Economic Development in the World
Countries that experience rapid growth and development with lower per-capita incomes and capital markets that are less mature than those in developed countries are called emerging markets. Examples of emerging markets are the BRIC countries (Brazil, Russia, India, and China) and GIPSI countries (Greece, Ireland, Portugal, Spain, and Italy). Marketing in an emerging country market is likely to be more challenging than in a developed market since marketers often face political instability, less advanced communications technology, and consumers with less disposable income. Read this chapter to learn more about developed, developing, and emerging economies.
Summary
This chapter outlines how businesses and economists evaluate world economies. Then, the remaining sections review what developed and developing worlds are and how they differ, as well as explain how to evaluate the expanding set of emerging-market countries, which started with the BRIC countries (i.e., Brazil, Russia, India, and China) and has now expanded to include twenty-eight countries. Effective global managers need to be able to identify the markets that offer the best opportunities for their products and services. Additionally, managers need to monitor these emerging markets for new local companies that take advantage of business conditions to become global competitors.
Countries can be categorized in terms of their stage of economic development: low income, lower middle income, upper middle income, and high income. Gross domestic product (GDP) and gross national income (GNI) are commonly used measures of economic development. The 50 poorest countries in the low-income category are sometimes referred to as least-developed countries (LDCs). Upper middle-income countries with high growth are often called newly industrializing economies (NIEs). Several of the world's economies are notable for their fast growth; the BRIC nations include Brazil, Russia, India, and China. The Group of Seven (G7), Group of Eight (G-8), and Organization for Economic Cooperation and Development (OECD) represent efforts by high-income nations to promote democratic ideals and free-market policies throughout the rest of the world. Most of the world's income is located in the Triad, which is comprised of Japan, the United States, and Western Europe. Companies with global aspirations generally have operations in all three areas. Market potential for a product can be evaluated by determining product saturation levels in light of income levels.
Source: Babu John Mariadoss, https://opentext.wsu.edu/cpim/chapter/chapter-5-economic-development-in-the-world/
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