Throughout the downturn, we have witnessed global trade, albeit itself impacted by economic circumstances, acting as a driving force behind global economic recovery. Global trade is important. Trading internationally gives a business more opportunities for growth and development than remaining a solely domestic company would offer.

Further testament to the impact of global trade is the enthusiasm businesses worldwide hold for trading internationally and the positive benefits it can bring; HSBC’s latest Trade Confidence Index found that of the seventeen markets surveyed globally, all were confident about trade prospects in the next six months. A high proportion of businesses across many countries and continents, including India (55 percent), South East Asia (52 percent), South America (36 percent) and Europe (29 percent) also said they expected their need for trade finance to increase over the next six months.

But while a business might understand the need to internationalise, and its resulting benefits, understanding where to look for overseas opportunities and how to turn them into reality is not always as simple. That’s why HSBC Commercial Banking Europe commissioned Delta Economics to write ‘Mapping the World’s Trade Connections’, the first report of its kind. It incorporates in-depth data on trade, the views of fifty businesses already successfully trading internationally and expert opinion from HSBC Heads of Trade to establish a comprehensive current picture of global trade and help define where opportunities are to be found over the next five to 10 years.

The report establishes which countries hold the greatest future growth potential for European businesses, but also to determine specific sectors and industries that are likely to see significant growth, and where these opportunities can be found on the global map.

A key insight for European businesses considering future growth hotspots was that new ‘rising stars’ are appearing on the world map. While much has been made of the phenomenal growth of Brazil, or the economic power of China, ‘Mapping the World’s Trade Connections’ found that the brightest prospects for global trade also included lesser-known trading prospects, including Africa- most notably South Africa- Vietnam and Eastern Europe.

In Africa, for example, countries with young and entrepreneurial populations like Ghana and Ethiopia have particularly strong commitments to change, and scope therefore to experience rapid growth. In Ethiopia, Chinese investment in the agricultural sector is driving modernisation, while infrastructure development remains a high priority. South Africa, which survived the downturn well and has received a boost from the recent World Cup, relies on revenues from its mining sector, and with demand growing for its commodities it too is well placed for future success. For European businesses, these regions and countries offer opportunities to tap into the changes taking place, for example by supporting big infrastructure development and demand for commodities.

So what of Europe then, in this new order of global trade? Much attention is given to the role of emerging markets, but the report found that Europe retains a strong role in global trade moving forwards. Essential for European businesses, however, will be to understand that this role is changing significantly.

In fact, Europe’s future role in global trade is likely to see it defined less as a consumer, and more of an innovator, with the continent’s renowned leadership in cutting-edge research, its strength in high valuing manufacturing and design and its access to ideals, innovations and networks leaving it well placed to trade on skills, not products, in the future.

The view of many of the experts interviewed for the report was that while the emerging markets may boast greater economic growth, a thinking business needs to capitalise on the strengths of both emerging and developed markets, and in the case of Europe that means harnessing experience, knowledge and skills. Certainly, with trade now focused on establishing a global supply chain, it is Europe’s expertise and leadership in research and development that means it will retain an important place in this supply chain. Europe’s strength as a provider of this specialist knowledge means it should be seen as an attractive option for emerging markets looking to establish strategic partnerships to further drive their own growth.

But for the European business keen to seek out and form such partnerships overseas, and to begin trading internationally, what are the crucial steps that must be taken? Having gathered such a wide range of expert opinion, and spoken to such a wide variety of businesses about, not just the successes they have had trading internationally, but also the downfalls they have had to overcome, ‘Mapping the World’s Trade Connections’ pulled together a list of five key steps that all businesses looking to trade internationally must consider. These are:

1. Taking the time to complete thorough research
Success in a new country is undoubtedly linked to the quality and scope of research conducted at the outset. Gaining a true understanding of a country, from its culture, customs and government policies to its economic and trading conditions, as well as the level of competition a business can expect to face, will help determine the overall suitability of a country for expansion plans.

2. Consider if your business is ready to trade internationally
Trading internationally can bring great benefit to a business, but expanding at the right time is crucial. How would internationalising fit into your overall business plan? Do you have the resource available, sufficient production capacity to meet new demand and the necessary time available for management to devote themselves to researching and establishing an international operation?

3. Mitigate the risks
Exploring, and therefore mitigating, possible risks at an early stage is key to international success. Risks can range from the reputation of the trading partner you have chosen, to ‘bigger picture’ issues such as the political stability of the country you are hoping to expand into. More logistical factors, such as managing your business’ cash flow and how to transport goods overseas, also need to be considered.

4. Consider your finance
Waiting for payment for goods or services can put a huge strain on a business’ finances. What are the standard payment terms in the country you are hoping to operate in, and what impact will these have on your cash flow? Careful planning to ensure working capital facilities are available at every stage of the trade cycle is crucial, and businesses should engage with their bankers as early on in their international planning as possible.

5. Seek expert advice
There are a myriad of organisations which can help with providing business advice looking to trade internationally. Utilise banks, government organisations, Chambers of Commerce and Customs & Excise and Trade Associations to help get the right advice for your business.

And perhaps the most crucial piece of advice – ensure you understand global trade, the shifts that are taking place and how these can result in change, but ultimately a competitive advantage, for your business.