The growth potential of emerging economies

Economic power has spinned around countries in Asia and emerging economies, promising to transform them in a few year in the new players of world commerce. The growing economic power of emerging economy countries was driven in the beginning by the intensity of their production processes, together with the low wages paid within their organizations.

Published on June, 2022 Eduardo Garza
The growing importance of technology in the world, as well as the development of Industry 4.0, represent strategic areas of growth for those economies. Digital technology includes a great diversity of digital goods and services, allowing the productive specialization of those countries, giving them a series of comparative advantages.

The economic displacement of the current powers located primarily in North America and Europe toward the emerging economies will continue. By 2030, it is expected that there will be no more powers or hegemonic forces in the economic and commercial order of the world. The potential for growth towards the future will rely on the diversity of social and business that companies will count on.

I. Technology development and adoption. Emerging countries have found a great opportunity to boost their great intensive labor differentiating value in the digital sector. The economic power displacement promises investments in technology productive processes in emerging economies, allowing greater abundance of digital tools and ease of adoption.

II. Competitivity and expansion. Economic power displacement represents the opportunity for organizations to expand the frontiers of their businesses. As of the growing economic power of emerging countries, organizations will now have better incentives and abilities to carry their businesses in a more profitable manner and operating within a new market.

III. Demographic changes. The expectation of growth for emerging countries for the following years is strongly bolstered by the new demography. The increase in the number of inhabitants can be translated in an in a rise in the demand of products and services within the market, representing a clear booster for organizations to improve their processes and increase their operational capacity. As the number of consumers inside the economy grows, the size and value of the market will grow as well.

IV. Qualified human capital. The specialization of human capital stems from the demographic changes in countries, including not only population growth, but movement of people and societies in search of new opportunities. Organizations in these economies can get specialized labor, driving greater efficiency in their productive processes and allowing the expansion of their portfolio of products and services.

Economic power displacement will allow emerging economy countries and their organizations to lead the economic and commercial order of the world. The growth expectations are sparked starting with the differentiating factors of intensive labor and low-cost human capital.

In the following years, a significant rise in population is expected, allowing the creation of a bigger market with new needs. Also, the population growth could be translated in a greater wealth of human capital and availability of specialized labor. Economic leadership of the emerging economies will be reflected in the growing presence and reach of organizations, as well as their products and services around the world.

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