Our Mission

We must establish a platform for open dialogue between countries and companies with the objective to ensure sustainable economic growth and better collaboration between key decision-makers on both sides of this equation.

A bit of background

Historically, decisions related to corporate international expansion have always been about investment in physical assets such as office buildings, roads, airports, factories, dams, labs and science parks.

Adding up to trillions of dollars, these investments still represent sizeable decade-long commitments from companies to the recipient region and provide a major boost in economic growth and societal progress to the host country.

But the disruptive power of technology is fundamentally changing how companies execute their international expansion strategies and as a consequence how governments respond to the challenges posed by this seismic change.

Digital Transformation

The fierce pace of this “Digital Transformation” is redefining entire industries as it breaks physical barriers to work and trade. But at the same time, because of its ubiquitous presence, it also poses policy challenges never before faced by governments in areas from investment promotion to taxation, from privacy to national security.

Just read developments on FBI vs Apple regarding encryption or Google vs EU on taxation to get a perspective on how important technology companies are and how critical their relationship with governments has become.

Some of the most valuable companies today include Apple, Google (Alphabet) and Microsoft, whereas just a few years ago top names were the likes of Exxon Mobil, General Electric, Gazprom and PetroChina.

Intangible now preceeds the tangible

See the difference? Information over commodities. Human resources over natural resources. Intangible over tangible. Digital over bricks & mortar.

The truth is: technology is ethereal and recognises no physical borders. It is global in its essence. It belongs to everyone and to no-one at the same time. It can be available in any country and yet under no single national legislation. It is important governments understand this because it will be the defining policy challenge in the next decades.

Most assets today are indeed intangible. Intellectual property, patents, brands, algorithms, platforms, cloud computing, etc. are worth much more than the physical offices, laboratories, factories and R&D centres they were developed in.

Although patents are still filed under national jurisdictions, it is increasingly difficult to ascertain where real value is created. For national governments it is critical to reckon the intrinsic value of “intangible assets” and their impact in value creation.

Technologies companies can, and often do, move assets – tangible and intangible – across its international subsidiaries depending on where they find better conditions to grow.

Taxation is just one of those conditions, but by no means the only one. Talent, infrastructure, transportation links, consumer markets, lifestyle, brainpower, capital and efficient institutions are all taken into account as they do impact the bottom line. This is even more critical in knowledge-intensive industries such as ICT, Finance and BPO where competitiveness relies much more on brainpower than horsepower.

More broadly, some of the most talked-about concepts around innovation such as “tech hubs” and “start-up ecosystems” rely on the free movement of ideas and intrinsically don’t belong to any particular entity - be it a company or government - but rather to the communities they created and helped create.

While innovation is normally associated with start-ups, thanks to “Open Innovation” some large corporations can now outsource innovation from smaller, nimbler companies anywhere in the world that offer specialised know-how, faster R&D cycles and lower risk aversion, thus completely changing their value chain and asset allocation. Where was value created (and under which jurisdiction does it fall) if a California-based company decides to outsource its new product’s R&D to a Helsinki-based company and development to a Bangalore-based one?

While national governments try their best to regulate and keep pace with this free movement of value-creating intangible assets, there is just so much they can do. Forcing the hand with over-regulation will only lead to companies increasingly trying to outsmart policy makers. This is in nobody’s interest.

What are the opportunities?

As more corporations across industries gravitate toward innovation hubs, the opportunities with cultivating start-up communities and embracing digital disruption cannot be ignored. Governments must work hard to attract and grow innovation ecosystems which can in turn drive further investment.

Lastly, the role of governments in the digital world shouldn’t be limited to merely regulating and attracting businesses. Initiatives such as “Digital 5” where UK, Estonia, South Korea, Israel and New Zealand came together to promote higher level of services and information to their population over the internet are great examples. Today, a number of prominent cities around the world already employ their own Chief Information Officer who is in charge of big data analytics, smart city projects and innovation hubs.

In summary

So the key questions are: How does a country regulate, tax, attract investments and negotiate incentives and conditions in a digital world? How can companies establish a more collaborative approach with governments, thus avoiding years-long debates over what they see as freedom of movement of their value-creating assets?

There must be a better way. We must establish a platform for open dialogue between countries and companies with the objective to ensure sustainable economic growth and better collaboration between key decision-makers on both sides of this equation.

This is the mission of the Global Expansion Summit.

- Fernando Faria, Founder & CEO, Global Expansion Summit

We invite you to join us: Register to attend, find out about partnerships, or simply sign up to our newsletter to find out more.