Emerging economies and emerging markets are terms that are being thrown around quite readily in today’s business world. Amidst the current and upcoming changes to political climates in some of the world’s most developed countries economic forecasters and investment experts often refer to emerging economies when predicting growth or elevated risks. But just what are emerging economies and why should we care about them? Here are 3 things you need to know about emerging economies:
- What is an emerging economy
An emerging economy or emerging market economy as it is often referred to is an economy with low to mid range per capita income (the income of the average person living in this particular economy). Emerging economies are characterized by their rapid growth and volatility; they offer a huge potential for growth however pose significant political, financial and social risks.
- What are some examples of emerging economies
Last year the IMF identified 23 countries as emerging market economies, however you don’t need to memorize all 23. A few common examples are the BRIC countries (Brazil, Russia, India, China) and the MINT countries (Mexico, Indonesia, Nigeria and Turkey). Other popular emerging economies are Malaysia, Thailand, Chile, the Philippines and South Africa.
- Why are emerging economies important
Emerging economies constitute about 80% of the world’s population, with countries like China and India dominating the market. The rapid growth and potential high yield offered by emerging economies also make them an attractive option for investors looking to take on more risk in hopes of a higher and faster return on their investment. In addition emerging economies are a haven for outsourcing offering lower labour costs and an abundance of manpower.
Praveeni Perera is an experienced entrepreneur having co-founded a training and consulting company catering to clients around the world. Her area of expertise is international expansions. You can connect with her via Twitter or LinkedIn