The Emerging Markets Century

From Rags to Riches

Within the next 50 years, the global economy will undergo a sea change, a fundamental shift between the emerging and developed worlds. This transition will include a rise in the middle class in Third World nations. Economic, demographic and political forces will create a “second Industrial Revolution,” tilting the world economy toward emerging markets. These countries will soon emerge as dominant economic forces with combined gross national products (GNPs) that exceed those of the world's mature economies. A Goldman Sachs study found that the economies of Brazil, Russia, China and India alone will become greater than those of the industrialized G7 countries by 2040. The economies of these countries plus the next 11 major emerging markets, will be larger than the G7 by 2030, with a combined gross national product of $41 trillion.

With this macroeconomic shift, the leadership of the world's largest companies also will change. Some emerging corporations already are becoming global leaders in their sectors. Korea's Samsung spent more than "$5 billion (more than Intel) on R&D in 2005, or 9% of its revenues," and won 1,641 U.S. patents that year, ...