Readiness for a multipolar world

Economic power is shifting to the rapidly developing economies (RDEs) of BRICS (Brazil, Russia, India, China and South Africa) plus a next tier of countries whose economic power and market attractiveness is increasing.  Already some of these, including Saudi Arabia and Turkey are members of the newly inaugurated G20. The result will be an increasingly multipolar market landscape in the next ten to twenty years – one that is already starting to develop. The triad markets of the 1980s (US, Europe, Japan) will no longer drive wealth creation and consumption alone. Companies will also have an influence, with 40 corporations among the largest 100 economic entities in the world.

A key question in this multipolar world will be how these economies work together and independently to create and share value, through international trade and in their domestic markets. The huge potential in BRICS and the next tier of RDEs as per capita income and consumption rises makes these very attractive markets. However, the differences in spending power, consumer needs, resources, cultures and environments mean that extrapolation of what has worked in mature developed markets will not work in these new markets. Companies will require a new approach to innovation, along with a broader portfolio of products, services, business models, knowledge and organizations to succeed and will face competition from the new global challengers.

Questions for business leaders

1. What are your key markets of the future? Which are most attractive?
2. How are the dynamics of value creation and capture changing within these markets of the future?
3. What will you need to do differently to serve these markets successfully? What new capabilities and business models will you need to develop?

The GT Trend Report: Geographic Markets offers views and analysis of potential future markets and a list of the world’s largest economic entities, providing food for thought as you tackle these questions.