The global economy has never seen this before. Emerging economies now produce more than the developed ones, and that change and its implications are visible in Davos.
The number of people attending the World Economic Forum just from the so-called BRIC quartet, Brazil, Russia, India and China, has more than doubled since 2005 to 237, or about 10 percent of the total.
The Western economic model is discredited; the US and Europe are weakened by the crisis, so emerging nations have more influence in talks.
They also offer a new perspective on world issues.
Vineet Nayar is CEO of India’s international IT service champion HCL Technologies;
“I think emerging markets, India and China especially, have to be seen from two perspectives. Number one, they are very large markets by themselves and therefore they would be the reason for market rebanging back into a growth market. So, attractiveness from that point of view. And then there is a diverse innovation that you should watch for.”
Emerging countries challenge the North in many ways, but they are also a new market for Western companies, even the over 1 billion people in the South in poverty. Making them richer makes good economic sense says management advisor Hans-Paul Bürkner;
“Let’s not forget the billions of people living below poverty levels with expectations and hopes, who are ready to work hard to have an acceptable standard of living.”
Internal demand in countries like China is picking up so strongly it has become one of the main drivers of global growth. Companies in Europe should try to adapt their products and services to the markets where most people live.
“One of this crisis’s big lessons is, the cards have been redealt. Look at the figures from last year. A fifteen-point gap betwen China, with 10 percent growth, and Germany, which contracted by five percent. You see that and you know something’s up. Us Europeans are going to have to pull our fingers out,” says analyst Fabrice Seiman.
They are younger, smarter and quicker. Emerging countries are moving the world economy, and also the Davos agenda. They have stormed this alpine fortress and shown us the route we must take to climb out of the crisis.