Vietnam has once again been selected as the number one investment destination, outside of Brazil, Russia, India and China (BRIC), according to a report published by the UK Trade & Investment and Economist Intelligence Unit.
This is the third consecutive year that Vietnam has enjoyed the designation from the British agency.
The "˜Great Expectations: Doing business in emerging markets' report offers new insights from international investors about which markets they see as being the global growth engines of the future.
The report is based on a survey of more than 520 global executives from every sector. All respondents are already doing business in emerging markets or plan to do so in the next two years.
The UK Business Secretary Vince Cable said: "The balance of global economic power is shifting toward emerging markets and this is recognized in UK Trade & Investment's report. UK firms are using their expertise to help promote growth and prosperity in these markets."
The report's authors found that the top three markets for investment, in the next two years, are China, Vietnam, and India.
Emerging markets are viewed as sources of new consumer demand. Seventy-six percent of investors see emerging markets as a source of new business growth.
By 2030, 93 percent of the world's middle class will live in what we now consider "emerging markets," the report said.
Companies are now shifting their priorities toward a range of other developing countries outside their well-established operations in the BRIC countries.
For many firms, emerging markets are increasingly familiar places. Nearly half of the respondents reported having operations in one or more emerging markets over the course of the last decade and two thirds said they had been working in the areas for six or more years.
Institutional knowledge of these countries is far higher than it was at the turn of the century, the report found.
More executives than ever believe that the potential rewards far outstrip the risks within both the BRIC countries and other emerging markets. Fifty-two percent expect growth prospects in their once-risky emerging market businesses to be "significantly better" over the next two years.
Local companies in emerging markets are sought after for partnerships and alliances. Despite a greater ease with the risks of new places, the need to tap into local knowledge and contacts quickly remains strong, the report found.
Emerging markets are not just for big business. One in three small- and medium-sized enterprises polled by the authors planned to expand into a new emerging market in the next two years through joint ventures or partnerships with local companies.