Western business underestimates emerging countries capabilities

press-release
Tuesday, 17 July 2007 05:45

A major new international study by BT has revealed that Western business is not fully prepared for the imminent impact of emerging markets.  While more than six out of ten (64 per cent) directors of large American, British, French and German corporations accept that emerging economies will “reshape” the global business landscape, many seem to have only a rudimentary knowledge of their business environments. Even though a clear majority (61 per cent) of respondents admit it is “crucial” their business is able to work with the economies of Brazil, Russia, India, China and South Africa – the so-called ‘BRICS’ nations – to succeed in the long term, many of them demonstrate worrying ignorance of the realities of those countries: almost nine out of ten directors (88 per cent) could not name the currency of Brazil and 14 per cent believe that vodka is the main product of Russia, for example. 

·       Russia is perceived as the least comfortable BRICS economy in which to do business (24 per cent)

·       Businesses in the manufacturing industry are the most active in the BRICS economies; 82 per cent of respondents said that their company was already working with other businesses within BRICS

·       51 per cent of companies within the financial and professional services sectors are active in the regions. The BRICS economies are an opportunity for these companies to apply their specialised knowledge to a rapidly developing economic model

·       Few government & non-profit and education & healthcare companies are active; such companies are generally prohibited in their expansion overseas.

Companies with revenues in excess of $1 billion are currently the most active within the BRICS economies. The increasing trend towards globalisation has a wider effect on such firms who must look to developing economies to enhance sales, diversify their geographical portfolios and minimise costs through low-cost labour and energy.