LONDON, Sept 28 (Reuters) - Developed economies still offer better business growth prospects than most emerging markets, not least because of their more attractive financing environments, according to a study released on Friday.
Grant Thornton International (GTI), a global accounting and advisory firm, ranked the Nordic region as the most dynamic in the world, scoring 66.1 out 100, followed by North America, the Group of Seven rich industrial nations and then Asia-Pacific.
Singapore topped the individual country rankings followed by Finland, Sweden, Israel and Austria. The United States came 10th and China 20th.
“In many ways the results are counterintuitive. You always assume that the countries that have the fastest economic growth like China and India would also have the best long-term business environments for companies to grow. But that’s clearly not the case,” GTI Chief Executive Ed Nusbaum told Reuters.
GTI surveyed more than 400 executives on five themes that it identified as central to the dynamism of an economy: growth, the business operating environment, science and technology, labour and human capital and the financing system.
Developing countries lagged in the last area, which specified sound regulation as the most important aspect of an economy’s financing environment followed by credit availability, the corporate tax rate and growth in direct inward investment.
Even if their labour costs are lower and their legal processes are simpler, emerging markets could lose out in the years ahead if they continue to be second best in providing financing, Nusbaum said.
The survey showed that firms weighing up long-term investments were looking at an array of factors, including the ability to attract talent, time to market and how best to control the overall production process.
“We’re seeing a trend with our clients for companies to distribute their manufacturing processes around the world as opposed to any single location,” he said.
Nusbaum described the business climate in the United States as more positive than it had been in a long time. “The success of companies like Apple is contagious,” he said.
But other countries, with Israel as a standout, were doing even better in promoting entrepreneurship.
Western Europe trailed the Asia-Pacific region in GTI’s economic dynamism ranking but scored well considering the euro zone’s debt and banking crisis, Nusbaum said.
“It’s more optimistic than I would have expected and speaks well to the ability of Europe to respond to the crisis and emerge in a healthy way,” he said. (Reporting by Alan Wheatley; Editing by Hugh Lawson)