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Meet the BRICs
Transcript of Meet the BRICs
Largest country in South America & Latin Americ
5th largest population in the world
7th largest economy by PPP
Its economic reforms provides the country with new found international influence
2nd largest economy in world
Growth rate 10%
Largest exporter & second largest importer of goods
Largest manufacturing economy
Ranked 87th by nominal GDP
important role in economy, supplying raw material
8th largest economy
economic growth increase by 1.8%
GDP of 2.5% limited due to poor people
In the event that the BRICs fail to meet projected performance, what would be some of the implications to international business?
expected to become powerful forces
China and India: dominant global suppliers of goods and services,
Brazil and Russia: principal suppliers of raw materials.
Together they generate more than 25% of global GDP
This demonstrates why the BRICs are expected to be the driving growth of the world economy, however if they fail to meet their projected performance
the global economy may suffer from this as many countries rely on their support from exports.
international business may decline
international business depends upon the BRICs providing a dominant force in generating growth.
Most rapid growing economy
1.1 billion population
12th largest economy in the worl
3rd largest in Asia
Expected to outgrow China
GNI per capita for BRIC countries
increased when adjusted to PPP
the emergence of BRICs under consumption of resources and production of pollution at the current US per capita level challenges the sustainability of the global environment.
Economic growth is a quantitative measure based on an increase in the capacity of an economy to produce goods and services.
Economic development is a qualitative measure which focuses on broader multidimensional concepts including social health and educational indicators
What are the relative merits of GNI per capita vs the idea of purchasing power, human development, and green economics as indicators of economic potential in the BRICs?
Map the likely evolution of the BRIC’s
What indicators might companies monitor to guide their investments and actions?
In 2010, the BRIC countires mutually accounted to more than 40% of the entire population and 30% of the land mass
All BRIC countries shown positive economic growth
global recovery process, restructuring the global economic order
To guide investments, monitor GDP, GDI, PPP
companies should also assess the growth rate, productivity, unemployment levels of an economic enviroment
Social indicators are equally important, they include literacy rates, life expectancy, infant mortality etc.
How might managers interpret the potential for their product in a market that is, in absolute economic terms, large but, on a per capita basis characterised by majority of poor to very poor consumers?
BRIC managers rely on consumer market based on low class
high GNI growth rates due to the relatively small size of their economy
most dominant economies by 2050
newly advanced economic
Do you think recency bias has led to overestimating the potential of the BRICs?
How would you, as a manager for a company assessing these market, try to control this bias?
Recency bias: delusion that current trends will continue indefintely and uninterrupted
Wall Street crash 1929, main cause for the Great Depression
growth of BRIC countires will be at rapid rate
crucial for manager to conduct research about particular industry
in order to control the bias and not over estimate their profits
future cannot be defined as being the same as present
What are implications of the emergence of the BRICs for careers and companies in your country?
UK greatly affected
More imports of cheaper goods - increase demand
decline in economy
more students - brain drain UK
increase trading and financial spending
but the BRICs still have more power