How emerging markets could make this economic recovery different…
How emerging markets could make this economic recovery different…
Segment(s) of the TSC Impacted: All
We all seem to be waiting for the economy to turn around, and many of us have given up hope in a sense. We hear it regularly, including on my blog, “… is this the new normal?”
I think it’s a legitimate question. This recovery, if you can call it that, has been jobless and some would say almost hapless, seeming to be knocked back down by bad news coming from all fronts at all times.
Amidst all the bad news, there was a snippet of good news that could make a big difference when and how things turn around.
The rapid growth of emerging markets
This is something we really have not seen before on the scale that we have now. The impact of this on the employment market could be significant and may be the engine of economic growth that we all need to pull ourselves out of the recession and start adding jobs to the economy.
Take a look at the top 10 rising economies according to the Business Insider from March 2011.
- Nigeria
- India
- Iraq
- Bangladesh
- Vietnam
- Philippines
- Mongolia
- Indonesia
- Sri Lanka
- Egypt
Total projected GDP by 2050: $135.05 Trillion
Average year over year growth: 7.3%
I bet many of you are surprised by at least half of the countries on the list and by at least one country that is missing from the list,China. To be fair, this list is a ranking of year over year growth vs. total GDP or size of the economy, but what I find interesting is that the total GDP that they represent is still significant and when combined, significantly more than China’s.
For comparison, and to bring to light how much GDP is missing with large, still emerging, but “slower” growth economies,China’s GDP is projected to be $123 Trillion by 2040. In 2050, the top 5 countries in the G20 are projected to beChina, US,India,JapanandBrazilin that order, which points to the fact that emerging markets are widespread.
Manufacturing jobs
One of the areas that could see a significant increase in business opportunities are within the manufacturing sector. In many parts of the world, US products are still viewed to be of high quality and value. Just look at China and how American cars are viewed as a luxury item.
One question is how much this will translate to a positive impact on the US job market. Will it create many direct manufacturing jobs or will it create a smaller number of administrative and professional level jobs only because the American product is made overseas?
The other question is whether or not American companies can react quickly enough to get products that appeal to these emerging markets into the hands of their consumers to build and sustain brand loyalty. Fortunately I think we are doing fairly well in this arena, but we cannot be complacent.
Research and development jobs
One area that the US still dominates is research and development. While other countries continue to make progress, fortunately so do we!
These jobs will become more critical as we need to make products that appeal to more and more different markets to maintain market share, gain competitive advantage and continue to build brand loyalty.
So these jobs will include many of the areas that immediately come to mind (software, consumer electronics, etc.) and many that do not immediately come to mind (food products, beverages, home goods, consumer products, etc.)
Shipping/transportation and logistics jobs
Always an early indicator of a economy reviving, we could see growth here early on as companies ship more products to new markets, demand for individuals within these areas would naturally follow.
Import/Export jobs
If theUS is able to position its products to appeal to these emerging markets, demand for Import and Export Professionals could increase significantly, with the Import side depending on what products these emerging economies produce and whether or not Americans will have a need for them…
The economy in general
While the segments I spoke about will likely see a significant increase, trade and wealth generation (even in emerging economies) create jobs. So many other sectors of the economy will see some increase in job growth.
Conclusion
I think we all agree that this economy has some way to go before everyone is back to work, but this could be the light at the end of the tunnel.
Part of the challenge we have now is that we cannot rely on domestic consumer spending to pull the economy out of recession because all of us have spending constraints compared to 5 years ago.
A real possibility is the increase in consumer spending coming from overseas, with emerging markets, notEuropeleading the way and established Asian economies following closely behind. If that creates enough growth for theUSconsumer to feel confident again, we could see a very robust, but different, economic recovery than those of the past.
And of course that all means, the war for talent returns… this time, with some new fronts!
Feel free to share your thoughts!
© 2011 Michael K. Peterson, All Rights Reserved
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