Cor­po­rate Lounge

Busi­ness travel drives in­no­va­tion

Enterprise - - Contents -

As the ap­pli­ca­tion of video con­fer­enc­ing is on the rise, there are new ar­gu­ments over the chal­lenge to face-to-face busi­ness meet­ings. Ex­perts term these chal­lenges as real and valid, con­sid­er­ing the is­sues of hu­man re­source, profit bal­ance and the global en­vi­ron­ment. There­fore, im­por­tant ques­tions arise as to the value of busi­ness travel.

‘ Busi­ness travel is eco­nomic stim­u­lus’. This is es­tab­lished by ex­perts who at­tempt to put away the al­ter­na­tives to face- to­face meet­ings. In or­der to grow, busi­nesses have to in­vest. In par­tic­u­lar, among the smartest busi­ness in­vest­ments that com­pa­nies make, busi­ness travel and in­cen­tive awards top the list. Sur­veys show that busi­ness ex­ec­u­tives pre­fer face- to- face com­mu­ni­ca­tion over other means of com­mu­ni­ca­tion, as it plays a piv­otal role in ne­go­ti­at­ing deals, sell­ing prod­ucts, and build­ing longterm re­la­tion­ships with clients and co- work­ers.

More­over, to counter the opin­ion of con­sid­er­ing busi­ness travel as a bur­dened ex­pense in the wake of cor­po­rate col­lapses, ex­perts take it as an op­tional ex­pense in hard eco­nomic times. This is be­cause the busi­ness en­ter­prises are al­ready not in the habit of throw­ing away money, there­fore it does not make sense to cut ex­penses be­yond a cer­tain point. En­ter­prises in­vest in their em­ploy­ees trav­el­ing be­cause they think it makes the en­ter­prise more pro­duc­tive and more prof­itable.

Over the past few years, there has been in­tense ex­plo­ration of con­fer­enc­ing tech­nolo­gies. But as a grow­ing num­ber of com­pa­nies im­ple­mented de­mand man­age­ment strate­gies and sought to cal­cu­late the re­turn on busi­ness travel in­vest­ment, they found that busi­nesses can also raise prof­its by in­creas­ing travel spend, pro­vid­ing the in­cre­men­tal in­crease in sales is greater than the in­cre­men­tal in­crease in travel ex­penses.

Im­por­tantly, not all spend­ing cuts are con­sid­ered smart cuts. When com­pa­nies re­duce their travel bud­gets, there are neg­a­tive con­se­quences that can now be quan­ti­fied in terms of lost rev­enue and profit growth, and also in terms of giv­ing com­peti­tors a dis­tinct ad­van­tage.

Re­port­edly, slightly less than 1 per­cent of the av­er­age com­pany’s rev­enue is spent on busi­ness travel. Salesre­lated meet­ings com­prise about one- third ( 34 per­cent) of busi­ness travel ex­pen­di­tures. Work at client of­fices fol­lows with 22 per­cent. In­ter­nal meet­ings, con­fer­ences, and trade shows each rep­re­sent about 10 per­cent of the av­er­age cor­po­ra­tion’s travel bud­get.

In the global busi­ness sce­nario, com­pris­ing of di­verse na­tion­al­i­ties, de­vel­op­ing per­sonal re­la­tion­ships re­mains one of the most im­por­tant el­e­ments of do­ing busi­ness and is im­pos­si­ble with­out face- to­face meet­ings. More­over, travel can help fa­cil­i­tate ex­change of in­for­ma­tion and trans­fer of ideas. Specif­i­cally, in­ter­na­tional busi­ness travel may link trav­ellers fa­mil­iar with for­eign tech­nol­ogy with do­mes­tic en­trepreneurs and foster do­mes­tic in­no­va­tion.

In­tu­itively, busi­ness and leisure travel is af­fected by many of these fac­tors ( size of the econ­omy, travel costs be­tween coun­tries, etc.). How­ever, leisure trav­ellers have no busi­ness in­ter­ests and do not con­vey tech­no­log­i­cal knowl­edge. Times when a coun­try re­ceives ex­traor­di­nar­ily high num­bers of busi­ness trav­ellers rel­a­tive to leisure trav­ellers are most likely those when the coun­try ex­pe­ri­ences in­for­ma­tion and tech­no­log­i­cal break­throughs.

Thus, in­ter­na­tional busi­ness travel is not only an im­por­tant el­e­ment for a coun­try’s rate of in­no­va­tion, it also in­di­cates that lib­er­al­iza­tion of in­ter­na­tional air travel pos­si­bly lead to a higher rate of in­no­va­tion in the world.

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