Brazil, Russia, India and China (Bric) are perceived to be the fastest growing developing economies. According to a study conducted by Goldman Sachs, over the next 50 years, their growth though will slow down, but their aggregate GDP will be higher then the G6 countries. The pre-requisites for the growth of the Bric, the Geoffrey Sachs analysis points out, are macro-economic stability, evolution of strong democratic institutions, education and openness. I believe that there is a fourth dimension to their faster growth and that is digitisation and IT penetration.
Bric countries have a strong manufacturing base. That is truer in the case of Russia and China. Brazil, a moderate free market and export-oriented economy, has a strong industrial base. Automobiles, steel, petrochemicals, aircraft and consumer goods are its core industrial base. Russian expertise as a global industrial force is chiefly due to its predominant position in heavy industry and petrochemicals. China has a strong industrial and digital base. Instead of focusing on software exports, Chinese companies are more serious about wiring their domestic industries. India, though has a strong industrial and agricultural base, its future growth dimensions are heavily logged to the advancements in the ICT sector, particularly in the software segment.
The recently concluded Bric summit in Russia has pushed into the centre stage a shared agenda and concerns. It has underscored the need for a balanced growth and stimulus package to rev up the world economy. Undoubtedly, the concept of Bric is na?ve and one cannot expect any major initiatives to pep the intra-investment, trade and economic cooperation. But it is always useful to evolve a wish list. I have come out with a package of policy measures in the case of development of software cooperation and trade among Bric nations and their joint initiatives for capturing the world software market and ICT.
I feel the forte of Bric in IT could be embedded technology. Brazil, Russia and China have a strong hardware industry. But the software that goes into these products is sourced from outside. India is a major source for software that goes into the hardware equipment, gadgets etc. In the next 20 years or so, it is predicted that hardware will outpace petrochemicals in terms of production and sheer size. It will be advantageous for Bric to form an alliance to upgrade the quality of software and hardware that goes into equipment and gadgets. Such efforts cannot fructify in vacuum. There should be joint research projects commissioned to evolve newer products and concepts, which can have steady marketability in the world market.
India definitely has a cutting edge in case of software. But the Indian approach has to undergo a transformation. IT-enabled services will have a limited application in Bric countries unlike in the US, with which we share a common language. Therefore, Indian expertise should be honed up in technical fields such as software for petrochemicals, shipping, steel, banks, automobiles, aviation etc, which are language neutral. We have to create thought leaders for fructifying these ideations since most of our exports in software are to the US and that too for back office operations. There should be a working committee on software under Bric, which should draw representatives from corporations and research organisations to take stock of software requirements.
Bric as a concept is still in its infancy. There is not much visibility to this concept in the individual countries. For instance, organisations like CII, Ficci, Assocham and Nasscom should increasingly sensitise about Bric and the underlying business opportunities. It is also desirable to have a Bric Chamber of Commerce on the lines of the Asean Chamber or the Saarc Chamber to provide for an umbrella organisation to coordinate business activities. This body should closely examine the emerging opportunities and institutions that are required to tap such potentials. It is also instructive to consider enhancing the scope of Bric by inducting newer countries like South Africa.
India has the advantage of English language, which enabled the country to reap the benefits of the software revolution. Similarly, we should develop such advantages in the case of Chinese, Russian and Latin American languages. More schools of languages should come up and curricula re-oriented to include foreign languages at the university level. We have to introduce these languages widely to have the advantage, the same way we had it in the case of English.
There should be some inbuilt incentives in our export policy to increase exports to Bric countries, particularly for software. We have assigned extreme focus area status to certain destinations and products for exports, such as Latin America, Africa etc. It is desirable to include Bric countries for software exports. It will help us diversify our exports to these destinations and minimise the risk of software-export being mostly US-centric.
The writer is president & MD of Interra Information Technologies