Emerging markets are changing where and how the world does business. For the last three decades, emerging markets have been a source of low-cost but increasingly skilled labour. Their fast-growing cities are filled with millions of new and increasingly prosperous consumers, who provide a new growth market for global corporations at a time when much of the developed world faces slower growth as a result of aging.
But the number of large companies from the emerging world will rise, as well, according to a report from the McKinsey Global Institute (MGI). This powerful wave of new companies will profoundly alter long-established competitive dynamics around the world.
According to MGI, emerging economies’ share of Fortune Global 500 companies will jump to more than 45 percent by 2025, up from just 5 percent in 2000. That is because while three-quarters of the world’s 8,000 companies with annual revenue of $1 billion or more are today based in developed economies, MGI´s forecast shows that an additional 7,000 could reach that size in little more than a decade, and 70 percent of them will most likely come from emerging markets.