting and challenging. It is a link with sociology and psychology. In large international companies, mixing cultures and create value through cultural diversity has become a major challenge. International negotiation requires a good understanding of business cultures and practices. It is not about victories or defeats, it is about building long term viable solutions and co-operations with customers and partners. Crises are unavoidable : crosscultural management and negotiation contribute to the resolution process for the benefit of all parties involved.
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