BDO International Business Compass

International Location Index for the Medium-Sized Companies

Column 3: Socio-Cultural Conditions

The socio-cultural conditions portray the cultural and social situation of a particular country. Population growth is an indicator for the growth dynamics of the population between 2005 and 2010. The annual growth rate is calculated from the nth root of the total growth rate, whereby "n" represents the number of years over the course of the period in question. Faster population growth means that there are more potential workers and consumers. The unemployment rate shows the proportion of job seekers in relation to the total workforce and is an indicator of the situation on the labour market. A low unemployment rate indicates a stable job market. Per capita consumer spending measures the average consumer spending of private households per person. It is an indicator of the income situation of private households. Consumer spending of private households is equivalent to the market value of all goods and services bought by households, including durable goods such as washing machines or cars. High consumer spending means that the potential purchasing power of private individuals is also higher. Health measures the state of health of the population. This indicator calculates the life expectancy at birth as an index with a minimum value of 20 years and the observed maximum value between 1980 and 2010.[1] A higher measure indicates a higher level of health of the population in question. Education is an index taken from the average school periods of adults and the expected school periods of children.[2] It measures the level of education of the population. A higher measure indicates a higher average level of schooling and education. Labour freedom portrays the legal and regulatory labour market conditions of a particular country and is a measure of job market restrictions.[3] Greater freedom in the labour market means that it is easier to hire and, if necessary, fire workers.

1 Cf. Klugman et al. (2011), 15.

2 Vgl. Klugman et al. (2011), 15. Klugman et al. (2011), 15. The evidence on hand leads to the conclusion that the long-term minimum of all societies is about twenty years (cf. Riley (2001), 33).

3 Cf. Miller et al. (2012), 459-460.