What do the current growth and characteristics of emerging markets show in terms of their future potential?

Question

What will be an ideal response?

Answer 1

Over half of the world’s population lives in emerging economies. Figures for 2009 indicate that 42 per cent of the world population is in BRICs and 14 per cent is in New Frontier economies. Emerging markets all have sizeable working age populations and upcoming young populations who will soon enter the workforce. Meanwhile, economic growth within these markets leads to the increase in the education of the upcoming labour force, thereby providing a source of human talent.

Another important demographic trend in emerging markets is the growing rates of urbanization. Urbanization is another result of economic growth and of the focus on industrialization. As the weight of agriculture is reduced within emerging market economies and more job opportunities are provided with economic growth, urbanization rates of such countries has been increasing rapidly. Growth in urbanization indicates the movement of populations from low income agricultural work to rural-based activities such as higher income industrial jobs. The changing population framework also leads to the increase in demand for infrastructure, housing and services in cities.

Urbanization and income levels in emerging markets also indicate their rising potential as markets in the future. Consumption in emerging markets has been increasing rapidly and this increase is expected to prevail in the future. Trade and investment in emerging markets also shows their rising potential in terms of production and supply of goods into the world economy.