Povl Tiedemann, Head of Department, Danish Business Economists
23 July 2007.
Competitiveness Roadmap, 2007–2050
As member of the Input Panel for the IMD World Competitiveness Yearbook, Danish Business Economists are granted access to the very first analysis results. The following 3 observations from the Competitiveness Roadmap have been chosen for commenting – all of which are among the 6 issues expected to have highest impact on the world competitiveness landscape during the next four decades. The remaining 3 issues not commented are “Real estate bubble bursts” – ”Financial systems not up to par in Asia” – “Pension system in China at risk”.
Emergence of a new Middle Class. The emergence of a middle class in Asia, Central Europe and Latin America changes the nature of the world economy. 600 million people have reached this status over the past 6 years, spending on average 4.000 billion USD a year on housing and consumer goods (even luxury goods). This new middle class is expected to double in size every 7 years.
-Information of great interest for
suppliers from the “old economies” in Europe, US and Japan to this
market- and demographics segment, with a rapidly increasing purchasing
power and spending initiative. The development is expected to contain
high influence on the competitive landscape towards year 2030.
From cheap Manpower to cheap Brainpower.
The world moves from a competitiveness
model based on cheap manpower to one based on cheap brainpower. In total,
India, China and Russia “produce” each year 14 million university
students, as many as the US. These students quickly become young professinals
eager for success, who are relatively affordable and highly motivated.
Through technology, these brains can be accessed from all over the world.
-Information with a certain competitive interest to us in the “old economies” – and with specific address to our university sector. Check “Winds of change are rattling European universities” on www.deanstalk.net 4 December 2006. The development is expected to contain slightly less influence on the competitive landscape towards year 2030.
Low demography in Europe, Japan and Russia.
The low demography in Europe, Japan and Russia takes its toll on the dynamism of the economy. In 2050, Europe will count 628 million people, having shrunk by more than 100 million in 50 years. Could more lenient immigration policies compensate for this decline, especially for skilled labour?
-Information with absolute demand for
strategic reflection. The development is expected to contain high influence
on the competitive landscape towards year 2050 – however, side effects
may develop even earlier. Reflection should be intensified taking into
consideration that the population during the last 100 years in China
has grown from 400 to 1.200mill. and in India from 250 to 1.000 mill.
During the same period the population in the muslim countries in general
has grown from 150 to 1.200 mill. On top of that we are facing effects
from the so called “youth-accumulations / youth bulges” ref. Professor
Gunnar Heinsohn, University of Bremen.
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