The start to the year 2008 is already standing out as an economic watershed: global volatility in markets has shocked investors, while commodity prices soar. Fallout from a sub-prime mortgage crunch has the United States poised on the brink of recession. Europe, too, is feeling the pinch as housing prices ease and service-industry growth slows to a crawl. The Bank of Japan, meanwhile, has warned that a mild recession is likely in 2008 as bank lending evaporates and business activity stumbles.
In the past, such signs in key economies spelled a worldwide downturn. This time around, however, the rise of key emerging markets—most notably China and India, but certainly including Brazil, Russia, Mexico and many other fast-growing economies around the world—has fuelled speculation that alternative drivers in emerging markets can help insulate regions of the world from some of the trouble in the US and other major developed economies.
A business environment characterised by global interconnectedness, increasing macroeconomic convergence, tightening of competitive forces and high levels of confidence from fast-growing countries makes us wonder: What is success in a connected world?
Developed economies' decreasing share of the world economy
