"Protectionism will remain on the business agenda for the foreseeable future," said James Watson, editor of the report. "Executives realise that they must adapt to uncertainty in many of their markets."
Ian McCartney, UK Trade Minister responsible for UK Trade & Investment, commented: "World trade has been one of the principal engines of global economic growth over recent decades, and increased protectionism risks putting the brakes on that growth. Globalisation should be seen as an opportunity, not a threat. Protectionism leads to less trade, lower growth and therefore lower employment and more poverty. Those economies that benefit from globalisation will be those that take the long-term view and provide stability in the business environment. This allows business to invest and plan ahead with greater confidence."
The impact on economic growth of a rise in protectionism could be severe. Economist Intelligence Unit forecasts show that a relatively modest backlash against globalisation could shave nearly a full percentage point off annual world GDP growth during the period 2011-2020.
While broadly in favour of free trade, however, executives are more reconciled to protectionism in their home markets than in overseas markets. This was particularly true of respondents in the Asia-Pacific region, where 48% of firms agreed that protectionism provided a "crucial buffer" for young firms and sectors, compared with 27% in North America and 24% in Europe.
For those determined to break into a new market, or grow an existing one, the barriers to trade and investment become challenges to deal with, work around or potentially even exploit. Localisation is the primary strategy for coping with protectionism, and forming a strategic alliance (50%) or joint venture (41%) with a local firm were the top two approaches taken by survey respondents.
Other ways of dealing with protectionism to emerge from the survey results and interviews with executives include:
* Lobby widely and positively. The best lobbying is friendly, positive and demonstrative of bilateral benefits; ultimatums are unwise. Firms may get better results lobbying as a group.
* Be flexible and fast. Numerous companies interviewed for the report highlighted the merits of smaller, more autonomous business units, which can move quickly to react and take advantage of changes as they happen.
* Fight the right battle. Technology and global integration are likely to throw up new forms of protectionism. Firms should make sure they're dealing with tomorrow's problems, not yesterday's.
