SA scores for growth in 2050 study
Return to the 'historical norm'By 2020, China is expected to pass the US as the largest economy in the world, while India could also overtake the US economy, in purchasing power parity terms, by 2050. The report finds that, even when looking at GDP growth at market exchange rate rankings, the overtaking process is slower, but still inexorable: the Chinese economy would still be likely to be larger than that of the US before 2035, and the E7 would overtake the G7 before 2040. In addition, India would be clearly the third-largest economy in the world by 2050, well ahead of Japan and not too far behind the US. "In many ways this renewed dominance of China and India, with their much larger populations, is a return to the historical norm prior to the Industrial Revolution of the late 18th and 19th centuries that caused a shift in global economic power to Western Europe and the US – this temporary shift in power is now going into reverse," said one of the report's authors, PriceWaterhouseCoopers economist John Hawksworth.
Challenges, opportunities for businessAccording to "The World in 2050", this changing world order poses both challenges and opportunities for businesses in the current advanced economies. "On the one hand, competition from emerging market multinationals will increase steadily over time and the latter will move up the value chain in manufacturing and some services, including financial services given the weakness of the Western banking system after the crisis." At the same time, the report predicts, rapid growth in consumer markets in the major emerging economies, associated with a fast-growing middle class, will provide new opportunities for Western companies that can establish themselves in these markets. "These will be highly competitive, so this is not an easy option – it requires long-term investment – but without it Western companies will increasingly be playing in the slow lane of history if they continue to focus on markets in North America and Western Europe." SAinfo reporter
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