Ernst & Young study says emerging countries gradually transforming global capitalism. - The economic world has entered a second phase of globalisation and emerging countries are no longer just a destination for European, US or Japanese investment: companies from big emerging countries are also gradually transforming global capitalism. The “Globalisation 2.0” study, just published by Ernst & Young auditors, illustrates how these Indian, Chinese, Brazilian and Russian multinationals are transforming global capitalism and drawing attention to their remarkable but unknown operational and financial performances. Ernst & Young analysed the financial and stock market performances of 66 European, US and Japanese companies, in parallel with 32 firms from 8 emerging countries (the BRIC group: Brazil, Russia, India and China, as well as Saudi Arabia, Mexico, South Korea and Argentina). According to the study: 1) companies from emerging countries now account for 19% of stock market capitalisation spread over 1000 top international companies (December 2007) as opposed to 5% in 2000); 2) out of 1000 of the biggest global stock equity market capitalisations, 221 were from emerging countries in 2007, as opposed to around one hundred in 2000; 3) up to 31 December 2007, 8 groups from emerging countries were among the 20 main market capitalisations; 4) BRIC companies accounted for 53% of these capitalisations alone and 68% of the value of 221 market capitalisations of emerging countries in the top 1000; 5) over five years, the annual rate of growth in turnover of the sample of the group of “emerging countries” is 2.9 times bigger than the sample group of “developed countries”; 6) the average margin of manoeuvre for “emerging countries” studied rose to 25% as opposed to 14% for developed countries; 7) the average net margin for “emerging groups” studies rose to 16% as opposed to 8% for “developed countries”; 8) increase in the group of developing countries' values, as quoted on the stock market, is on average 2.5 times higher than that for developed countries (2.2 times higher over a five year period).

The buyout of IBM by the Chinese Levono company or the more recent acquisition by the Indian car group, Tata Motors of the emblematic British brands, Jaguar and Land Rover have made their mark. Ernst & Young said that these are only the first sign of a trend that will only increase in the next few years. The consultants is, however, not displaying any alarm: many European groups are involved in an increasingly strong dynamic present in all markets. The increasing power and internationalisation of emerging “champions” represents a source of opportunity for western countries capable of making their countries sufficiently attractive for foreign investors wherever they come from.