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Switzerland — BRIC countries are both an opportunity and a threat

01 July 2010

The rapid growth of the so-called BRIC countries (Brazil, Russia, India and China) is regarded as both an opportunity and a threat by Swiss small and medium-sized enterprises (SMEs). This is the outcome of the SME Barometer 2010 published today by Ernst & Young Switzerland.

25% of Swiss SMEs see the current economic crisis as a catalyst for developing business relations with BRIC countries. However, 10% can see no advantage in dealing with BRIC countries and regard them as a threat.

34% of the 700 interviewed SMEs already do business with China, 29% with Russia, 26% with India and 25% with Brazil.

Russia is the most important export market (22%) whilst China is the most important production location. 6% of Swiss SMEs have Chinese suppliers whilst 5% have Indian suppliers.

However, the lack of legal security is regarded as a high-risk element for 25% of SMEs and corruption is seen the same way by 20%.

Viktor Bucher, Partner at Ernst & Young, said "to defend your rights before a foreign tribunal is costly and takes a lot of time and you never know what the outcome will be. Very few SMEs have the necessary resources for such situations."

The violation of patent rights is normal currency in BRIC countries. On top of this, 34% of interviewed SMEs said that business relations with Russia have suffered from wide spread corruption.

Pierre-Alain Cardinaux, Partner at Ernst & Young, said "you cannot yet trust the legal and political framework in these countries. Doing business with BRIC countries must be part of a global strategy. For the time being, European countries, in particular Germany and France, remain the main business partners for Swiss SMEs but BRIC countries are gaining considerable ground.

To read the full report in French language please click here



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