The vast, emerging economies of India and China could surpass the ailing West in terms of share of world GDP within the next five years, creating a new, very different world order for managers to contend with.
Research by PricewaterhouseCoopers has argued that, with advanced economies being hit harder by the financial crisis than the large emerging economies, particularly those in China and India, we will start to see a gradual shift in the global centre of gravity, at least in financial and trade terms.
By 2013 the share of emerging economies, on the International Monetary Fund's definition, could rise to just over half of world GDP in purchasing power parity terms, up from 43.7 per cent in 2007.
Its figures are based on analysis of data and projections by the IMF, combined with the firm's own growth projections.
John Hawksworth, head of macroeconomics at PricewaterhouseCoopers LLP, said: "It is striking that such a significant shift in world GDP share from advanced economies to emerging economies could occur within as little as five years, and that by 2013 more than half of world GDP could come from these high growth countries."
Although the U.S would remain in first place, by 2013 its share of world GDP is projected to fall to 18.8 per cent, down from 21.3% in 2007.
China, it argued, could overtake the Euro area and move into second place, while India could nudge ahead of Japan for the first time.
Russia and Africa could move ahead of the UK, it added, with Britain's share of world GDP falling to 2.9 per cent, from the 3.3 per cent recorded in 2007.
Ian Coleman, head of emerging markets at PwC, added: "The analysis provides an interesting insight into how the opportunities for investors from the UK and other advanced economies are likely to change as the emerging economies grow their consumer markets.
"Instead of being viewed predominantly as low-cost manufacturing and offshoring centres by businesses in the advanced economies, the projections indicate they are fast becoming destination markets in themselves," he continued.
The PwC projections echo predictions published by consultancy KPMG in September that argued the West will over the next few decades see an exodus of talent to emerging economies.
Managers, it argued, would need to be prepared for a completely new, international management environment, as the flow of skilled and unskilled labour between the developing and developed economies increased.
