1. RSM International Conference, Singapore 2007 RSM Global Business Forecast Middle Enterprises in the World Economy David Bartlett Economic Adviser, RSM International

2. RSM International Conference, Singapore 2007 Overview of Report OBJECTIVES Examine global opportunities and challenges facing middle enterprises Deliver actionable recommendations to mid- sized companies navigating global shifts Showcase the knowledge and expertise of RSM International professionals METHODOLOGY Detailed questionnaire addressing key cross- border issues affecting middle enterprises Responses by 130 RSM International professionals Telephonic interviews of 40 survey participants DIFFERENTIATION Focuses on globally active middle enterprises Blends survey results and qualitative analyses Highlights contributions of individual RSM International firms

3. RSM International Conference, Singapore 2007 International Growth Most middle enterprises focus on their domestic markets despite rising international growth prospects Asia, Europe, and North America offer the best growth prospects for mid-sized companies Middle enterprises rely on traditional exporting, but increasingly use non-export strategies

4. RSM International Conference, Singapore 2007 Global Competitive Threats Import competition represents the foremost threat to middle enterprises Emerging market-based companies are generating mounting competitive pressures worldwide Mid-sized companies are prioritizing investments in human capital to meet global competitive threats

5. RSM International Conference, Singapore 2007 International Business Risks Economic downturns and financial crises rank as the primary risks facing middle enterprises Mid-sized companies exhibit a strong awareness of global business risks, but lack coherent risk management strategies Middle enterprises are underutilizing a growing repertoire of international risk management tools

6. RSM International Conference, Singapore 2007 Industry and Sector Trends Services offer the greatest growth potential for globally active middle enterprises Mid-sized manufacturers enjoy important opportunities in bioscience niches and other market segments with low barriers to entry Expansion of the global market for renewable energy opens high-growth, high-margin niches to technologically adept middle enterprises

7. RSM International Conference, Singapore 2007 International Operations Middle enterprises are implementing lean manufacturing and related techniques to counter low-cost challengers from China Mid-sized companies are leveraging advances in international shipping and logistics to manage global supply chains Middle enterprises are utilizing direct sales and Internet-enabled distribution to reduce their dependence on independent distributors

8. RSM International Conference, Singapore 2007 Global Finance For middle enterprises, the rise of emerging economies represents the most significant development in global finance The exchange rate impact of the U.S. current account deficit is not considered a critical issue in the middle enterprise sector While commercial banks remain the primary funding source for middle enterprises, private equity has become a major financial vehicle

9. RSM International Conference, Singapore 2007 Emerging Markets East Asia, Southwest Asia, and Central and Southeastern Europe figure importantly in the strategies of globally active middle enterprises The weak business environments of Latin America and the Former Soviet Union reduce the attractiveness of those emerging markets Building international brand equity constitutes a key challenge to emerging market-based companies pursuing global growth opportunities

10. RSM International Conference, Singapore 2007 Human Resource Management The global war for talent has become a central axis of competition in the middle enterprise sector Mid-sized companies in professional/financial services, Information Technology, and manufacturing report serious labor shortages Middle enterprises are poorly positioned to compete with large companies in the bidding for skilled employees, heightening the imperative of effective human resource management

11. RSM International Conference, Singapore 2007 Utilizing RSM Global Business Forecast Business Development Client Services Marketing

12. RSM International Conference, Singapore 2007 Questions? David Bartlett Economic Adviser, RSM International david.bartlett@rsmi.com