Thursday, March 9

The new world order - China, India and the E7

It seems the G7 has long been the smokey room'd old boy's club of the richest nations on the planet. Whilst swilling on fine whiskey they discuss how to steer the world toward greater democracy and wealth.

Then there was a little group called the E7. Grouped together in a noodle bar, they work out how to develop their countries over a pot of communal tea. Now, representing the world's fastest growing populations and economies, the E7 are stepping out of the rather negative 'developing country' label, they're turning into real competitive economies and dominant on trade routes. And suddenly the world is listening.

News this week highlights that GDP is not really a fair comparison:

"While China's economy is currently 18% the size of the US's in dollar terms, it is 76% as big on a PPP basis.

By 2050, PwC believes, it could be 43% bigger than the US by PPP - although it would still lag when measured in terms of dollar size.

Also on a PPP basis, PwC says the German, UK and French economies could end up smaller than Mexico's economy and similar in size to that of Russia."
Read this in full here

More on the story of how BRICs are set to give G7 a run for its money

The realisation that the E7 may dominate the world is beginning to hit home. The future will be influenced not just by their low-cost production, it will be affected by culture (1 in 5 American will be Hispanic in twenty years time), economies and global populations (1.6b Chinese and over 1b Indians). There are 29 baby Indian's born every minute, and 12m new Chinese added to the planet every year (watch the population clock rise).

According to PWC's recent survey the "Search for New Customers Displaces Cost-Cutting as Impetus for Global Expansion". Smart companies are not blind to where their futures lie. Faced with squeezing a single digit of growth per year in the G7 amidst fierce competition, the home purchasing power of people from China through to Latin America is beginning to shape products in ways it never could before. On and offline businesses have to pay attention to local needs, products made for western tastes just wont do anymore.

In a bordless online world, removing language as a barrier, the national origin of your business matters far less than the quality of your service. The online businesses that can harness not just the English speaking world stand to have true global brands, with global buyers in growing countries.

While you've been reading, 58 new babies were born in India.


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