“Why is the world economy not doing better? Have things gone wrong because the politicians have failed?” asked Gordon Brown, Prime Minister of the United Kingdom from 2007 to 2010, at the most recent World Business Forum in New York. America and Europe no longer have most of the world’s economic power. The emerging markets and the developing world now hold that position, causing great economic turmoil as we adjust to the transition.
The United States, followed by Europe, used to have the majority of the world’s consumer spending power; now with that spending power being dispersed worldwide, companies are reorienting their strategies to Asia, Latin America, and, in time, to Africa. “This is part of the huge social transformation that is going to dominate the rest of our lives. It is the growth of a global middle class,” said Brown.
The last stage in this revolution will be in the distribution of income and wealth around the world. In 30 or 40 years the balance of income, wealth, manufacturing power and consumer spending power is going to reflect the population of the world and the sizes of different countries. This does not mean the US will become marginalized. Brown believes the world economy will double in size, and in that are opportunities for the countries and companies that are the most innovative.
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