BRIC – alternatively known as the “big four” is an acronym that refers to the newly advanced countries of Brazil, Russia, India and China. Goldman Sachs was the first to introduce this acronym in one of their reports in 2003, stating that by the year 2050 these four economies would be wealthier than most of the current major global economic powers. Some sources have also predicted that by the year 2027, the Big Four economies will even overtake the G7 economies.
Unlike the countries affiliated to the European Union – that have more of a political alliance – the BRIC nations have the potential to form a powerful economic coalition. Recent statistics show that in the coming years, China and India will become the world’s dominant suppliers of manufactured goods and services, while Brazil and Russia will become equally dominant as suppliers of raw materials. Further, due to the lower labor and production costs, many companies are looking at the BRIC nations as an opportunity for foreign expansion.
The BRIC nations have realized that the development of small businesses and enterprises are the most important factors for overall economic development and have accordingly prioritized the growth of the SME (Small and medium enterprises) sector. These countries feel that SMEs are of utmost importance, as they provide benefits such as employment, exports, entrepreneurship and productivity.
Internationalization is another factor towards the growth of SMEs in the BRIC nations. Due to the rapid advancements in telecommunications, transportation and the Internet, the firms of these nations are becoming international much faster. Recent developments show that Governments of the BRIC countries are nurturing the SME sector by providing them adequate funds and also supporting their technological needs.
From an investor’s stand point, the word “BRIC” has become a synonymous for “emerging markets”. Larger companies are eyeing these courtiers for investment and business expansions. The BRIC nations have also become pioneers in global competition and job creation. According to a recent study conducted by the Oxford University, finding talent for global expansion is the new imperative for these nations. With a population of almost three billion people in total and a combined GDP of US$14.8 trillion, the BRIC countries have become the most talked about nations in the world economy.
Last but not the least; technology and R&D have become the most important factors that have contributed to the development of the SME sector of the BRIC nations. These nations have realized that technology is helping them achieve longevity and sustainable growth. From the year 2002 to 2007, the BRIC nations have doubled their spending on R&D and science research, raising their collective share of global R&D spending from 17 to 24%.
So, as a business owner or investor, it is important to keep a close watch on these developing nations, as they present great potential and opportunity for business expansions. It is about time that businesses around the world start recognizing the potential that these nations have to offer in terms of market growth, cost savings, cheap labor, technology and a rapidly growing educated population.