"The BRICS Will Surpass the West."
Not so fast. Yes, the BRICS will remain the main source of growth in tomorrow's world, as they already are today. Together they will dominate the global economy later this century the way Europe and the United States once did.
Just as the pendulum swung far toward the BRICS but then swung back hard in recent years, there are signs of new forms of BRICS competitiveness. Research and development in the BRICS is paving the way for increasingly high-value-added production. Ninety-one percent of U.S. plants are more than a decade old, versus only 43 percent of China's plants, according to a 2007 IndustryWeek survey. While 54 percent of Chinese companies cited innovation as one of their top objectives in the survey, only 27 percent of U.S. respondents did. Chinese telecom equipment-makers are giving more traditional players a run for their money, Indian-made generic drugs are making inroads, Brazilian protein producers dominate world markets, and Russian oligarchs are making smart investments abroad. The BRICS are going through a rough patch right now, yet they're poised for a roaring comeback.
But though the era of American or Western domination may be over, BRICS domination is still some time off. What is already a fact is that the clear delineation between developed and "backward" countries is a thing of the past. Western multinational companies are seeking to expand in the BRICS as growth in their home markets has dried up. Chinese and Indian corporations are building their brands in other emerging markets and the West. More than ever, developed countries' economic fates are tied to those of emerging markets.
Intellectual property remains a strong suit of advanced economies. The United States, Japan, and Germany -- just three advanced economies -- accounted for 58 percent of patent filings in 2011, according to the World Intellectual Property Organization. But even here the BRICS are catching up: China's applications soared 33 percent in 2011, Russia's filings were up 21 percent, Brazil's 17 percent, and India's 11 percent. Compare that with 8 percent growth for the United States and 6 percent for Germany. Chinese telecommunications equipment giant ZTE Corp. dislodged Japan's Panasonic from the global top spot with 2,826 patent applications. China's Huawei Technologies was in third place, while a previous American leader, Qualcomm, dropped from third to sixth place in 2011. Why does it matter? Because patents are a key indicator of future economic strength.
TEH ENG KOON/AFP/Getty Images
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