Romania ranks 32nd out of 60 countries most open to globalization, behind Hungary and Bulgaria, but ahead of China, Japan and the Ukraine, shows Ernst & Young’s Globalization Index for 2011. Romania had an average score of 4.5, and obtained better scores for openness to globalization for labor and trade - with 4.7 and 4.6 respectively, but lower scores for technology and culture - with 2.9 and 3.5.

Despite the globalization process starting to pick up again after the decline reported in the last two years, economic and social tensions threaten the ability of states and governments to resist protectionist pressures, shows the report. The analysts at Ernst & Young believe emerging markets need globalization to continue to attract foreign investment.

Ernst & Young presented four challenges for companies in the process of globalization. First highlighting that “succeeding in rapid-growth markets is becoming more difficult because costs are rising, competition is becoming more intense and growth, while still rapid compared with that of the developed world, is slowing.” Next, companies are facing an operational complexity that is increasing, as they diversify into markets with vastly different prospects and business environments.

The third challenge presented by Ernst & Young considers a policy environment that has become more important and less predictable. “An uncertain and dynamic policy environment — especially rising protectionism — is causing considerable concern. Business leaders are also worried about a rise in tax risk as governments seek to increase revenues and ramp up enforcement mechanisms,” reads the report.

Good people are also hard to find, and companies around the world find it increasingly difficult to match suitable candidates with available positions.

Ernst & Young’s Globalization Index calculated for 2011 was made ​​following a survey of 922 top executives involved in international business.

Irina Popescu, irina.popescu@romania-insider.com

(photo source: Sxc.hu)