Business and Society in Critical Countries
Faculty Coordinator: Liesl Riddle
email: lriddle@gwu.edu

Resources

Markets in developing countries are becoming increasingly important to U.S. business. Developing countries account for the majority of the world’s population, land, and natural resources. Per-capita output is growing at a phenomenal pace in the developing world: Britain took 60 years to double its per capita output during its industrial revolution, yet China doubled its per capita output rate in only 10 years. Analysts predict that GDP growth in developing countries as a whole will continue to outperform high income countries in the foreseeable future.

U.S. companies have become more involved in developing-country economies in the past decades, taking advantage of decreases in trade and investment barriers and the growth opportunities inherent in these markets. U.S. firms continue to increase their portfolio and direct investments in developing country markets. Facing increasingly saturated markets at home, many U.S. companies of all sizes and types are seeking to derive future profit growth from increased sales to buyers in developing country markets.

At the same time, firms based in developing countries are entering foreign markets at a rapid pace and are becoming formidable competitors for U.S. business in the global arena. The share of developing countries in global outward investment stock rose from five percent in 1990 to almost 12 percent in 2000, according to the UN Commission on Trade and Development (UNCTAD). Today, many of these developing-country multinational enterprises are found among UNCTAD's list of Top 100 Transnational Companies and among the Fortune Global 500.

The developing countries of Brazil, Russia, India, China (the so-called BRICs), the Commonwealth of Independent States, and the countries of the Middle East and North Africa account for some 10 percent of world GDP. These are some examples of “critical countries,” or developing national markets particularly vital to the economic and political interests of the United States. As these economies strengthen, they are developing into lucrative opportunity markets for U.S. companies but their firms present as increasingly formidable competitors in the global marketplace, and their governments and societies often chafe at U.S. economic and foreign policy—further hampering the efforts of U.S. firms to constructively and profitably engage in these critical countries. U.S. businesses will remain competitive in the future global marketplace only if U.S. managers are poised to contend specifically with these critical countries, seizing opportunities and launching effective defensive strategies.

U.S. university curricula in business and area studies, academic and policy research must be developed to adequately equip U.S. managers with the diverse knowledge and skills needed to succeed in critical country environments. To date, most business curricula and research focuses on theory and applications generated in developed-country contexts; thus much of existing business training assumes the presence of strong formal institutions.

The integrated program of education, research and outreach proposed by this CIBER initiative investigates, and teaches current and future managers how to successfully navigate weak institutional environments in critical countries, leveraging a range of Washington D.C. resources and collaborators including foreign embassies and includes the following issues: