World in 2050:
The world in 2050 will be a rapidly growing world with an average growth rate of 3% in a span of 40 years ranging from 2011 to 2050.
The distribution of which would double in the 30’s and again at the penultimate one.
The characteristics on which the world in 2050 would be based upon are:
a) Key findings: china would overtake the US economy by 2017 with respect to the purchase power parity terms and by 2027 w.r.t market exchange rates, India would become a global economic giant, Russia as largest European economy.
b) Projections: Based upon a PwC model economic growth projections which takes into account the demographics, capital investment ,education levels and technological progress following were the results:
1. Developing economies would have a gdp growth rate at ppp ranging from 4-6 % w.r.t the developed economies having a 2% growth of the same.
2. In terms of values china will have the highest gdp 30% higher than that of the US.
c) Opportunities and challenges for business:
1. Opportunities: The emerging economies will not only provide as the low cost production locations but also as the large consumer markets, hence companies seeking growth would divert towards these economies.
2. Challenges : The companies would have to understand and adapt to local rules and regulations and customs and be in good terms with the local government. Also take care of optimal production locations.
d) Energy use and climate change: According to the projected scale of growth there would be a hike of 6 degrees in global warming , hence a more plausible and affordable greening scenario would help out in mitigating the risks.
Answer 2)
Main drivers behind the longer term development in a country would be as follows:
a) Demographics: according to the latest UN projections all of the countries considered in the study except india would see a declining share of working population aged 15-59 because of the significant ageing effects which would affect the emerging economies as well now in the long run w.r.t the tenure of 2011-2050.
But if we lookup for expected growth rates in prime working age populations then there are more countries with positive growth rates in comparison to that of higher birth rates.
An ageing population would impact he major oecd countries along with china Russia hence reducing their growth in the long run.
b) Education: With respect to the previous studies this one as well Is based upon the estimates of human capital stock on the data on average years for age of 25 and over from barro and lee.
The rate of return is assumed to be 13.4% in the first four years w.r.t the sub Saharan Africa.
Next four a rate of 10.1% w.r.t world as a whole and hence a rate of 6.8% of the oecd countries after the 8th year.
The fastest educational catch up rates are assumed to be seen in Asian economies consistent with trends which is also an important factor in their relatively strong projected growth performance.
c) Capital investment: according to the IMF data for more recent years there is a constant depreciation of 5% within a range of 4-6 %.
Also the decrease in difference of percentages of economies of 2050 w.r.t 2025 for example:5% in Nigeria to 40% china would be 10% in Nigeria to 25% china.
These assumptions state that with declining marginal returns on new investment over time the very high investment/gdp ratio seen in Asian economies will tend to decline in the long run as economies mature with time.
d)Technological progress: As per the latest reports there is an assumption of slower growth rate in the economies such as india Nigeria and Indonesia but a higher pace of catch up 1.5% to be exact.
But these assumptions may get a hike resulting due to new innovations and ideas keeping in mind the high amount of investment of the companies and the government as well in research and development of new technology useful for various services.
Answer 3)
Efforts of government with respect to the drivers of longer term development in a country are as follows:
a) Demographics: In this case the government as observed there is a decline in working age population should put more efforts into people to become a part of the labour force w.r.t the development if the country per se through various skill development programs and other training schemes.
b) Education: in the education sector the government should provide with better infrastructures and academic institutions so that there is a higher rate of return because as observed in the emerging economies there is still a really high need of better schools and colleges and learning institutions with better policies to work with w.r.t the developed economies.
c) Capital investment: since there is are high depreciation rates in the future economies of the world as a whole government should come up with new financial and economical strategies so that are able to mitigate the higher risks developing on the backs of depreciation which would eventually affect the world economy as a whole. Also take care of higher investment on the new services so that there is a decline in the level of depreciation thus affecting the market structure in a positive manner.
d) Technological progress: In this driver of economic growth the government should invest much more than usual in the research and development department so that there is a higher chance of better innovations and ideas thus resulting in better services for the human stock as well as the organizations resultant in the development of world economy as a whole.
Answer 4)
The global middle class in 2030 can be described in 5 dimensions: size, consumption, environment and social problem; and political view.
For the principal measurement, it is said that the white collar class is becoming speedier than the worldwide populace and will crest preceding 2030. Be that as it may, occasions, for example, emergency or market blasting can influence the quantity of such class. The working class populace is set to develop by 160 million individuals for every year by and large through 2030 and Asian could represent two-third of the aggregate worldwide white collar class populace.
About the utilization, it will increment $29 trillion from 2015 to 2030, $15trillion of which will be from the present lower center wage including India, Indonesia, Vietnam, the staying from China and Brazil. Along these lines, Asia will take for the greater part of aggregate white collar class utilization advertise. There will be a few changes in the rank of white collar class utilization between nations, similar to China surpass The US, India overwhelm Japan and can even surpass the US, and a few nations like Pakistan, Turkey and Egypt will build the working class to over $1 trillion.
From the natural view, the expansion in white collar class can prompt increment in carbon oversight. However increment in white collar class prompts increment in urbanization and to a little degree, country territory spend more on transportation than urban range. A few people figure it can be a reason that white collar class development cause less carbon impression than anticipated.
In political view, the policy in the country can affect the middle-class. If there is no frame for the win-win between middle-class in countries, the governments may see the interest conflicts between such class in developed and developing countries.