Jan Brady, the middle sister of that popular 1960’s early 1970’s TV show, The Brady Bunch once said, “Well, all day long at school I hear how great Marcia is at this or how wonderful Marcia did that! Marcia, Marcia, Marcia!” And I can’t help but think that all we had heard from everybody over the past several years was China, China, China! Companies gave so much effort to “China Sourcing Inititiaves” that they practically ignored the rest of the world.
The default to China may not be justified. According to this week’s Economist, eastern Europe is actually easier to do business in than East Asia. The survey, conducted by the World Bank and the International Finance Corporation, looks at business regulation across 181 countries. The specific elements in the survey include how easy it is to set up a business, how easy it is to hire and fire workers, the level of corporate taxes and how commercial disputes are settled. The report has greater ramifications for companies thinking of setting up operations in eastern Europe as opposed to sourcing from eastern Europe. And yet on those key factors, eastern Europe scored surprisingly higher than East Asia.
So where did East Asia score higher than eastern Europe? Not surprisingly they did better on moving goods across borders the article points out. Government fees averaged $859 from Asia vs. $1428 in eastern Europe. Taxes are also lower. What is the takeaway? It’s not going to hurt your sourcing efforts as well as your sales efforts to pay a little attention to other parts of the world. We’ll be covering sourcing from eastern Europe in the coming weeks.