Risk to the technology industry in BRIC – Where should your company invest in 2013?

Undoubtedly, the BRIC countries (Brazil, Russia, India and China) – the four largest emerging economies in the world have four major economic and investment potentials, especially in the technology industry. According to Euromonitor International, if the BRIC countries are able to maintain their current growth rate, the combined economy of these four global power plants could express more in dollars than G6 (Germany, France, Italy, Japan, United Kingdom and the United States) Gross domestic product (GDP) and Personal Disposable Income (PDI) among BRIC nations have exponentially developed over the last decade. This growth has involved a large number of public and private partnerships (PPPs) in each country, so foreign direct investment (FDI) is a great business for all large companies. PPPs are often complex, financially demanding and extremely time-consuming for many years of projects. Nevertheless, they can provide significant benefits to private companies, consumers and national governments on the basis of good economic conditions and good business strategy. Each country can have a different risk and the success of these projects depends to a great extent on how the country is able to deal with such risks and minimize project interruption. Our study examines the comparative risk, opportunities, general economic situation, comparative market potential and structure of each BRIC country, and finally proposes which country to invest in the technology sector.


is the Economist Intelligence Unit, Brazil currently has a "BBB" score in its national risk assessment. This value is referred to as "investment status", according to which Brazil is a lower moderate risk country, depending on the agency's rating. Brazil is abundant in natural resources such as quartz, diamond, chrome, iron ore, oil, mica, graphite, titanium, copper, gold, oil, bauxite, zinc, tin and Bloomberg Media, according to mercury, said: "Its natural wealth has since led to 200 million people on the world's top level. Brazil's economy has risen to the world's largest, from 1980 to 16, to six times today." Brazil's big debt and economic shortages in the 1990s the private investment in the various industries was facilitated in the years and the Brazilian privatization program between 1990 and 2002 was estimated at 105 billion in national revenues and investment opportunities, especially in technology-driven telecommunications sectors, representing 31% of this movement.

The reports on Brazil's economic future have changed widely. Brazil's economic outlook is fairly positive, the Wall Street Journal has recently reported downward downward revision of Standard & Poor's "negative" outlook on "stable" in Brazil's perspective. "According to the Economist Intelligence Unit," the long-term growth forecast for the next 19 years (3.8%) expects faster average annual GDP growth than in the past 25 years (2.8%). Improving infrastructure and education, expanding trade, wider presence of multinational companies, reducing debt service burdens, and developing huge oil stocks in Brazil can reduce slower labor growth and maintain a 2.7% increase in labor productivity growth. "

Current political focus in Brazil will change rapidly in next year's general elections Dilma Rousseff (Left Party Partido dos Trabalhadores), who became the first female president of the nation's country in 2010, President Rousseff continues to be extremely popular with corruption scandals, despite the weak economic growth and the re-launch of inflation, in particular because unemployment is down by 5.8% compared to historical trends, stable compared to other BRIC countries. "The campaign for the October 2014 elections in Brazil has already begun, Pr Dilma Rousseff's popularity helped to reduce the power of sensitive reforms and contaminate the political environment, "says Economist Intelligence Unit. In addition, President Rousseff ranked Forbes as the # 2 most powerful woman in the world. Many international investors are attracting Brazil to a stable political economic and economic environment, but face very high levels of red tape, taxes, crime and corruption, which are typically far greater than their own markets.

The Brazilian economy is slowly recovering from the 2011-12 fall, but Brazil's potential growth rate is much lower in 2004-10 when it grew by 4.5% a year. According to the Economist Intelligence Unit, the financial services sector will rise above the total exchange rate, but credit growth is slowing down and loans have risen more than doubled since 2003, up from 53% in February 2013. "[19659002]" With regard to financial risk, the Brazilian financial system is exposed to the effects of volatile international markets, particularly commodities and capital. Over the past decade, Brazilian financial sector assets have doubled, in particular due to the expansion of securities and derivatives markets

According to the Economist Intelligence Unit, "It is estimated that 195 million people and GDP are $ 2.3 dollars in 2012, Brazil has the largest financial services market in Latin America, while income and wealth are still very focused. the continued trend in formalizing labor force will support financial deepening. Increasing incomes will increase demand for financial services but Brazil's labor market dynamics will be less favorable than in the previous decade. "

Some economists have suggested that Braz According to the IMF's Monetary and Capital Market Department, the ratio of gross government debt continues to be the ratio of gross government debt, according to the IMF Monetary and Capital Markets division. "The rapid credit expansion of recent years has supported domestic economic growth and wider financial inclusions, but it can also cause weaknesses." a series of additional infrastructure developments, the growing population, abundant natural resources, and the upcoming 2014 World Cup and the 2016 expected Olympic investment promise that Brazil will remain the highest culmination in global financial strategies in the coming years

Intelligence Unit, Based on the industry's average industry risk rating, in Brazil, in 2013, 43.5 points were achieved. In order to examine risk and return, we match this with the Business Environment Score of Economic Intelligence Units. On scale 1-10 we adsorb this to 10, for comparison, this article; Brazil receives 66.9, which is an excellent opportunity for the technology sector.


According to data compiled by the Economist Intelligence Unit, Russia currently has a "C" value (54 points) in its overall risk assessment. Based on this assessment, Russia is investing in a relatively risky country. Such risks include "opaque and corrupt administration, excessive reliance on trade in goods and poorly functioning justice".

political risk, Russia has reached "C" (55 points) according to the Economist Intelligence Unit. President Vladimir Putin, however, has protested numerous protests; the country does not flourish as in the decades after the Cold War. Obviously, the government is already intervening in the economy and thus interrupting the middle class job-seeker. According to the Economist Intelligence Unit, "there are signs that disillusionment between the average Russians". In the absence of potential political stability, investors and other countries do not want to pursue their business with Russia.

With respect to financial risks, Russia reached "C" (58 points), according to Economist Intelligence, Unity. Russia does not play a major role in government in the banking sector; so it was difficult to implement any reform for the bakery industry. In addition, there is uncertainty about the position of the banking system and the regulation and supervision of the government. If investors and business partners do not trust the central bank of the country, there are many problems for the country. Access to external finance and the weakened ruble certainly does not attract companies to engage in business in Russia

Like Russia, like the rest of the world, the economic crisis has had ripple impact on the global market. GDP fell by 7.8% in 2009, which affected the country in many respects. Russia experienced a decline in the external demand of various commodities. While the economy and GDP fluctuated in the next few years, Russia has still not considered it a favorable country to partially invest in uncertainty about the political sector and lack of government confidence and financial stability.

Russia has reached 52,475 average risks in the technology sector, while the country has made 58.6 in the business environment. This combination of higher risk and lower chances makes Russia the most unfavorable country in the BRIC for technological investments based on current economic and risk factors.


The Economist Business Intelligence Unit estimates that real GDP growth on a spending basis has slowed to 3.4% in 2012/13. "Business Intelligence believes that India's economy it was low. The country is currently at a low level in the economic cycle, with the slowest growth in the last ten months of March 2013. However, this is good news for the country's future investments as recent economic reforms, lower interest rates and wholesale price increases are expected to result in real GDP growth of 6.2% by the end of 2014.

From this point, by 2030, India is predicting a hot bed for economic growth, which is an excellent target for global investment. India is expected to grow by an average 6.4% over the 2012-2030 period, so the country is at this time the world's fastest growing economy. With this growth, however, India faces new challenges that can be a cause for concern. India leaves more out of external investment as it continues to open up its economy. This could be a risk factor for the country since it was a closed economy and has enjoyed protection since the 2008-2009 economic downturn. With new global investments, this protection will no longer be so strong as from external influences. It is also a concern that foreign investment has been slowing down recently, as investors expect political instability.

India's relatively healthy debt-to-GDP ratio is 45 to 48 years due to the country's sovereign risk in the 12 months prior to June 2013. The country has a low non-performing loan (NPL) ratio and enjoys the risk of the banking sector in 49-51 such periods. Although the country complies with the international criteria for determining NPL, this figure would be higher. The currency has gone up from 44 to 47 in the past 12 months, following economic reforms following India's fiscal and trade shortages and high inflation

In addition to its new need for Indian capital inflow, the country has been subject to political strikes in the past three years around. The country has also lost many key Western allies as speculation is rising that the Congress calls early elections by the end of 2014 as early elections. This political risk ignores short-term investment until the political failure surrounding the election can be determined.

As the country has a lower risk rating and an excellent economic growth forecast, the technology sector must continue to grow to continue growth. India's technology sector is at an average of 52.6, probably due to the saturation of US IT services. As Indian providers seek added value and take advantage of cloud computing, they should look for customers outside the US, which is not an easy task, especially considering that 9% of the 55 Asian companies listed are among the top 500 global outsourcing strategy. By aggravating the business environment weighted by 60.4 countries, India is ranked third among BRIC's investment targets.


China's economy is the second largest and most important source of revenue for most multinational companies. Growth in Brazil and India has increased and the economy is expected to grow by 7.8% in 2014. Closer labor markets and supportive government policies are expected to hold rapid income growth in the next two years

not expected, significant fiscal changes may occur at the end of 2013, and in the meantime, authorities tightened monetary policy. While the economic growth rate is downward, real GDP growth in 2013 is expected to be 8.5%.

The extent of government intervention remains a worrying factor, though the private sector is increasingly important. Demand for domestic goods is expected to grow faster than its export markets. Although the government has reduced the barriers to trafficking in human beings to further boost imports, it remains difficult to access certain sectors

Chinese leaders continue to seek sustainable economic growth and sustained political control. In the past, the emphasis on economic development is now being altered along with social priorities. Another challenge facing the government is to rebalance the economy, which depends on a high level of investment expenditure. Increasing income will gradually increase domestic consumption's contribution to economic growth, but war will be difficult to reform (especially in the financial sector)

China's business environment will be more favorable in the future, the Economist Intelligence Unit's business environment ranking model in order to improve. The biggest developments are in categories that benefit the government's financial sector reform and capital saving efforts, but many other categories continue to misjudge global and regional standards. The dangers of China's political stability remain in the political environment. The only category for which the country's scores deteriorate are macroeconomic conditions. The massive size and rapid growth of its economy means that China can boast of the highest scores in the world compared to market opportunities.

Although they go through economic and social changes that endanger political stability, their security risks are rather low and the overall business risk in China is moderate or high. Popular dissatisfaction has increased due to increasing subsistence, income disparities, urban unemployment, ground attacks and corruption. Major reforms to address such issues seem unlikely as the Chinese Communist Party remains in power for the foreseeable future. National standards are lacking, regulatory consistency is weak, enforcement is weak and political intervention is high in legal and regulatory risks. For this reason, foreign-invested companies do not dispute domestic courts if they can opt for international arbitration.

Financial sector reform has accelerated, Chinese banking and capital markets are immature, but companies with foreign investment generally have good access to credit.

Infrastructure is rapidly evolving and has reached advanced standards in some parts of the country. Mobile telecommunications is widespread. Internet penetration is high for the developing nation. Air transport networks are well developed and the logistics sector is growing rapidly

China has excellent prospects for comparing risks and opportunities. In view of the average technology industry risk of 44.9 compared to the 64.4 business environment, China seems to be an excellent option as shown in the bubble diagram following the link shown at the end of this article. In addition to large disposable income, China has a tremendous growth potential


Based on research on economic opportunities in the BRIC countries and the political and economic risk of entering each country, Brazil is currently showing the strongest potential for companies wishing to invest in the technology industry. Although good growth is expected in India, the average is 6.2% by 2030, while the technology sector is saturated. In the US, information outsourcing services have been brought back to shoring, while Asian companies largely keep their information services in-house. This, coupled with short-term political uncertainty, results in a higher risk investment for India. There are still opportunities in India that are beyond doubt; but this was not the most favorable BRIC country. Russia was the least favorable country based on business opportunities and risk factors; so we can stop investing in Russia. In the meantime, China offers excellent opportunities and risk ratings as well as a large and growing economy. However, there are no excellent systems in China to protect patents. In fact, China is dealing with one of the worst policies and implementation of the BRIC counties as this applies to technology and making any technological investment difficult to make.

While China has a large economy and favorable economic and risk indicators China has a higher comparable risk compared to Brazil and the lower business environment than Brazil, investment in Brazil is more likely to be in 2013. Brazil maintains the largest business opportunity considering the risk of any of the BRIC countries in the bubble table, which is located at the end of the article, following the Bubble Chart link at the end of the article. The projected growth in Brazil, due to the low risk compared to the other BRIC countries and the stabilizing political environment, suggests we are encouraged to invest in Brazil's growing technology industry. There will be bureaucratic processes for navigation, but excellent technological growth and the potential for minimal risk to other BRIC countries are an excellent investment objective


Source by sbobet

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