Treasurers looking to capitalize on the opportunities of globalization must first address the shortfall in skilled workers and the inconsistency of global business practices. The solution, according to John Danilovich, Secretary General of the International Chamber of Commerce, is providing high-quality, standardized, professional education that is recognized and accessible worldwide.
Professional education is crucial to encouraging global economic growth, and it is therefore important to provide education that caters to the specific needs of international trade and development. With this goal in mind, the International Chamber of Commerce (ICC) recently launched the ICC Academy, a professional-education initiative.
New world creating new opportunities
Certainly, the process of globalization continues to create new opportunities for business. Emerging markets are becoming increasingly prominent – trading in growing volumes both with developed economies and among themselves. Indeed, it is estimated that this phenomenon, known as ‘south-south’ trade, will make up around a third of the world’s trade by 2020. And as the emerging markets grow, so too does the number of potential business partners around the world.
Meanwhile, thanks to today’s digital technology, it is now easier than ever to contact and communicate with new partners. Combined with the rise of south-south trade, this is making business opportunities more abundant and more accessible to more companies than ever before.
Yet to profit from these opportunities, companies need to be better prepared. Businesses currently suffer from a shortage of professional skills within the workforce – a shortage noted, for instance, in a recent survey by the Financial Executives Research Foundation and consultant Protiviti. Their survey highlights the challenge of securing the right talent as one of the top five issues facing financial executives in the US. Of course, this phenomenon affects organizations of all sizes and in all geographies.
This has a strong bearing on treasury departments. Treasurers are in the vanguard of corporate globalization as they adjust to the increasing number of global partnerships and keep track of rapidly-changing market trends. Meanwhile, in the wake of the global financial crisis, there is an increased need for workers with strong risk management skills. Liquidity risk has become a focus for corporates in this regard since the implementation of Basel III, which requires banks to hold a greater proportion of their capital in reserve.
Yet it is not only workers in treasury that need to learn new skills. Treasurers have long been saying that their colleagues in other departments need a better understanding of the cash component of their roles. Workers who do not fully understand the treasury implications of their role can incur unnecessary costs, which can be magnified for larger deals. Now – with more-complex and large-scale international deals becoming the norm –the time is right to eliminate inefficiencies created by limited understanding.
Professional education is the answer – and crucial to firms’ success will be the quality of this education. The key to this is learning from industry experts, who can offer “on-the-ground” experience and insight into the best skills and practices current in global business. This information will be invaluable to professionals – and help companies drive their competitive advantage through their employees.
The problem of inconsistency
The ICC Academy will address inconsistencies in worldwide business practices, which have led to the fragmentation of business practices and standards worldwide as well as become an obstacle to growth. The key to this is offering standardized, reputable, professional education that can be accessed anywhere in the world.
As a result of diverse geopolitical and economic legacies around the world, professionals’ approaches to business differ greatly from country to country. These different approaches often prove to be incompatible – slowing international transactions and hampering international partnerships.
The concept of supply chain finance, for instance, is one that lacks an agreed set of terms, products and practices. Because the concept encompasses such a diffuse range of activities, supply chain finance is often understood very differently by workers depending on where they are based and what they do within the field. The inconsistency this creates is an ongoing challenge for treasurers and finance directors across the world.
It is therefore important for professional-education courses to be standardized – making them identical in content and quality throughout the world. The ICC Academy facilitates this through centralization – producing and distributing all content from a single location in Singapore, and thereby eliminating the risk of regional variation.
Global reach is also crucial if this standard is to be influential worldwide. Technology, of course, is the way forward in this area, as the ICC Academy has recognized. The courses are delivered via a digital platform that enables people around the world to follow the same course over the Internet, no matter where they are. This makes education available even in areas where access has previously been limited.
Global recognition
Standardization and global reach are crucial elements in helping education harmonize global business practices. Yet also essential to the initiative is the need to ensure that this education is recognized worldwide. In this respect, the Academy benefits from ICC’s global reputation – meaning its certification is trusted by professionals and employers alike. Indeed, ICC experts generate and execute the courses.
It is the ICC’s belief that education – by addressing the skills shortage and promoting consistency in global business practices – can improve the work of treasury departments worldwide. With the obstacles removed and opportunities rife, tomorrow’s business environment will be one in which treasuries can thrive.