India not a favourite investment for Britain’s small businesses

NEW DELHI - Small businesses and entrepreneurs in Britain are hesitant about expanding to emerging markets like India and would rather look at investing in more developed markets like the US, according to a report compiled by global consulting firm Deloitte.

“Less than one percent, out of the 350 companies surveyed, cite India and Brazil as prospects for significant growth, in addition to just 1.5 percent that consider China a prospect for growth,” said the report from Deloitte titled Entrepreneurship UK: 2010/11.

“This despite the fact that BRIC (Brazil, Russia, India, China) markets currently represent 70 percent of global growth and are expected to maintain these growth levels for several years,” the report said.

Most countries are still trying to kickstart their economies post the global economic slowdown. Businesses in such countries, however, have begun to avoid risks, which is clear from the aversion of small firms and entrepreneurs of markets like India, China.

Over 60 percent of the companies surveyed expected to generate growth through domestic sales this year.

“While businesses may be losing out on opportunities, they could also be seen as controlling their risk at a time when undue risk-taking is generally not welcome. So, while revenues could grow as a result of entering these markets, there is also the possibility that a foray could be expensive and fruitless,” said the report.

Some of the bigger companies in the survey, however, said they would still like to enter emerging markets, when compared to those whose revenues were below five million pounds.

Also of significance is that smaller business’ promoters are now looking to make a quick exit as soon as their venture achieves certain “target value” amid options of funding drying from banks or venture capital firms.