MOSCOW — Russia, India, Brazil, and China will be able to compete with industrialized nations in five years with developing innovations, Ernst & Young Global experts say.

The intellectual level of specialists in these countries is the key factor in attracting investors to Western Europe, but the market in Central and Eastern European countries has transformed from cheap homemade products to a market with vast potential, according to James S. Turley, Managing Partner of Ernst & Young.

Turley said the same was happening in China, Russia, India, and Brazil, which will evolve into countries with growing innovation trends and will therefore be able to compete with industrialized nations.

According to Ernst & Young research, Europe is still an attractive zone for investment and can compete with the United States and China.

China is a new leader in this area, with its impressive growth and the potential of its domestic market being attractive for a series of foreign investors, the company said.

In terms of foreign investment, China as a country ranks first, and third as a geographic region. Within twelve months, China's rating grew from 37% to 52%, placing it ahead of the United States and Canada (45%).

Among European countries, Russia ranks third in terms of direct investment in car manufacturing.

The investment ratings of European countries were based on the opinions of more than 650 representatives of the international business elite polled by Ernst & Young as part of market research from March-April 2005.

The ratings were also based on the database of The Ernst & Young European Investment Monitor set up in 1997 to track investment activity and develop the region with Oxford Intelligence support.