1. Growing Economies
4.1 Globalisation

2. What you need to know
a) Growth rate of the UK economy compared to emerging
economies
b) Growing economic power of countries within Asia, Africa
and other parts of the world
c) Implications of economic growth for individuals and businesses:
trade opportunities for businesses
employment patterns
d) Indicators of growth:
Gross Domestic Product (GDP) per capita
literacy
health
Human Development Index (HDI)

3. What is an “Emerging Economy”?
“Emerging economy” is used to describe an economy in the process of ______________________and ________________

4. Common Features of Emerging Economies
Economies making a transition
Rapid industrialisation (i.e. development of secondary & tertiary sectors)
Have potential to become _____________ economies
Faster long-term ___________ _____________than most developed economies
Many inhabitants still in ___________, though economic growth is taking many out of poverty
Businesses struggle to access ___________ ______________(e.g. trade barriers)

5. Emerging economies have achieved significantly higher economic growth rates in recent years

6. The Four Classic Original Emerging Economies? ? ? ?

7. What Happened to the BRICs
BRICs = Brazil, Russia, India & China
Research by Jim O’Neill (Goldman Sachs) 15 years ago highlighted the prominent rise of four ________________ markets
Particularly significant for developed economies – because of their _______and ___________ rate
Brazil has since entered a prolonged recession (as did Russia)
China has now become the world’s ____________economy and in many respects is now a ____________ economy

8. Perceived Business Threats from Emerging Economies
Increasingly large pool of _____________, but ___________ labour
_____________ currencies make their exports cheaper
_____________ protection of brand and other intellectual property
State ____________ of industries to make them more ______________ globally

9. Business Opportunities in Emerging Economies
Growing numbers of educated middle class consumers - = growing consumer ___________
Cultural shifts – e.g. higher demand for personal products, private education & _____________
Demand for ________________and other products & services from developed economies
Source of high-skilled but low-cost labour (_____________ / off_________)
Great potential for ______________and ac________________s

10. Key risks and threats of doing business in emerging economies
Political ____________
Cultural _______________/ sensitivities
Variable approaches to financial & _________ dealings (e.g. contractual law)
Corruption and _____________still an issue
Emerging markets becoming major exporters
Low-cost production makes developed economies ______________ in some markets

11. Multinationals have led investment into Emerging Economies
Global brands need to operate ___________
By definition they need to be active in fast-_________ emerging economies as well as having established market shares in ____________economies

12. Economic Growth in Emerging Economies Now
Country Groups
2013
2014
2015
2016f
BRICS
5.7
5.1
3.9
4.6
Developing economies
5.3
4.9
4.3
4.8
High-income economies
1.2
1.7
1.6
2.1
Low-income economies
6.4
6.1
6.2
World economy
2.4
2.6
2.9
Regions / Developing Countries
Developing East Asia and Pacific
7.1
6.8
6.3
Developing Europe and Central Asia
2.3
3.0
Developing Latin America and the Caribbean
1.5
-0.7
0.1
Developing Middle East and N. Africa
0.6
2.5
Developing South Asia
7.0
7.3
Developing Sub-Saharan Africa
3.4
4.2
Source: World Bank 2016

13. Fastest Growing Economies in 2016

14. Why Emerging Economies are Likely to Continue to Enjoy High Growth Rates
U________________ process continues
I________________ – especially in East Asia and S Africa
Population ___________
Per ___________ income growth, rise of middle classes and consumer society
Workforce will continue to improve __________ and be more productive
Technological inn____________ in many emerging markets (especially in Korea, China, India)

15. Key Indicators of Economic Growth
GDP (total)
GDP (per capita)
PPP
Literacy
Health

16. GDP per Capita for Key Economic Regions
Gross domestic product per capita in selected global regions measured at current prices in 2014 (in U.S. dollars)

17. GDP Per Capita and GDP Per Capita (PPP Adjusted)
Central African Republic
320
600
Malawi
350
1,140
Ethiopia
590
1,620
Kenya
1,340
3,060
Bangladesh
1,190
3,550
Sub-Saharan Africa
1,628
3,562
Zambia
1,500
3,660
South Asia
1,533
5,653
Vietnam
1,980
5,690
India
1,590
6,020
South Africa
6,050
12,830
China
7,820
14,160
Brazil
9,850
15,020
World Average
10,437
15,415

18. Share of GDP by Sector by Country (2014)

19. The Human Development Index (HDI)
Since 1990, the United Nations has published an alternative measure of economic development - the ___________________________________(shortened to HDI)

20. Key Points about the HDI
HDI focuses on three key measures of human development:
longevity
basic education
minimal income
The HDI ____________________made by countries in improving these three basic development outcomes
The inclusion of education and health indicators is a sign of successful policies in providing access to health care, sanitation and education

21. The Three Measures used in the HDI
Knowledge: First an educational component made up of two statistics – mean years of schooling and expected years of schooling
Long and healthy life: Second a life expectancy component is calculated using a minimum value for life expectancy of 25 years and maximum value of 85 years
A decent standard of living: The final element is gross national product (GDP per capita adjusted to purchasing power parity standard (PPP)

22. 2015 Human Development Index – Highest Rankings
Human Development Index (HDI)
Life expectancy at birth
Expected years of schooling
Mean years of schooling
Gross national income (GNI) per capita
GNI per capita rank minus HDI rank
Country
Value
(years)
(2011 PPP $)
Norway
0.944
81.6
17.5
12.6
64,992 5
Australia
0.935
82.4
20.2
13.0
42,261 17
Switzerland
0.930
83.0
15.8
12.8
56,431 6
Denmark
0.923
80.2
18.7
12.7
44,025 11
Netherlands
0.922
17.9
11.9
45,435 9
Germany
0.916
80.9
16.5
13.1
43,919
Ireland
18.6
12.2
39,568 16
United States
0.915
79.1
12.9
52,947 3
Canada
0.913
82.0
15.9
42,155
New Zealand
81.8
19.2
12.5
32,689 23
Singapore
0.912
15.4
10.6
76,628 -7
Hong Kong, China (SAR)
0.910
84.0
15.6
11.2
53,959 -2
Liechtenstein
0.908
80.0
15.0
11.8
79,851
-10
Sweden
0.907
82.2
12.1
45,636 -1
United Kingdom
80.7
16.2
39,267
Iceland
0.899
82.6
19.0
35,182 12
Korea (Republic of)
0.898
81.9
16.9
33,890 13

23. Countries with lowest HDI ranking in 2015
Human Development Index (HDI)
Life expectancy at birth
Expected years of schooling
Mean years of schooling
Gross national income (GNI) per capita
GNI per capita rank minus HDI rank
Country
Value
(years)
(2011 PPP $)
Côte d'Ivoire
0.462
51.5
8.9
4.3
3,171
-24
Malawi
0.445
62.8
10.8
747 13
Ethiopia
0.442
64.1
8.5
2.4
1,428 2
Gambia
0.441
60.2
8.8
2.8
1,507 -2
DRC
0.433
58.7
9.8
6.0
680 11
Liberia
0.430
60.9
9.5
4.1
805 7
Guinea-Bissau
0.420
55.2
9.0
1,362 -1
Mali
0.419
58.0
8.4
2.0
1,583 -8
Mozambique
0.416
55.1
9.3
3.2
1,123 1
Sierra Leone
0.413
50.9
8.6
3.1
1,780
-16
Guinea
0.411
58.8
8.7
1,096
Burkina Faso
0.402
7.8
1.4
1,591
-13
Burundi
0.400
56.7
10.1
2.7
758
Chad
0.392
51.6
7.4
1.9
2,085
-22
Eritrea
0.391
63.7
3.9
1,130 -6
Central African Republic
0.350
50.7
7.2
4.2
581
Niger
0.348
61.4
5.4
1.5
908 -5

24. Limitations of the HDI
The standard HDI measure does not take into account ________________________________, such as cultural identity and political freedoms (human security, gender opportunities and human rights for example)
The GDP per capita figure – and consequently the HDI figure – takes no account of __________________________.
If income is unevenly distributed, GDP per capita will be an inaccurate measure of people’s monetary well-being
Purchasing power parity (PPP) values used to adjust GDP data change quickly and can be inaccurate or misleading