Traveling with a Global MBA – From BRICS to CIVETS

When MBA students study abroad, they often choose emerging markets. Characterized by both their rapid growth and their unfamiliarity to those from established markets, over the last decade they have attracted everyone from multinationals to entrepreneurs. Although not necessarily aligned, emerging markets are often clustered together with creative acronyms. The best known are probably the BRIC countries, an acronymthat may have first appeared in a Goldman Sachs report dating to the early 2000s. The investment giant argued that the emerging markets of Brazil, Russian, India and China  would eventually surpass most current global powerhouses. The report predicted that China and India would dominate goods and services while Brazil and Russia would supply raw materials. An S for South Africa was added in 2013, turning BRIC into BRICS.

Over a decade later, the report’s predictions about BRICS have largely come to pass. China is transitioning to a consumer-orientated economy, while India is on track to become the third-largest economy in the world, behind the US and China (which overtook Japan in 2010). “This year we’ll be taking our MBAs to Maharashtra, so they can explore how inward investment works over there,” notes Harris. “India offers really interesting and unique insights into how a relationship-focused culture underpins the way business is done.”

The University of Edinburgh Business School’sMBA cohorts will grapple with challenges faced by a diverse range of firms in the country. “Our trek will be exploring what it really feels like to be in the midst of a rapidly changing economy, how pharmaceuticals firms CIPLA and Piramal are improving health conditions and fighting disease in the face of extreme poverty, how Godrej Agrovet, an agribusiness company, helps farmers improve productivity and profitability. And we’re tying that with very local developments in the finance industry; and learning how microfinance schemes are supporting growth in the rural economy.”

Despite numerous encouraging developments, outside investors focusing on India’s growing consumer class and abundance of inexpensive labor are encountering unique obstacles. Foreign retailers are required to purchase a third of goods locally. The Wall Street Journal reports that when IKEA attempted to do this, they soon discovered table tops containing dangerous levels of formaldehyde while steel dinner plates leached chemicals into food. The Swedish company worked hard to ensure children were not working for its suppliers while encouraging Indian women to join their labor force. Meanwhile, corporations like Walmart and Carrefour have dropped plans to open supermarkets in the country due partly to issues with red tape; this despite officials claiming, “We have liberalized India as much as possible.”

New groupings of emerging markets have also come to the fore in the BRICS era. Despite improvements in infrastructure, regulation and education in the BRICS, businesses are increasingly looking beyond this core group to a new grouping coined by HSBC: the CIVETS – Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa (sharing a country with BRICS).

Naturally where business goes, global MBA students follow. One of these countries will be familiar to many University of Edinburgh Business School MBAs who’ve joined Harris on his treks.

Colombia is seen as a nation filled with potential. Although suffering from high unemployment and inflation, the third largest economy in South America has enjoyed an annual growth rate averaging 4% since 2001. As the Motley Fool reported in a 2014 article, Colombia scores a 70.7 on the Heritage Foundation’s Index of Economic Freedom, far higher than the regional average of 59.7. It also points to a World Bank study identifying the country as the third best for doing business in Latin America, suggesting that “The Colombian market deserves a new look from investors.”

Although a recent Focus Economics report notes challenges to the nation’s growth rate – connected with slumping oil revenue – for many the C in CIVETS is the place to be.

In 2015, Edinburgh MBAs worked with Colombia’s largest soft drink’s manufacturer, Postobon. The company wanted to diversify by introducing the Heineken beer brand to the country, against competition from SABMiller, which dominates the domestic alcohol market.

“MBA candidates were able to witness first-hand how the country has emerged as a global tourism hotspot,” Harris remembers. “In Bogota they saw how much the city has evolved since the troubles of the 1990s. It’s a place where arts and culture are flourishing, but where poverty, crime and pollution still present significant challenges.”

“Study-abroad programs are nothing new – and they’re usually fantastic fun,” Harris notes. “But typically they offer very little in the way of building students’ capabilities and resourcefulness in a meaningful way.”

The business school’s approach to providing candidates with a taste of international business in context, Harris argues, is built around the idea of experiential learning.  Edinburgh MBAs who study abroad, he believes,are graduating with unique insights into doing business in another country.

“The real strength of how we approach international business is that we tie it into the fundamentals of MBA learning – and MBA doing. Having faced challenges in one country, we know from research that the graduates’ ability to do this in another country will be enhanced. Experiential learning builds the essential ‘how-to’ knowledge MBAs can carry with them into their careers, not just the ‘what’ knowledge which is specific to a time or place.

“General guides and handbooks are no substitute for the kind of on-the-ground learning we do by organizing treks to other cultures and economies.”

This article is sponsored by the University of Edinburgh Business School.