BRICS to overtake the West?

New research suggests that China‚ India and the rest of the developing world will eclipse the West over the next 50 years.

Business Insider writes that the Organisation for Economic Co-operation and Development’s Looking to 2060 report also forecasts that GDP per capita will tend to converge across countries. As a result‚ by 2060 GDP per capita of the currently poorest economies will more than quadruple‚ whereas it will only double in the richest economies.

“This is the ‘new age of globalisation‚’ says former World Bank chief Bob Zoellick. He says in the Financial Times that developing countries are now the “engines of global growth” and desiring to be “stewards of their own futures”. Zoellick further urges policy makers “to break free of old constraints to connect the private sector to public policies”.

Company finance chiefs are increasingly viewing markets in the BRICS nations in the same light as more established economies‚ such as the US‚ UK and Germany. An International Business Times report notes that a poll by global accountancy network BDO International found that China tops the index of favoured investment destinations‚ with the US‚ Brazil‚ India and Germany rounding out the top five.

The current slowdown in China’s economy is causing jitters at multinational corporations that have grown accustomed to the boom years. Nevertheless‚ Strategy+Business reports that the corporate sector can be confident that China remains a significant source of opportunity for those who adapt their strategies.

Emerging markets guru Antoine van Actmael analyses in Foreign Policy the issue of slowing growth in China – and elsewhere in the developing world – and worries that the next economic crisis might come from within the BRICS. However he concludes that despite facing less lofty growth expectations while satisfying more demanding populations‚ the BRICS do matter.

While he argues that they might no longer be the best place to invest‚ “One way or another‚ these big emerging economies will put their stamp on the 21st century”.

Share your opinion on doing business in the emerging economies.

Extracts from an article by Professor Nick Binedell, GIBS.