The buzz continues on emerging multinationals. BusinessWeek’s most recent cover story says home-grown companies from countries such as Brazil, Russia, India, Egypt, and South Africa are successfully making inroads in international trade in every imaginable sector, from aircraft to farm equipment to refrigerators to telecoms. Companies such as Brazilian aircraft manufacturer Embraer – an IFC portfolio company –- are changing the rules of the game. How were firms from developing countries able to develop such an edge?
To survive in their own unprotected economies they had to beat not only local competition but the Western multinationals. And that meant making profits at prices that Europe and the U.S. would find unthinkable. And when the best of these innovative companies bought cheap assets from their retreating Western competition, they went after opportunities throughout the developing world. World Bank Group estimates say south-south corporate investment more than tripled to $47 billion in the period 1995-2003. Currently it is probably closer to $60 billion.