In 2000, 95% of the Fortune Global 500 were headquartered in developed economies. Today, large companies are based in the following cities (in order from most to least): Tokyo, NYC, London, Osaka, Paris, Beijing, Moscow, Seoul, Rhine-Ruhr, Chicago, Hong Kong, Taipei. Three-quarters of the world’s 8000 companies with annual revenues of $1B or more are based in developed economies today.
By 2025, almost half of the world’s biggest companies will be based in emerging markets, and 70% of new ones will come from there. Half of global GDP growth between 2010 and 2025 will come from 440 cities in emerging markets – 95% in small and medium size cities. The world’s population will grow to 9.1 billion by 2050, with virtually all population growth occurring in less developed countries (Source: International Monetary Fund).
China will be home to more large companies than either the US or Europe. Tianjin (city 120 km SE of Beijing) had a GDP in 2010 of $130B…about the size of Stockholm. By 2025, the GDP should be $625B, or the size of all of Sweden! Trade between Africa and China grew from $9B in 2000 to $211B in 2012. However, China’s debt quadrupled (real estate, shadow banking) from $7 trillion in 2007 to $28 trillion by mid-2014. Their government debt is staggering, due to financial bailouts and stimulus programs from crisis, as well as the recession and a weak recovery (Source: McKinsey).
ebay’s CEO, Devin Wenig, wants business initiatives to be led from outside North America: “I continue to believe very strongly in our emerging market opportunities.”
How do emerging markets influence your business model?
