Here is a very interesting and enlightening article in Harvard Business Review (The Magazine) about the changing environment for multinationals and ways to survive.
For the past 30 years the largest North American and European multinational firms have been sailing an exceptionally favorable economic landscape, reaching global corporate after tax operating profits growing 30% faster than global GDP. Their success is primarily attributed to their ability to exploit favorable cost drivers. But, these cost drivers “have largely run their course” and”rather than continuing to reap gains from labor arbitrage, companies will fight to hire skilled people for management and technical positions. New jobs require disproportionately greater skills, especially in science, engineering, and math”.
The Western multinationals face aggressive competition as well from emerging market firms and technology companies, which contrary to them , have long focused on building their market share rather than targeting short term profits.
The focus then, should be placed now f idea-intensive businesses, intellectual capital should be seen as a prime asset given the largely growing idea-intensive businesses. It is noteworthy that “half the world’s most valuable brands are in idea-intensive sectors—and their value is increasing”. Hence, “finding and nurturing ambitious, hard-driving, and international-minded managers and technical staff are major challenges for multinationals and will become ever more crucial”.