Should Hong Kong companies look further afield for growth opportunities?

A decade or so after the term 'BRIC' term was coined to acknowledge the potential of leading emerging economies, there still appears to be a reluctance to see the opportunities there. Even as mature industrialised markets as Western Europe and the United States essentially stagnate, companies are not exactly rushing into new territories.

Certainly, China is attracting a lot of trade on account of a fast-growing middle class and an associated ballooning consumer spending power. Recent research by Regus showed that the proportion of Hong Kong's businesspeople that identified China as ripe for expansion was the highest in the world, at 83%, and indeed China was high on the list in the majority of countries surveyed.

However, while the likes of India and South America are growing in popularity as export destinations globally, they continue to lag behind Europe and North America, and Hong Kong bucked even this trend, with only 18% of local respondents viewing Europe as a region they would look to expand into (against a global average of 41%).

In principle, at least, companies should have a powerful incentive to expanding overseas: the same research, which canvassed the opinions of more than 20,000 senior business managers in over 90 countries globally, revealed that 50% of global firms that export say they've increased profits over the last 12 months – compared with just 38% of companies that only trade domestically.

So why are local firms reluctant to embrace opportunities in other markets? What's putting them off?

In terms of the difficulties they believed they would face in expanding overseas, local businesses said that finding and arranging suitable physical premises (67%), recruiting senior managers (40%) and operational staff (39%) posed the biggest challenges. It is fair to say that the first of these can be dealt with through using one of the flexible workspace providers now available across the world.

With the help of other service providers, recruitment (even in an unfamiliar market) also becomes less of a hurdle. Arguably, risk management – given that it covers such matters as political stability and natural disasters – might be the most difficult of the challenges, although only 35% of Hong Kong businesses cited this as a challenge.

Yet even this does not appear to be as serious as it once was. It's also worth remembering that, with people regularly marching on the streets of European capitals and American politics as polarised as ever, it is not as if traditional export markets are immune to these risks either.

Under those circumstances, does persevering in markets with sluggish growth really seem that attractive? When the issue is considered holistically, the case for looking to less traditional overseas markets for growth appears more compelling than many companies in Hong Kong and around the world seem to realise.