Many business students study or work in another country as part of their overall academic programs. Often these experiences stimulate a curiosity and lifelong interest in global business. At the Villanova School of Business (Villanova Undergraduate Business Profile), more than half of our undergraduate business students engage in a study abroad or an international internship experience during the course of their time with us. This is something we are proud of.
Yet too few of our students—and those of other B-schools in North America and Europe—take advantage of opportunities to experience the emerging markets of the world, markets that are already important components of the global economy and whose role and influence will continue to grow in the decades to come.
As we near the second decade of the 21st century, the balance of global economic power is shifting toward the developing and emerging regions of the world. By one measure, the developing and emerging world is already producing nearly 50% of global economic output.
The BRIC countries—Brazil, Russia, India, and China—along with the rapidly growing economies of Mexico, Malaysia, Indonesia, and others, are now driving global growth. China is predicted to become the largest economy in the world by 2040, if not sooner. India's economy will soon eclipse that of Japan's. Brazil is a global leader in commodities but also a major contributor in more advanced industries, including regional passenger aircraft (Embraer). Even African countries are becoming more attractive locations for trade and investment, despite continued underdevelopment and social challenges.
The Emerging Markets Century Along with the growing economic power comes a commensurate shift in political influence for large emerging markets, with dramatic consequences for traditional military and strategic alliances. For these reasons, Antoine van Agtmael, who first coined the term "emerging markets," argues the coming century will be "the Emerging Markets Century."
Interestingly, the global economic crisis has not slowed this trend; if anything, it may accelerate it. To be sure, some regions, such as Central and Eastern Europe, are suffering particularly badly from the crisis. But the large emerging markets, notably China and India, continue to experience rapid growth, albeit at a slower pace than in previous years.
Although the World Bank is now predicting that global economic output will decline for the first time in decades, the East Asia and Pacific region, which grew at 8% in 2008, is predicted to expand by 5.3% in 2009. Although China's growth will decline to 6.5% in 2009 (from 9% in 2008) and India's will fall to 4% (from 5.5% in 2008), these are impressive growth figures during a period of global economic downturn. Compare this with GDP declines in 2009 of 6% in the U.S. and as much as 13% in Japan.
As a professor of international management, I can help students understand the emerging markets of the world; for instance, I teach a course on emerging markets at the undergraduate, graduate, and executive levels. But there is nothing like traveling to rural India to observe firsthand not only the infrastructure challenges facing the country but also how the offshoring phenomenon has moved beyond the major cities to touch other parts of the economy, making India a leader in the provision of IT and other services.
Villanova's Global Strategy The same can be said for visiting one of the many electronics or apparel manufacturing plants in southern China to understand why and how that country has become the "workshop of the world." Or talking to a farmer at a sugarcane plantation to learn how, by harnessing a basic agricultural commodity, Brazil has emerged as a global leader in cheap, efficient ethanol production as we in the U.S. stumble in our efforts to harness alternative fuels. Or to witness the struggles of street-corner entrepreneurs around the world, such as those selling nothing more than chewing gum on the major thoroughfares of Mexico City, and appreciate the hardship—and tenacity—of businesspeople in circumstances that are radically different from our own.
At the Villanova School of Business, we have a strategy in place that prioritizes program initiatives among regions of the world. The strategy emphasizes the large emerging markets (BRIC+Mexico) first, followed by the "second tier" developing countries, and then other countries that remain important players in the global economy. In the immersion trips that are an integral part of our executive MBA program (Villanova Executive MBA Profile), our students travel exclusively to emerging markets.
More recently, our business students have formed Business Without Borders, an association modeled on Engineers Without Borders (which, in turn, was inspired by Doctors Without Borders), that is committed to interacting with the developing and emerging countries of the world through service learning and other means. Its first initiative is a rural development project in Kenya with a group of engineers and a local NGO. We are also incorporating international consulting projects into our MBA program that emphasize support to entrepreneurs in emerging markets.
We have a long way to go. But, by putting a stake in the ground and committing ourselves to emerging markets, we believe we are preparing our students for this—and not the previous—century.