Which are the great economies of the world?
That's easy enough--think North America,
Western Europe and Japan, because the three
areas together claim roughly 80 percent of the
world's wealth. But do you know which economies will top
the list 30 years from now?
Jeffrey Rosensweig says he does. His theories are detailed in
Winning The Global Game (The Free Press), released last
month. The professor of international business and finance at Emory
University's Goizueta Business School in Atlanta explains the
reasoning behind his ranking of the 21st century's so-called
"Big Six"--The Americas, China, Europe, India, Japan
and ASEAN, the Association of Southeast Asian Nations. "The
traditional triad [of North America, Western Europe and Japan] is a
good market," Rosensweig says. "But the real excitement
as we move into the 21st century will be the emerging
markets."
Rosensweig is confident of his predictions despite the recent
economic turmoil in numerous developing Asian nations. "The
effects will last a few years, but by 2005, [Asia's] going to
be an industrial and exporting powerhouse. It will have recovered
fully," he predicts.
Content Continues Below
Probably the foremost trend driving Rosensweig's economic
model is the banding together of the once-separate nations of the
traditional triad to form larger regional economies. For instance,
Rosensweig expects renewed momentum toward a "free trade area
of the Americas" to occur sometime in the next decade, which
would link Latin America to North America. And he says Western
Europe is sure to expand and embrace the key economies of Eastern
Europe. According to his theory of progression, such economic
integration is the logical next step for these powerful
economies.
Rosensweig's formula for selecting the future top economies
is based on three distinct elements, the first being a huge
population. Consider India and China, two economies in
Rosensweig's Big Six: India's population numbers 980
million to date and is increasing at a staggering 18 million people
per year, while China's population tops 1.25 billion. In fact,
Asia as a whole accounts for 59 percent of the world's
population.
The expected emergence of adequate consumer purchasing power and
a track record of solid economic growth are the other two elements
of Rosensweig's formula. As these Big Six economies strengthen,
developing markets will create windfalls of opportunity--especially
to entrepreneurs in infrastructure industries such as
communications, computing, electric power and health care--as the
race to further industrialize their countries moves forward.
"So even if the majority of the population is relatively
poor," says Rosensweig, "I could confidently predict they
would be entering what we would consider to be a kind of lower
middle class in the next decade or so."
It all boils down to a global strategy he describes as
"time-phased." Entrepreneurs seeking future international
success must learn to adjust to the march of time and the changes
it will bring. Prepare now for the fact that the best markets for
entrepreneurs today may be eclipsed by the key emerging markets in
the 21st century. Rosensweig sums it up like this: "Right now,
we're in the Latin American decade, on the road to the Asian
century."