INTERNATIONAL CAREERS : A World of Opportunity : Where The Jobs Are : Top 10 Emerging Markets for U.S. Operations : International careers are far different than a decade ago. The growth is in small firms.
Michael Gradijan and Pactuco Inc. are the perfect parable for international business in the 1990s.
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Two years ago, the Lompoc, Calif.-based maker of custom packaging for electronics components decided that its future depended on opening a plant in Southeast Asia--land of cheap labor and home to the company’s clients and competition.
What happened next is filled with clues about American companies and workers overseas. Pactuco picked Gradijan to open the new plant. Gradijan picked Malaysia as Pactuco’s newest home.
Pactuco is small, just 250 workers. Gradijan is young, 26 now, 24 when tapped for his crucial new job. Malaysia is emerging but has an enviable economic growth rate of 5.1%. The plant is up and operating; Gradijan comes home next month.
What have we learned here?
That international careers for American expatriates are far different than they were a decade ago. Opportunities are no longer confined to conglomerates with a host of far-flung operations. The greatest growth in U.S. companies abroad is in small and mid-sized firms.
Plum jobs no longer go solely to senior executives; expatriates are getting younger and cheaper--and overseas assignments are getting shorter and shorter.
“When we’re talking about where there are opportunities, I don’t think we’re seeing a large explosion of American expatriates placed abroad among large companies,” says J. Michael Geringer, an international management consultant and business professor at Cal Poly San Luis Obispo.
“But I’ve certainly seen a lot of jobs open up in small and medium-sized enterprises. They seem to be benefiting an enormous amount from export opportunities the cheaper dollar provided.”
While it is difficult in a planet filled with possibility to point to parts of the globe and say that the jobs are here, but not there, experts in international trade do point to a list of the world’s “biggest emerging markets” as regions with the potential for the greatest job growth.
The Commerce Department has identified the following 10 countries as the most likely markets for U.S. operations--and therefore jobs--abroad: Argentina, Brazil, China, India, Indonesia, Korea, Mexico, Poland, South Africa and Turkey.
And in those regions, the industries that will afford the most opportunity are largely infrastructure-related--transportation, information technology, health, energy and finance.
For Americans wanting to work overseas, emerging economies tend to have greater demand for management-level jobs, Geringer says. “You essentially don’t have a middle class in these countries,” he says. “China has a billion people. How many are trained managers who understand the capitalist system?”
But emerging nation does not mean automatic opportunity , experts warn. Political and economic realities can change with lightning speed in developing countries.
Mexico is a perfect example.
The nation of 92 million people, with a gross domestic product of $740 billion, is indeed on the Commerce Department’s list of emerging markets. And the North American Free Trade Agreement, ratified in 1993, has already begun to fulfill at least some of its promise for U.S. companies doing business there.
But last December’s dramatic devaluation of the peso has changed the shape of opportunity in Mexico. In the foreseeable future, fewer Mexicans will be able to afford to purchase most U.S. consumer goods.
“With the devaluation of the peso, there will be less opportunity for consumer products companies,” contends Maciek Kolodziejczak, co-chair of the Southern California International Careers Consortium.
“But Mexico will continue to build the infrastructure: health care, transportation, information technology, cleaning up the environment,” he says. “That’s one of the areas where California, with companies like Fluor that deal with environmental technology, will still be exporting.”
Another wrinkle in the fabric of overseas employment is the growing likelihood that U.S. firms will not hire Americans for most jobs. “American Jobs Abroad,” the most exhaustive survey of its type, lists more than 800 U.S. companies employing more than 75,000 Americans around the world.
But the book warns that “most U.S. companies with overseas operations prefer to employ local nationals to fill all but a few senior managerial, professional and technical positions.”
Locals don’t need to be moved and are paid at the prevailing wages in their own country. They are far cheaper than their American counterparts--a key point in difficult economic times.
The book’s listing of corporations is filled with entries like these: Bristol-Meyers Squibb, 50,000 workers total, 95 Americans employed overseas; Goodyear Tire, 97,000 total, 217 overseas; Sherwin-Williams Co., 16,682 workers, 35 overseas.
Michael Gradijan’s company fits right in. Pactuco Inc. has 250 employees, only two of which are American expatriates. That number will shrink soon--or perhaps change is a better way to put it.
Gradijan, who also wrote Pactuco’s manual on how the company should support its overseas workers, first went to Malaysia in 1993 to scope out the country. What he found was a viable infrastructure, his major clients (America’s biggest disk drive companies) already in operation nearby and the ability to operate in a “free-trade zone” without the burden of taxes. “If Pactuco did not come to Southeast Asia, we’d lose $4 million to $5 million in business and some staff in the U.S.” Gradijan says.
But now that the new operation is up and running, staffed with trustworthy locals and one U.S. technician, Gradijan is heading home to a promotion and the chance to travel back to the region four times a year as Pactuco’s new director of Asia-Pacific markets.
Once Gradijan is back in Lompoc, Pactuco will send three American engineers and technicians each year to help operate the Malaysian plant for temporary stints of one to two months.
Part of this changing of the guard is atypical. Unlike Gradijan, an estimated 80% of all American workers sent abroad by U.S. companies are demoted on their return home--one of the downsides of overseas employment, according to Hal Gregerson, an associate professor of international management at Brigham Young University.
The switch to shorter-term, temporary workers, however, is typical. This is a trend that troubles Gregerson, who has written widely on global careers and leadership.
“To me, the fundamental driver for those short-term assignments in most U.S. companies is cost savings,” Gregerson says. “Because of that, [U.S. companies] are cheating themselves on their future levels of worldwide competitiveness.”
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Growth of Big Emerging Sectors 1993-2000
Expected growth in nearly all BESs, greater than non-BESs.
Annual average percent
Source: U.S. Commerce Dept.
Top 10 Emerging Markets for U.S. Operations
Mexico
Population: 92 million
Area in sq. kilometers: 1,972,550
GDP: $740 billion
Average GDP growth: 0.4%
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Brazil
Population: 162 million
Area in sq. kilometers: 8,511,965
GDP: $785 billion
Average GDP growth: 5%
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Argentina
Population: 34 million
Area in sq. kilometers: 2,766,890
GDP: $185 billion
Average GDP growth: 6%
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Poland
Population: 38 million
Area in sq. kilometers: 312,680
GDP: $180.4 billion
Average GDP growth: 4.1%
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Turkey
Population: 62 million
Area in sq. kilometers: 780,580
GDP: $312.4 billion
Average GDP growth: 7.3%
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South Korea
Population: 45 million
Area in sq. kilometers: 98,480
GDP: $424 billion
Average GDP growth: 6.3%
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South Africa
Population: 44 million
Area in sq. kilometers: 1,219,912
GDP: $171 billion
Average GDP growth: 3.8%
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China
Population: 1.2 billion
Area in sq. kilometers: 9,636,980
GDP: $809 billion
Average GDP growth: 8.3%
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Indonesia
Population: 200 million
Area in sq. kilometers: 1,919,449
GDP: $571 billion
Average GDP growth: 6.5%
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India
Population: 920 million
Area in sq. kilometers: 3,287,590
GDP: $1.7 trillion
Average GDP growth: 3.8%
Source: U.S. Commerce Dept.
