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THE NEW GLOBAL WORLD ORDER What The Emergence of China, India and Brazil Means for You. John N. Doggett, JD, MBA, Senior Lecturer Global Management, Entrepreneurship & Sustainable Energy McCombs School of Business Senior Research Fellow, IC 2 Institute University of Texas at Austin
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THE NEW GLOBAL WORLD ORDERWhat The Emergence of China, India and Brazil Means for You John N. Doggett, JD, MBA, Senior Lecturer Global Management, Entrepreneurship & Sustainable Energy McCombs School of Business Senior Research Fellow, IC2 Institute University of Texas at Austin john.doggett@mccombs.utexas.eduwww.jndoggett.com November 12, 2010
Strategic Inflection Points Are Scary • “A strategic inflection point is a time in the life of a business [or a country] when its fundamentals are about to change. That change can mean an opportunity to rise to new heights. But it may just as likely signal the beginning of the end.” • Andy Grove, Only the Paranoid Survive
Four Words Say It All It’s the economy, stupid!
Regaining Their Place in History Emerging from the Mist
At the End of WW II • Europe and Asia had suffered unimaginable destruction. • Most of the factories of our competitors had been destroyed. • For a brief period in history, American manufacturing firms were the only game in town.
Assume is a Very Dangerous Word • We assumed that Third World Countries would always be dirt poor colonies. • We assumed that Third World Countries would never be able to produce innovative products that could compete with our products. • We Were Wrong On Both Counts.
Be Careful What You Wish For • We told the world that our way of life was better than Communism or Socialism. • CNN and Hollywood showed the world an irresistible vision of American Life. • Then the Unthinkable happened. • On November 9, 1989, the Berlin Wall Fell • On Christmas Day, 1991, the USSR ceased to exist. • We had won the Cold War. • And most of the world wanted to live like US.
Birth of the BRICs • In 2001, as the Internet Bubble was collapsing and the stock market was imploding, Goldman Sachs predicted that four countries would dominate global economic activity in the 21st Century. • Brazil • Russia • India • China
Is Goldman Sachs Crazy? • 6,100% Annual Inflation (1994) • Collapse of the Ruble (1998) • Two Weeks of Foreign Reserves (1991) • The Cultural Revolution (1966-1976)
Largest Countries By Population • China 1,330,141,295 (slightly smaller than the US) • India 1,173,108,018 (slightly more than 1/3 the size of the US) • United States 310,232,863 (6.25% of the earth’s land mass = 424,378,888) • Indonesia 242,968,342 (slightly less than 3X the size of Texas = 25 million) • Brazil 201,103,330 (slightly smaller than the US) • Pakistan 184,404,791 (slightly less than 2X size of California = 37 million) • Bangladesh 156,118,464 (slightly smaller than Iowa = 3 million) • Nigeria 152,217,341 (slightly more than twice the size of California) • Russia 139,390,205(approximately 1.8 times the size of the US ) • Japan 126,804,205(slightly smaller than California) • Mexico 112,468,855 (slightly less than three times the size of Texas) • Philippines 99,900,177 (slightly larger than Arizona = 6.6 million) • Vietnam 89,571,130 (slightly larger than New Mexico = 2 million) CIA World Factbook –November 11, 2010
National GDP in 2009 (purchasing power parity) Country GDP 2009 Growth % • United States $ 14,140,000,000,000 - 2.6% • China $ 8,748,000,000,000 9.1% • Japan $ 4,150,000,000,000 - 5.3% • India $ 3,570,000,000,000 7.4% • Germany $ 2,810,000,000,000 - 4.9% • United Kingdom $ 2,128,000,000,000 - 4.9% • Russia $ 2,110,000,000,000 - 7.9% • France $ 2,097,000,000,000 - 2.5% • Brazil $ 2,013,000,000,000 - 0.2% • Italy $ 1,739,000,000,000 - 5.1% • Mexico $ 1,465,000,000,000 - 6.5% • South Korea $ 1,364,000,000,000 0.2% • Spain $ 1,362,000,000,000 - 3.6% • Canada $ 1,279,000,000,000 - 2.5% CIA World Factbook – November 11, 2010
Elephants Emerging from the Mist • Total World Population = 6,768,181,146 • BRIC Population = 2,843,742,848 (42%) • Total World Land Area = 174,814,000 sq. km. (- oceans) • BRIC Land Area = 38,471,715 (22%) • Total World Gross Domestic Product = $58.15 Trillion (Official Exchange Rate) • Total World Gross Domestic Product = $69.98 Trillion (Purchasing Power Parity) (p.p.p.) • BRIC Gross Domestic Product (p.p.p.) = $ 16.44 Trillion (23.5%) Source: CIA World Factbook – November 11, 2010