The Rise of the Big Emerging Markets of
Brazil, Russia, India, and China:
Implications for International Business
Teaching in the Next Decade
Joanna Scott-Kennel
Asta Salmi
ABSTRACT. The rise of Brazil, Russia, India, and China will shape
global resource use, the location of market demand and international
institutions and interdependencies in the decade to come. In this
paper we argue that an understanding of the historical and
institutional context of the BRICs, and the potential shift towards
a multi-polar world is important for developing curricula and content
in international business courses in the future. Implications for
international business theory and teaching are discussed.
KEYWORDS. Emerging markets, international business, inter-
national integration, IB theory, teaching, BRIC
Dr. Joanna Scott-Kennel is Senior Lecturer in International Business,
School of Marketing and International Business, Victoria University of
Wellington, P. O. Box 600, Rutherford House, 23 Lambton Quay,
Wellington, New Zealand (E-mail: joanna.scott-kennel@vuw.ac.nz).
Asta Salmi is Professor in International Business, Helsinki School of
Economics, P. O. Box 1210, FI-00101 Helsinki, Finland (E-mail: asta.
salmi@hse.fi).
Journal of Teaching In International Business, Vol. 19(2) 2008
Available online at http://jtib.haworthpress.com
© 2008 by The Haworth Press. All rights reserved
142 doi: 10.1080/08975930802118085
Joanna Scott-Kennet and Asta Salmi 143
INTRODUCTION
The spectacular economic growth and imposing size of the big
emerging markets has brought their current—and future—role in the
global economy under increasing scrutiny and speculation. While big
emerging markets initially attracted foreign investors from developed
markets due to an abundance of cheap resources, today they are
increasingly attractive as markets in their own right and as low-cost
locations for investment into knowledge-based activities (UNCTAD,
2006; Garten, 1997). They are generally defined by a large population
with low per capita income, but rapid pace of economic development.
Most also have governments which favor economic liberalization
and are in the process of moving towards free market economies.
Although parts of Africa, Asia, Latin America and the Middle East
are all big emerging markets, four countries—Brazil, Russia, India,
and China (or BRIC, a term first coined by investment bank,
Goldman Saehs) are thought to hold the most potential in the next
decade (Grant Thornton, 2007).
The foeus of this paper is the eeonomie and political rise of the
BRIC countries and the implications for teaching in international
business in the next deeade. Business interactions increasingly involve
MNEs from the BRICs and this shift from the classic North-South
dichotomy will fundamentally change the global business arena
(OECD, 2006; UNCTAD, 2006). Such trends require consideration
of a broader range of perspectives than the current—and relatively
narrow—Western-based approach to theory and teaching in inter-
national business.
The article is structured as follows. The first part diseusses three
key issues with regard to the BRIC countries in the international
business environment; namely, markets, resources and international
integration. The paper finds that the spatial, temporal and institu-
tional contexts surrounding the rise of the BRICs and the shift
towards a multi-polar world raise questions with regard to current
approaches to theory and teaching. Thus, the second part outlines
teaching implications from both theoretical and practical standpoints
and suggests that a global mindset and problem-based learning
approach be adopted, with emphasis placed on developing skills and
capabilities. Key challenges and suggestions for teaching are offered.
The article concludes by underscoring the need for teachers of
144 JOURNAL OF TEA CHING IN INTERNA TIONAL BUSINESS
international business to not only draw on past theories and events,
but simultaneously encourage a critical and constructivist approach
to capturing the turbulence that will characterize the next deeade.
THE BRIC COUNTRIES
In 2003, Goldman Sachs predicted that by 2025 the BRIC
economies together could account for more than half the size of
the G6 countries (in US dollar terms), and be larger than the G6 in
less than forty years (Wilson & Purushothaman, 2003). These
predictions not only fuelled intense interest in the BRICs, but
suggested major changes to the international business environment as
we know it today. From an economic standpoint, the infiuence ofthe
BRICs is already apparent. Since 2000, the BRIC countries have
accounted for 30% of global growth and their share of global GDP
has risen, in dollar terms, from 7.8% to 11% (Johnson, 2006). The
Economist reports they currently account for two-fifths of the total
GDP of all emerging economies. At market exchange rates, China
and Brazil rank among the world's top ten economies. In purchasing
power terms, all four BRICs are included in the top 10—with China
and India being the largest (The Economist, 2006) (see Table 1). Over
the next few years, development of the BRICs (and in particular,
industrialization in China and India) could push the world growth
rate above 4% (Wilson et al, 2004).
The 'rise' of Russia, India, and China is better thought of as
'return,' as these economies have traditionally accounted for a large
proportion of world population and output. Today, China's
economy is driven by manufacturing, India's by services, Russia
and Brazil by primary commodities (Brazil has fallen behind the
others—despite rapid growth prior to 1980—it has not lived up to
Goldman Sach's predictions). Tables 2 and 3 present BRIC growth
projections and economic profiles and in doing so reveal some of the
enormous diversity and disparity that exists between the BRIC
economies. Commonalities are fewer, but include: network-oriented
business systems, inequalities (each is clearly split by ethnic, social or
geographic divides in terms of opportunities for wealth); corruption
and collusive forms of business (including government); and a need to
increase total factor productivity by shifting to higher value-adding
Joanna Scott-Kennet and Asta Satmi 145
TABLE 1. BRIC Rankings 2006
Brazil Russia India China
GDP(ppp) 10 9 4 2
GDP 10 11 13 4
Population 6 9 2 1
Labor force 5 6 2 1
Internet users 11 12 4 2
Oil consumption* 9 5 5 2
Electricity consumption 9 4 5 2
Military Expenditure (market exchange rates) 14 7 10 4
Exports 22 13 29 3
Imports 27 18 17 3
Forex & gold reserves 10 3 6 1
External debt 26 20 28 18
People living with HlV/AIDs 15 13 2 14
Human Development Index 69 65 126 81
Corruption Perception Index 70 121 70 70
Life Expectancy 92 137 139 82
Economic Freedom Index 70 120 104 119
Sources: www.worldfactbook.org, www.hdr.undp.org, www.heritage.org, www.transparency.org, www.
un.org/esa, and www.imf.org.
* Figures for China and Russia are for 2005, and India for 2004.
TABLE 2. BRIC GDP Projections to 2020
Country
Brazil
Russia
India '
China
United
States
Projected US$ GDP
(US$bn 2005)
2010
916
1200
1129
3450
14215
2015
1295
1702
1680
5539
15838
2020
1803
2326
2455
8176
17582
Projected US$ GDP
per Capita (US$
2005)
2010
4685
8523
977
2560
45979
2015
6347
12352
1369
3975
49095
2020
8523
17305
1893
5715
52323
Projected Real GDP
Growth (%
2005-
2010
4.0
4.5
6.2
7.6
2.8
2010-
2015
4.0
3.4
5.7
6.0
2.2
YOY)
2015-
2020
3.7
2.9
5.5
5.0
2.1
Source: Adapted from O'Neill, et al., 2005, pp. 20-21.
146 JOURNAL OF TEA CHING IN INTERNA TIONAL BUSINESS
TABLE 3. Economic Profile of the BRIC Countries
Economic
reform
Economic
Growtii
Reai GDP
Growth Rate
2006*
Composition
of GDP 2006
(2005 for
india)*
Comparative
Advantage
(industry)
Strengtiis
Weai