Global
Shift in global economic power
On current trends, the aggregate purchasing power of the ‘E7’ emerging economies – Brazil, China, India, Indonesia, Mexico, Russia and Turkey – will overtake that of the G7 by 2030. By 2015, Asia Pacific will have a larger middle class than Europe and North America combined. And the global emerging middle class will represent an annual market of some US$6 trillion by 2021. Such trends and tipping-points mean the traditional way of classifying economies is becoming increasingly irrelevant.
This change is underlined by widening divergences within these
groupings. Italy’s economy has not grown in real terms since 2000, while
Canada’s has expanded by over 30%. China’s economy has tripled in size
while Mexico’s has ‘only’ grown by a third.These huge economic shifts between countries, and within groupings, are resulting in momentous changes in consumption patterns – which in turn are creating and amplifying key challenges for businesses worldwide. They have to chase a moving target, as consumers evolve differently in various markets faster than ever before. They have to address the needs of ever more diverse – and more demanding – customer segments. And they have to fight off increasingly intense and new competition. It’s no wonder that more than half of the business leaders interviewed in our latest Global CEO Survey are concerned about changes in consumer spending and behaviours, and nearly half of all CEOs are worried about new market entrants.
The ongoing rebalancing of global economic power also brings major implications for investments in infrastructure. Worldwide, we estimate that annual spending on infrastructure will grow from US$4 trillion in 2012 to more than US$9 trillion by 2025 – with a total of close to US$78 trillion expected to be spent globally between 2014 and 2025. The Asia Pacific market, driven by China’s growth, will represent nearly 60% of global infrastructure spending by 2025. In contrast, Western Europe’s share will shrink to less than 10% from twice as much just a few years ago.
Such global shifts are remarkable not only for their scale, but also for their sheer speed. As a result, there is no question that in a decade’s time, the global economic landscape will be vastly different from that of today. To begin to understand what that landscape will be, we need a new view of the global economy. Here are four features that we think will become more prominent in the global economy:
- Emerging markets will challenge developed economies in the production of high-end consumer durables.
- Today’s ‘F7’ frontier markets – Bangladesh, Colombia, Morocco, Nigeria, Peru, Philippines and Vietnam – will become tomorrow’s growth markets.
- An expanding pool of highly skilled talent will fuel this emergence, with people from emerging markets increasingly leading global multinationals.
- Developed countries will benefit from ‘re-shoring’ as wage differentials close.
end quote from:
http://www.pwc.com/gx/en/issues/megatrends/shift-in-global-economic-power-silas-yang.html
No comments:
Post a Comment