The recent business outlook survey on Bric economies brought out by KPMG/NTC Economics Ltd is upbeat about the economies of the four countries, namely Brazil, Russia, India and China. In fact, Bric service providers expect continued strong growth of activity over the coming year, according to the survey, whose salient points are: service sector companies remain extremely confident regarding overall business conditions; companies expect to maintain strong growth of activity, new business, revenues and profits; higher revenues and profits are expected to support robust growth of investment in capital; service-sector jobs are set to be created at a marked pace across the BRIC countries and companies anticipate substantial growth of outsourcing. The service providers in these countries continue to remain confident over business prospects in the next 12 months. Positive sentiment was most widespread amongst Indian firms. Service providers are confident that revenues will rise over the coming year, with 61% predicting an increase. Higher new orders, improving market conditions and the introduction of new products were cited as the main factors likely to support growth of revenues.
Volume of new business placed with Bric service providers are expected to rise at a marked pace over the coming year. Growth of new work is anticipated at 58% of companies, while less than 3% forecast a fall. According to a FICCI report, in the past decade, India with its expertise in software and IT-enabled services (ITeS), has emerged as a leading global services sourcing hub.
The Indian IT market pegged at $20 billion accounted for 3.82% of the GDP in 2003-04. Software and service exports from India in 2003-04 totalled $12.5 billion, according to Nasscom and well on its way to earning $50 billion in exports by end 2008.
Employment and outsourcing predicted to rise. Higher workloads are predicted to support a robust pace of job creation across the BRIC nations. Around 37% of service providers anticipate growth of employment, with Russian and Indian firms the most upbeat. However Dmitry Kosyrev, analyst, foreign affairs, RIA Novosti?the Russian news agency, adds a note of caution. He says, ?There is not enough workforce in Russia, and especially no high-class, trained, experienced workforce for key positions. The Russian society is ready to accept by now the need to import blue-collar workforce from anywhere, which, in reality, is the Central Asian republic?and these people do not speak Russian well enough.? Improving the quality of skills is a worry in Russia. Says Kosyrev, ?For the white-collar positions in Russia, we witnessed an attempt to rejuvenate that sector, by washing away the older and more experienced people, who looked like a threat to enterprising youngsters. The result is catastrophic, lowering the quality of business decisions taken daily. So a lot has to change in that regard.? The survey mentions that over half of BRIC service providers forecast annual growth of their total operating costs to accelerate over the next twelve months, citing dearer raw material prices, staff salaries and outsourcing costs. Speaking to FE on the telephone from London, Gomes said: ?Those countries that have commodities such as Brazil and Russia will build up substantial reserves. Africa is the continent to watch out for. India and China shall be doing a lot of business with that continent?even now Indian companies such as TCS, UB are doing a lot of business with South Africa.?
The FICCI report mentions that in Russia, India and China air-travel has gone up. Russian aircraft sector can therefore be revitalised to meet the growth in demand for civilian aircraft in India and China. Brazil can also contribute to this need.