(FORTUNE Magazine) – DANIEL ARBESS was a baby-faced associate at the venerable New York law firm White & Case when he first traveled to Prague on vacation. It was December 1989, and the Czech capital was just emerging from four decades of communist darkness. Deciding that he "wanted to be part of history," Arbess devoted the rest of his time off that year to shuttling across the Atlantic and finally managed to persuade the Czech government to award his firm the legal work involved in selling the Skoda Auto Co. In 1991, Volkswagen agreed to invest $6.4 billion for Skoda, the biggest cross-border industrial deal so far. For his role in grabbing this gold mine, Arbess became White & Case's youngest partner ever. Today the 33-year-old veteran dealmaker dresses in European suits and, when not globetrotting, works out of an office filled with expensive Italian furniture overlooking Prague's baroque Old Town Square. "The Iron Curtain's collapse was not just about politics," he says. "It was also an unprecedented business opportunity." In hot pursuit of similar opportunities, record numbers of ambitious young Americans these days are pulling up stakes and moving overseas. Most are between the ages of 20 and 40, well educated, often unattached, and starting their careers -- or eager to change them. All are convinced that foreign lands ( offer more valuable experience and richer rewards than could be garnered back home. Michael Giles, 35, a Columbia law graduate, last year left Silver Spring, Maryland, and a $160,000-a-year job as a marketer for IBM to resettle in Soweto, a black township outside Johannesburg. "People back home thought I was crazy," he says. But where others saw a fetid squatter camp with no running water or sewage systems, Giles saw opportunity. Realizing that only four laundromats catered to Soweto's 4.5 million black residents, he arranged a $9.3 million loan from the U.S. government's Overseas Private Investment Corp. Result: his QuickWash-Dry Clean USA corporation is now building a chain of 108 coin-operated outlets to serve South Africa's black townships. Not all these new pioneers are entrepreneurs. Newly minted MBA Eric Woo, 28, could have landed a big-money job in the U.S. when he graduated from Northwestern last June. Instead, Woo persuaded AT&T to send him to Hong Kong to sell integrated networks in China and Southeast Asia. "I didn't come to live the cushy life," says Woo. Unlike previous waves of U.S. expatriates, he receives no housing allowance and must squeeze into a 600-square-foot studio apartment. For Woo the payoff is a pole position on the fast track. "Here I am responsible for multimillion-dollar deals," he says. "If I return home, I will be far ahead."

THE FORCE driving this exodus is familiar but compelling: While the U.S. and the rest of the developed world are stuck on slow-to-modest growth tracks, for the first time in history three developing regions in the world -- Eastern Europe, Southeast Asia, and Latin America -- are primed for rapid and sustainable economic expansion. Some optimists include South Africa in this category as well. "On the business Richter scale, Hong Kong is a ten," says Mike DeNoma, a former Kentucky Fried Chicken executive who is setting up his own chain of Chinese fast-food outlets there. "New York is only a four." China's move to free markets has already doubled the number of Americans in Hong Kong over the past decade, to 29,500. Yanks even outnumber the Brits who colonized the place. After less than a year as a would-be entrepreneur in Asia, DeNoma can't understand why more Americans aren't heading his way. "The business is screaming," he says. U.S. business schools are getting the message. "We now have more students interested in going to Prague than Chicago," reports Colleen Troy, director of communications at New York University's Stern School of Business. At Northwestern's Kellogg School of Management, 300 of 1,000 students took a study trip abroad last year. Five years ago none did. Students at Columbia's business school even organized trips this year to Vietnam and Cuba.

THAT WILLINGNESS to try doing business in such far-flung destinations is one way this new generation of expatriates differs from its predecessors. From 1960 to 1976, nine of every ten American emigrants ended up in one of just seven countries -- in order of popularity, Mexico, Germany, England, Canada, Japan, Australia, and Israel, according to Arnold Dashefsky, a sociology professor at the University of Connecticut and co-author of the 1992 book Americans Abroad. "Jews went to Israel, Viet draft resisters to Canada, businessmen to England, and that was about it," he says. No longer. In the Czech Republic, the American expat population has soared to an estimated 30,000, vs. fewer than 100 in 1989. The U.S.-Argentinean Chamber of Commerce in Buenos Aires now receives ten rsums a month from job seekers, up from one a month when the country was ruled by an army dictatorship. How big is this outmigration of many of America's best and brightest? The Census Bureau keeps no official statistics on emigration, but population experts estimate that as many as 250,000 U.S. citizens now leave to live abroad each year, up from some 160,000 annually in 1980. What's clear is that the phenomenon is growing and far outpaces any comparable entrepreneurial exodus from other developed countries. In Prague and Budapest, Americans are far more visible than West Europeans, even though Germany, France, and Italy are close by and suffering from high unemployment. "Most young Europeans continue to live at home with their parents," says Ellen Lederman of J.P. Morgan in Prague. "Young Americans are independent and more mobile." Wherever they establish a commercial beachhead, these emigrants re-create a little piece of home. On any given night in Hong Kong, young Americans crowd the bars and discos of the Lan Kwai Fong neighborhood, looking as if they just walked out of a fraternity house, with their button-down Brooks Brother shirts, Ralph Lauren pants, and Bass Weejuns. At the Henry J. Bean bar in Buenos Aires, Yanks quaff pitchers of beer and catch the latest from ESPN on television. The U.S. colony in Prague has two newspapers, a radio station, and a restaurant that makes blueberry cheesecake and banana daiquiris. "New expatriates have it easy," jokes cartoonist Kenneth Nash in his book Prague on 13 Beers a Day. "I remember when you couldn't get a decent caffe latte in this town." If all this by now has you itching to pack your bags, heed a few words of warning. Eager entrepreneurs in developing countries face a host of challenges. The business infrastructure is often inadequate and badly managed; just getting a telephone line installed can take months. And securing building permits and contracts from Third World bureaucrats requires not only great patience but often some discreet greasing of the wheels with much appreciated dollars. "This isn't a place where you can pick up money off the street," says C. Yorke Lawson, a North Carolinian trying to sell fiber-optic technology to the Czechs. "You have to work tremendously hard." Americans lacking much-needed professional skills face especially daunting barriers. Elwyn Williams, managing director of headhunting firm Recruitment International, says he has managed to find a job for only one American in Prague in the past four years. "These youngsters come here right out of college," Williams says scornfully. "But they don't speak Czech or have the training to get a good job." Arrogant carpetbaggers with nebulous connections are even more unwelcome. "We don't want soft advice for hard currency," warns Vaclav Klaus, the Czech Prime Minister, referring to the legions of cowboy consultants and would-be dealmakers who crowded into his country's five-star hotels after the fall of the Berlin Wall. On the other hand, if you arrive with ideas for delivering products and services that were previously unavailable -- and have the drive to make them a reality -- doors can open quickly. Eugene Matthews, 33, a Harvard law school graduate, has just signed an $18 million deal to import 20,000 dairy cattle to Vietnam and establish two state-of-the-art dairy farms. Before, fresh milk was almost impossible to buy in that country. Working out of a French colonial villa in Hanoi, Matthews expects to soon land "a series of new investments." In Budapest, 27-year-old Harvard grads Robert Brooker and Adam Haven-Weiss are exploiting another untapped gustatory niche -- bagels. "I never tasted one before in my life," says Hungarian bank clerk Katarina Katalin as she happily munches a sesame bagel at one of their three New York Bagel outlets. "In the ! States there is so much competition," says Brooker. "Here you don't have to reinvent the wheel." Once they gain sufficient scale in Budapest, the bagel boys aim to expand their business into Western Europe. Startup costs for new businesses also tend to be lower abroad. Brooker and Haven-Weiss got launched with just $40,000 in seed money -- though finding the right ingredients was a hassle. "My bagel maker told me, Just go to the supermarket and buy a special type of yeast,'" Haven-Weiss recalls. "I turned to him and laughed." Special bagel flour initially had to be flown in from the U.S. Low labor costs are another advantage abroad. Salaries of highly qualified Hungarians run only about a tenth of German or American levels. In Hong Kong, University of Pennsylvania graduate Lori Quon, 26, has set up shop exporting ladies' clothes. "When I came here, the economy was really bad in the States," she says. But looking ahead, she figures low labor and material costs in China will give her a big edge over clothing producers back in the U.S. In particular, many developing countries need to build banking and legal systems almost from scratch, jobs made to order for big American law, accounting, and finance firms. Almost as soon as the Iron Curtain collapsed, this crowd invaded Eastern Europe, bringing along scores of eager young recruits. In 1989, junior accountant Margaret Dezse, sick of churning out one dull audit after another, eagerly volunteered when she heard that Price Waterhouse was opening a Budapest office. "When I arrived, there were almost no Hungarians who knew Western-style accounting rules," Dezse explains. Today, at the tender age of 31, she is a senior director and on track for a possible partnership. "I'm considered the veteran now," she says. Almost all types of American service providers are thriving overseas, including a few who are young only in spirit. George Lang, 70, became famous as a restaurant consultant and owner of Caf des Artistes in New York. Now he has returned to Hungary, his homeland, and restored the Gundel restaurant to its turn-of-the-century glory. "I'm bringing back style to a country that forgot the word," he boasts. When architect Piroshka Savany, 48, closed her office in New York and moved to Budapest, her practice exploded. "There were no local architects trained in Western building practices," she recalls. "We do turnkey projects; they don't." Her Budapest work includes renovations of bank offices and historic art nouveau cafs and plans for a giant new golf resort along the Danube Bend. In Prague, Whitney Brown, 24, of Aspen, Colorado, has started an even more basic business, Affordable Luxuries, which provides dry cleaning, baby- sitting, and catering services. "In the States you would have to be a catering specialist or a laundry specialist," she says. "Here you can do everything because the services didn't exist before." FINALLY, there's always the opportunity to prosper by providing services to your fellow expats. Trevor Cornwell, 30, initially moved to Budapest in 1991 to direct the National Service League, a program that recruits 18- to 28-year- olds for a year's service in Eastern Europe. Volunteers receive free housing and a stipend of about $50 a week; projects range from providing food to residents of Chernobyl to running a recycling program in Budapest. But Cornwell recently left day-to-day management of the Service League to set up an English-language radio show that beams throughout Central Europe. Next he's thinking of launching a regional English-language television program. "Eastern Europe doesn't need more charity," he says. "It needs more business." Lisa Frankenberg, 26, was backpacking through Europe after graduating from the University of California at Santa Barbara when she arrived in Prague and stumbled across some friends from her old college newspaper. Together they founded in 1990 a local English-language paper, Prognosis. But in a few months Frankenberg grew dissatisfied. "We were writing for backpackers," she recalls, "while our readers were the Arthur Andersen consultants and the Coopers & Lybrand accountants." So she and a partner started another paper, the Prague Post, a business- oriented weekly. Profitable from the start, it now has a circulation of 15,000. "All the would-be novelists have gone home," she says, dressed in a green power suit and fielding questions from her black leather swivel seat behind a stained wood office in downtown Prague. "Anyway, there were never so many aspiring Hemingways here as aspiring Donald Trumps." What of the traditional route to a career abroad, becoming an expatriate manager for a giant U.S. multinational? When Jean-Pierre Salzmann of the IMD Business School in Lausanne, Switzerland, worked for Procter & Gamble in Geneva during the 1960s, most of his bosses were American. Few spoke French. Most lived in giant suburban homes. "It was like they still could be in Cincinnati," Salzmann recalls. "They acted like pampered princes." Those days are mostly over. Today most of the top executives for P&G and other companies with a large presence in the Old World are Europeans, who don't need to surmount any cultural obstacles. Says Salzmann: "The traditional expat is seen as a liability." In fact, reports of the expat's demise are exaggerated. What's different is the way they live (a lot less lavishly now) -- and who they work for. Nynex, which is expanding its cable business in Britain and building phone networks in Thailand, has 103 U.S. executives overseas, up from virtually none five years ago. Dell Computer, which had just a handful of overseas staff in 1988, now employs dozens of Americans abroad. "Expats now work more often for midsize companies, high-tech, fast-growing companies, rather than for the traditional FORTUNE 500," reports Jack Anderson of Ernst & Young Accountants in Paris. Consider Cisco Systems, a Silicon Valley speedster that specializes in building computer networks. It had about $250 million in sales last year in Europe. "The fastest-growing part of our business is outside the United States," says Charles Elliott, 37, who runs Cisco's European operations out of Brussels. Though Cisco hires many local managers, it has no plans to stop sending out American supervisors for them. "We need people from California who know the product," explains Elliott, who's been abroad for two and a half years and has had little trouble fitting into the European scene. Married to a Belgian he met in Europe, he points to his bulging stomach and notes, "I love the food here." In developing markets where the cuisine is less haute, companies often don't have a choice between local or expat hires. Experienced local managers just don't exist. Retailer Kmart, which is being squeezed and pushed around by rival Wal-Mart at home, bought the 13-store Prior department store chain in Czechoslovakia in 1992. The challenge there wasn't beating a local Wal-mart; it was introducing Western sales techniques. Sales clerks were given tags announcing I'M HERE FOR YOU, but many still hid behind the counters. Admits Imrich Gombar, director of human relations: "Our goal is to have Czechs running the business, but for the top positions that may take time." Meanwhile, Kmart veterans from Troy, Michigan, are trying to turn the faltering operation around. Personnel manager Gombar himself is an example of the new-style expat. He grew up in Czechoslovakia but moved to the U.S. in 1978. "I think like a Westerner," he says, "but I can work like a local." Kathleen Chartier of headhunters Heidrick & Struggles calls these valuable species "hybrids" and notes that language abilities give an obvious head start to, say, Czech- Americans or Vietnamese-Americans in their former homelands. SOMETIMES, though, even hybrids have trouble fitting back in. When Stephen Kostyal, a brash Hungarian-Canadian, took over the Ganz-Hunslet Train Co. in Budapest in 1988, he proceeded to lay off more than half the staff. "Many said, How can you do this? Aren't you one of us?' " he recalls. "I was looked upon as a traitor." Kostyal has since restored Ganz to profitability and married a native-born Hungarian. Still, in a country where telephone waiting lists can stretch a decade, he sits behind the cockpit of his black BMW sedan equipped with a portable phone and admits, "I'll always feel foreign." For the most part, though, these young Americans find themselves admired and welcomed in their host countries. In Brazil, David Wheeling, 28, an analyst with Baring Securities, the British investment bank, says his Americanness opens doors that otherwise might have stayed closed. "You can get to talk to a company CEO a lot more easily than in the U.S.," he explains. Martin Porcel, director of the U.S.-Argentinean Chamber of Commerce in Buenos Aires, agrees: "Americans bring a special know-how in management, commerce, and contact building." Is there a downside for the U.S. to this outpouring of some of the country's most enterprising citizens? Is the land long famous for draining away other nations' best brains now itself going to lose out? Almost certainly not. "It's a big plus," argues Robert Warren, director of statistics for the Immigration and Naturalization Service. "Americans abroad are a welcome sign of our increasing involvement in the world." Think instead of these young pioneers as a potent advance guard for American ideas, values -- and, above all, American exports -- a band whose training abroad should prove an invaluable asset to globalizing U.S. companies. Only a small percentage of these entrepreneurs will likely spend their lives outside the U.S. Partly that's because the locals are learning from them. The first laundromat in Prague was the American-run Laundry Kings. But a Czech entrepreneur recently opened up Laundryland, a cheaper duplicate with a popular local twist in this beer-loving nation: a pub in the basement. "The Czechs are getting the hang of this," says Whitney Brown, the founder of Affordable Luxuries. She plans to leave soon and attend business or law school in the U.S. For others, the expatriate life simply proves too tough on homesick wives and children. Joyce Freed accompanied her husband Peter to Budapest and helped him set up a computer import company, Duna Elektronika. But once the company is established, she plans to move back to Washington. "We have a child now and I want her to grow up in America," she says. Husband Peter says he will try to run the Budapest business from across the ocean. Even among childless couples, family pressures are intense. Haven-Weiss, the bagel magnate, recently saw his wife leave for New York, where she is finishing her medical studies. And he's had to fight an uphill battle with his parents. "My father said to me, Seventeen years of tuition for a bagel shop? Couldn't you do better in America?' I tell him I love America. I miss America. But I feel I can accomplish more here." That feeling of accomplishment, accompanied by the excitement of exotic locales, is what will keep a sizable core of this ambitious bunch abroad. "In the States you might see the mall all lit up," says J.P. Morgan's Ellen Lederman. "Here you have the Prague Castle." Money also counts. The new expats don't live like princes on company perks, but the dollar goes far in many developing countries. In South Africa a four-bedroom house with a large garden and swimming pool in Johannesburg rents for less than the cost of a one- bedroom apartment in New York. It usually comes with a full-time maid, nanny, and gardener. HONG KONG real estate is much more expensive, but Tom Nier, the owner of five coffee shops, and wife Sally Otten, an executive at Bank of America, say the territory is a terrific place to bring up children. "We have live-in help for our baby, which is something we could never have in the U.S.," he says. "It's also safe; there are no drive-by shootings." In Mexico, David West, the general director of the Tower Records subsidiary, spends weekends in the balmy climate of a nearby mountain resort, Cuernavaca. "There's more free time for my wife and myself," he says. A local marriage and a thriving local business can transform these feelings into a lifelong commitment. West, married to a Mexican, has no plans to return to New York and his former life of a harried investment banker. In Soweto, , Michael Giles's South African wife, Bernardette Moffat, is playing a key role in the development of his Quick-Wash laundromat chain. For them, coming to South Africa always was about more than simple material gain: They want to bring convenience to black lives and set an entrepreneurial example. "America is still a good place to make lots of money," Giles says. "But there's something intangible and immensely satisfying in helping bring about change." So for every going-away party in these foreign outposts, you'll find the American emigrants celebrating a new arrival or a holding a housewarming bash as well. And for every well-discovered locale like Prague, a new exotic destination beckons. White & Case's operation in the Czech Republic now numbers 12 lawyers, and its traditional contract law business is flourishing. "The decks have been shuffled here," Dan Arbess says. As Bohemia becomes less Bohemian, his life is changing. He arrived as a young bachelor. In September he became a father. His wife Marlene has launched a prospering real estate business in Prague. But the couple often come to New York, both for work and to visit her family. Much of the rest of the time he pursues privatization deals in destinations as far-flung as Morocco, Turkey, and even Vietnam. "Many of my colleagues are talking about Kazakhstan," he says. Kazakhstan? In Central Asia? "You bet," Arbess answers. "My skills are transferable to all emerging markets." For these pioneers in three-piece suits, the new American frontier is truly nothing less than the entire world.

BOX: 3 WAYS TO HIT PAY DIRT ABROAD

-- Don't be a stay-at-home professional. American accounting, legal, and consulting skills are in hot demand overseas. -- Entrepreneurs should focus on simple, moderately priced goods and services that locals don't offer -- everything from laundromats to bagel shops. -- To land a corporate job, hitch up with a fast-growing high-tech company --but don't ask for a fat package.