Sunday, October 16, 2011

Are the E7 About to Take the Lead Over the G7?

They say the only place to go, once you’ve reached the top, is down. The G7 countries have been sitting at the top for some time now and maybe, just maybe, their time at the top is coming to an end and seven emerging markets are about to take over. History will tell us that no single nation has stayed at the top and, probably, all those that were there and then were knocked off their perch never saw it coming either – maybe something to do with the arrogance of dominating for too long.
Can you name the top seven emerging economies – that’s a good place to start? If you can it means you’re up-to-date with current trends and who’s driving the global economic recovery. If not, maybe, you’re still embracing a ‘status quo’ that is out of date and ignoring a scenario which may have a significant impact on the future growth of your own organisation.
The seven countries that make up the E7, as the largest emerging economies are – China, India, Brazil, Mexico, Russia, Indonesia and Turkey. It’s these seven countries that Michael Queen, 3i CEO, states will surpass the G7 group of the largest industrialised nations within five years from now; and he goes on to predict that these same seven emerging economies will be twice the size of the G7 by 2050, (Helen Power, The Times, 13th October, 2011, p.48).
Unless the current G7 countries wake up to the fact that the world is changing, they will fall into the trap of many countries before them – of believing they are invincible (and being proved wrong).
What’s interesting in this specific era is that one could argue that it appears as if the citizens of the G7 countries, seem to be more aware of the global environment than their business and political leaders around them, who seem determined to cling to a past state that gave them ‘power’ and refuse to see the need for change or maybe it’s simply they don’t know how to change.
Clever, forward looking organisations have been developing trade links with the seven emerging economies over many years – developing sustainable strategies and long-term relationships that will give them a competitive advantage as the global economy shifts its dominance.
Those organisations who can’t embrace the change are doomed to fighting for the local scraps of business with other arrogant post-dominant wannabe’s. What’s sad about this forthcoming scenario isn’t that these blind leaders will be brought down to earth with a thud, but the damage that they will do to their local communities in the process, through the creation of horrific levels of unemployment and deprivation, all through their blind arrogance.
However the good news is that the tide hasn’t completely turned yet and there is still scope and time for the G7 countries, or some of them, to make the required changes that will allow them to compete with the strong emerging economies and play a significant part in the next generation of global economic dominance. It will just take some humility and honesty, both by those in power and those ‘reporting’ events, like the media – who could through their constant desire for sensationalism, drive some of the G7 economies into oblivion, just for the sake of a story – and taking no responsibility in their role as the country declines, until they too are just a blast from the past.
The main message for organisations is to look after themselves through detailed strategic analysis, strategic formulation and implementation – seeking the ‘real’ opportunities in the global economy and being totally honest about their real weaknesses and the real threats on their business, both in the short and the long term.
Emerging from the next few years will be the truly great leaders within the G7 business environment – but don’t expect to be counting them on more than two hands….

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