The forging of strategic partnerships between businesses is not a new phenomenon in the history of the market although going forward in this new globally interconnected intelligent economy it is becoming something of necessity. With emerging economies such as the BRIC's (Brazil, Russia, India, and China) claiming their stake in the manufacturing, resource production, and information technology fields with their massive forecast for population growth, American companies are seeing the need to seize on these opportunities. Tapping into new global markets is a logical move as it represents both a potential boom in revenue growth as well as presenting American companies with the economic idea known as “comparative advantage,” where a company can outsource tasks or purchase materials or labor from other companies more efficiently than they could do for themselves. With the emergence of the BRIC's this is now a two way street where American companies are no longer tapping into foreign markets but where foreign companies are now tapping into the American market for their own comparative advantage.
In the past few months Chinese companies have been buying up American companies as a means to increase revenue and production. Shuanghui International Holdings was just granted approval by the US government to purchase Smithfield, the largest pork producer in the world. Shuanghui is China's largest pork producer and on the deal CEO Zhijun Yang remarked, “This transaction will create a leading global animal protein enterprise.” With so many mouths to feed in China, this was an obvious move for Shuanghui to make in order to benefit from Smithfield's leading production process and global resources.
While some Americans nostalgic for the days of nationalist economies are uncomfortable with the idea of Chinese companies purchasing American companies, The Daily Ticker's Henry Blodget says this is something we must get used to for all of our economic benefit. “People better get used to Chinese companies buying up American companies,” Blodget continues, “They are the two biggest economies in the world but China is growing at a much faster rate therefor have a larger need for consumer goods.”
The education industry is on the same track. The Shanghai Normal University School of Business and Finance announced a partnership with New York City based language learning company, BRIC Language Systems. BRIC Language Systems can more efficiently provide Mandarin Chinese lessons to the Universities international MBA students than any other means at their disposal, so this opportunity was acted upon. BRIC Language Systems CEO and founder Ryan McMunn, “Our partnership with Shanghai Normal University School of Business and Finance is a coming together of two outstanding organizations, in two of the world's greatest cities, for the enhancement of business and language education.”
This is a global economy. There are opportunities to be seized for both American business and for the businesses of these emerging global economies. Forward thinking executives are already finding their way in this two way global market.