The BRICS are coming! Everyone knows it. Global economists and market forecasters have been shouting about the rise of emerging economies from the rooftops - blogging, chatting, and posting - alternating between warnings of impending doom, and promises of new markets and mad money. So what's the reality behind the noise‾ Are Western businesses working diligently towards better collaboration with these emerging economies, or are they frightened, confused, and misinformed‾
"14 percent"&brkbar; believe Russia's chief product is vodka."
Approximately 20 percent of the world's wealth will soon reside in the five countries often referred to as BRICS: Brazil, Russia, India, China and South Africa. What these nations all have in common, as first articulated in 2003 by economist Jim O'Neill of Goldman Sachs, is the demonstrated will to embrace global capitalism, coupled with formidable natural resources and massive, growing populations. China is expected to lead the world in the supply of manufactured goods, while India leads the way in the services sector. Brazil and Russia boast a wealth of natural resources, including oil and metals.
So how exactly are Western businesses taking advantage of the myriad opportunities presented by the ascent of these new global economic players‾ A new study conducted by Datamonitor, and commissioned by BT, surveying 800 senior-level executives from the U.S., U.K., France and Germany uncovers a marked, sometimes humorous, lack of basic cultural understanding.
For starters, 14 percent of senior executives from Western countries believe Russia's chief product is vodka. In another surprising result, almost nine out of ten executives surveyed cannot name the currency of Brazil (it's the Real, but you already knew that.)
Do these answers belie a deeper, more serious ill-preparedness for the rigours of collaboration with BRICS‾ One thing's for certain: ignorance in business is not bliss.
Perception and reality
Despite this apparent knowledge gap, a clear majority of Western executives surveyed understand that it is "crucial" their businesses learn to work successfully with these emerging markets. So here's the problem: If Western businesses understand the importance of collaborating with BRICS nations - even the cost of not doing so - what's stopping them‾
Datamonitor's study, titled Building Business with BRICS, reveals that over 70 percent of those surveyed either agree, or strongly agree, that organizations in the "developed" world are better equipped technologically to work internationally than those in BRICS.
"The message clearly hasn't filtered through that these nations are not catching up; they are already equipped to make an impact on the global stage."
Former BT Global Services Chief Executive Officer, Francois Barrault remarked that: "This is a troubling finding. The message clearly hasn't filtered through that these nations are not catching up; they are already equipped to make an impact on the global stage. They have shown remarkable agility and speed at adopting new collaborative tools and technologies - quicker, in many cases, than in the US or Europe."
In 2005 alone, the BRICS countries invested more than $63.8 billion on IT technology, according to IDC. Over the next four years, BRICS nations' commitment to technology is expected to account for well over six percent of total technology spending in the world.