BANGALORE, India (AFP) – Western companies exhibit a worrying lack of awareness about emerging markets like India that are reshaping global business, according to a British Telecom survey released here Thursday.
The survey polled 800 directors of large American, British, French and German corporations to gauge the level of their knowledge about the so-called BRICS countries — Brazil, Russia, India, China and South Africa.
More than five out of 10 directors could not name the currency of India, the rupee; nine did not know that the real is the Brazilian monetary unit and 14 percent believed vodka, rather than oil, is Russia’s main product.
“While more than six out of 10 directors… accept that emerging economies will reshape the global business landscape, many seem to have only a rudimentary knowledge of their business environments,” said the report.
T.K. Bhaumik, chief executive at Reliance Industries, India’s leading conglomerate, said he was shocked by the survey’s findings and called it a hangover of the past when Western markets dominated world business.
“It’s shocking if you are a CEO and don’t know the currency of India,” Bhaumik said. “Even an otherwise illiterate Indian will know the currency of the US is the dollar.”
Until 1990, developed economies accounted for 75 percent of world trade and 85 percent of foreign direct investment, a trend that is reversing itself as emerging markets come to the fore, he said.
BRICs was a term originally coined in a Goldman Sachs report and stood for Brazil, Russia, India and China.
The 2003 report argued that the potential of the four countries is such that they may become among the four most dominant economies by the year 2050, accounting for 40 percent of the world’s population and a combined gross domestic product of almost 15 trillion dollars.
The report said Brazil, Russia, India and China had changed their political systems to embrace global capitalism, and predicted China and India, respectively, to be the dominant global suppliers of goods and services.
In India, an emerging service powerhouse, global corporations from manufacturing giant GE to telecom services provider Vodafone and the British bank HSBC are expanding to tap a huge market of 1.1 billion people that is experiencing record economic growth.
Yet the BT-commissioned survey, carried out by market-research firm Datamonitorstudy, found that more than seven out of 10 Western directors believe that organisations in the developed world are better equipped technologically to work internationally than those in BRICS.
“This is a troubling finding,” Francois Barrault, chief executive of BT Global Services, said in a statement.
“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,” Barrault added.
“Western organisations need to increase collaboration in and with BRICS businesses or risk being left behind.”
India is perceived as the most comfortable BRICS economy in which to do business and Russia the least, the survey found.
Companies with revenues in excess of one billion dollars are currently the most active within the BRICS markets.
“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 minimize costs through low-cost labour and energy,” the report said.