Leading Across New Borders: How to Succeed as the Center Shifts

Chapter 1The Shifting Center: Emerging Markets Have EmergedWhat Is Changing and Why This Matters

The Future Arrives

The world's economic center is shifting with breathtaking rapidity. The trends are clear, both in the numbers and in the new realities on the ground; the general direction is from west to east and from north to south. This shift in power and influence is not only economic but also demographic, political, and cultural.

China and India

China recently passed the United States to become the world's largest economy defined in terms of gross domestic product (GDP) purchasing power parity. Although this news created only a small blip in the Western business press, it represented a historic milestone that is likely to be followed soon by other landmark events. Calculations based on market exchange rates—a more common yardstick of GDP—indicate that China will surpass the United States to become the world's undisputed economic leader by 2030.

India is also expanding rapidly; current estimates indicate that by 2050, China, the United States, and India will be the top three economies in the world.¹ While China and India still have many rural and comparatively unaltered areas within their borders, their growing industrial and technological prowess as well as their higher ranking among the world's economies signify that they have officially graduated from “emerging” to “emerged.”

Europe's relative economic position is changing simultaneously. Membership in the Group of Seven ...