Why businesses need to navigate the dynamics of Borderless Business to succeed

HSBC Research’s Global Economist James Pomeroy explores what Borderless Business means in an increasingly interconnected world

In an era marked by technological advancements, the business landscape has undergone a profound transformation. The traditional notion of operating within defined borders is giving way to a new paradigm – that of Borderless Business.

Globalisation has set the stage for Borderless Business practices by creating an environment of increased international collaboration and interdependence that revolves around going beyond geographical constraints. As businesses look to the future, understanding and navigating the dynamics of Borderless Business are no longer an option, but imperative. ?

HSBC’s Digital Horizons report, created with the Future Laboratory, imagines what business success will look like by 2030. In particular, the report explores what a Borderless Business world means for key decision makers as technology and international networks expand.

In this article, James Pomeroy, HSBC Research’s Global Economist, looks at the future of business from a global perspective and how emerging technology is accelerating Borderless Business practices.

How globalisation made way for Borderless Business

Businesses believe that expansion means internationalisation and according to HSBC’s Digital Horizons survey, 83% of business decision makers see international networks as important for their growth.

As the global economy changes shape, so do the drivers behind global demand. Much more global demand is coming from fast-growing economies such as Southeast Asia and India, where economies are ever-growing. At the same time, parts of the world, such as Europe, have seen slower growth for an extended period.

The evolution of the supply chain

Globalisation has transformed supply chains into intricately woven networks that span continents and connect suppliers, manufacturers, distributors and retailers. As the world becomes more digitised, creating slicker supply chains globally will be key.

The Covid-19 pandemic caused shocks across global supply chains as the demand for goods rose and supply could not keep up. This meant there were huge blockages in supply chains and congestion in key arteries of the global economy. As a result, companies expressed a desire to diversify their supply changes and be reliant on a wider range of economies and businesses from which to get products.

In the next few years, there will be a continual evolution in global supply chains especially as more economies in the world become key parts of a Borderless Business world.

Technological advancements, including blockchain, AI and data analytics, are reshaping the landscape of supply chains and it’s those that embrace these technologies that will be the major winners.

The power of new technology

Borderless Business practices and technological advancements are intrinsically linked and both work together to help companies overcome traditional barriers, enhancing communication, and providing tools for efficient global operations.

The continuous evolution of technology creates many opportunities for businesses, and in turn, the advancements are expected to open up new markets and entirely new industries.

The internet is a key driver in digital connections and the economies where growth is at its fastest is a result of the number of people connected online. In parts of the world such as Asia, Sub-Saharan Africa and Latin America, the benefits of being digitally connected can create millions of jobs, grow new ecosystems and whole new sectors of the economy.

However, technological breakthroughs are not without risks for businesses. A key challenge will be the emergence of new security threats linked to cybercrime. Another is the need to adapt quickly to emerging technology or face being left behind by the competition.

Embracing a world of Borderless Business

As the global landscape shifts, Borderless Business signifies a renewed commitment to cross-border collaboration and interconnected markets. It acknowledges the importance of dismantling barriers to trade and revitalising the global economy through renewed partnerships.

Businesses that embrace this trend will see greater profits. More global growth is coming from fast-growing emerging economies, meaning that the businesses that can tilt their business in that direction are likely to outperform.

In this new era, connectivity and strong relationships are more important than ever. Businesses will be going into new markets for the first time and on many levels, it is important for them to understand the local customs they will encounter along the way. This changing shape of the global economy is important because it is helping to drive global trade patterns.

HSBC’s Digital Horizons research found that many businesses are recognising the power of Borderless Business especially as diversifying supply chains, exploring new markets and using advanced technology are becoming key strategies for success.

The role of banks in an era of Borderless Business

In a Borderless Business environment, financial institutions will play a crucial role as partners and advisors. As nations seek to rebuild and re-establish international connections, banks emerge as vital for businesses to help them on that journey. HSBC is helping customers in different ways and in 2023 we launched TradePay[1], a digital solution that enables companies to seamlessly drawdown trade loans and pay suppliers, improving their working capital while building stronger relationships with their trading partners.

As we look to a world where Borderless Business is becoming common practice, my recommendation for businesses is to think beyond your borders. Look at where the opportunities are in the world in the years to come and the expertise and the help to get there is available.

[1] HSBC TradePay available in selected sites and subject to prior adjudication and approval.