Rapidly Developing Economies (RDE)
The recent article “Navigating the Five Currents of Globalization” by The Boston Consulting Group (January 2005) identifies five underlying global market changes which will have a profound impact on the future operation and organization of commercial businesses.
Certainly the economies of the developed nations (the United States, Japan, Western Europe) will continue to grow. In real terms, these economies will continue to represent the bulk of the GDP for the foreseeable future. The rapid growth of the RDE economies, however, can not be ignored.
- “… Rapid growth of RDE markets”
- “… cost and capital advantages of RDEs”
- “… development of talent and capabilities in RDEs”
- “… migration of customers to RDEs”
- “… emergence of RDE-based global competitors”.
Developing a partner in a RDE can be viewed as a two way street. In the short term, the business gains low cost region price advantages and the RDE supplier finances growth. In the long term the RDE supplier gains experience and knowledge in the design and manufacture of globally competitive products. The business has the potential to use the RDE supplier as the entry point into the RDE market.
Rather than viewing the RDE supplier as a potential threat, maybe the businesses in the developed nations should view the exchange as a future opportunity for mutual growth.