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%) 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%) 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%) could not name the currency of Brazil and 14% believe that vodka is the main product of Russia, for example.
BT commissioned Datamonitor to undertake the study of 800 senior executives in the US, UK, France and Germany for its study, “Building Business With BRICS.” The study discovered that more than seven out of ten (72%) Western directors believe that organizations in the ‘developed’ world are better equipped technologically to work internationally than those in BRICS. Francois Barrault, CEO, BT Global Services, said: “This is a troubling finding. The message hasn’t filtered through yet that these nations 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. Western organizations need to increase collaboration in and with BRICS businesses or risk being left behind. Western executives have the systems in place to work with BRICS. In terms of the technology that enables collaboration between organizations and countries, there is an effective global network in place. But Western businesses need to do more to fully engage with BRICS countries. Successful collaboration between organizations in the West and those in BRICS will be a sign that globalization has come of age. ”
According to the study, four in five (80%) of directors realize that the necessary information and communication technology is readily available to allow their businesses to work effectively with those in BRICS. Despite this, the study found that directors perceive data security to be the main barrier to effective collaboration with international businesses, followed by different legislation and/or regulations and political interference.
The full report, “Building Business With BRICS”, can be downloaded from www.bt.com/global/collaboration/BRICS/.
Other findings include:
35% of directors do not know the currency of Russia, 55% do not know the currency of India and 65% do not know the currency of South Africa
India is perceived as the most comfortable BRICS economy in which to do business, significantly more than China, which was rated second (30% to 23%)
Russia is perceived as the least comfortable BRICS economy in which to do business (24%)
Businesses in the manufacturing industry are the most active in the BRICS economies; 82% of respondents said that their company was already working with other businesses within BRICS
51% 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 specialized 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 globalization has a wider effect on such firms who must look to developing economies to enhance sales, diversify their geographical portfolios and minimize costs through low-cost labor and energy.
Background information to this article:
BT commissioned Datamonitor to undertake the study of 800 senior executives in companies from a range of sectors, with turnovers from $10 million to over $1 billion, in the US, UK, France and Germany for its study. (publictechnology.net)