Strategies for a Two-speed world

Source : Knowledge @ Wharton

Welcome to “the new normal” — a two-speed world in which two types of economies are emerging: low-growth and high-growth. On the one hand, rapidly developing countries such as China, India and Brazil are characterized by high growth but low average household income. With GDP ranging from 8% to 12% and some 2.6 billion people, these markets are hard to ignore.

By contrast, the low-growth countries — most of the U.S. and Western Europe, for instance — have a slower rate of economic growth but higher household incomes. With GDP growth of only 1% to 4%, these economies are expanding more slowly but their populations have higher salaries — and more to spend.

The two types of economies present two very different business environments, each with different needs and challenges. Success in each market requires different products, different ways of operating and different ways of looking at the world. In this article, business leaders, Wharton professors, and experts from BCG consider how this two-speed world will affect global business strategies — and what it will take to thrive.

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