Treasury Strategy & Transformation
Published  5 MIN READ
Please note: this article is over 10 years old. If you feel this article is inaccurate or contains errors get in touch here . Many thanks, TMI

Urban World: The Shifting Global Business Landscape

by Richard Dobbs, Jaana Remes, Sven Smit, James Manyika, Jonathan Woetzel, and Yaw Agyenim-Boateng

Emerging markets are changing where and how the world does business. For the last three decades, they have been a source of low-cost but increasingly skilled labor. 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 new report from the McKinsey Global Institute (MGI). This powerful wave of new companies could profoundly alter long-established competitive dynamics around the world.

Figure 1

Our research shows that the emerging economies’ share of Fortune Global 500 companies will probably jump to more than 45 percent by 2025, up from just 5 percent in 2000 (Exhibit 1). That’s 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, we forecast 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.[1] To put this dramatic shift in the balance of global corporate power in perspective, remember that many of the world’s largest companies have maintained their current status for generations: more than 40 percent of the 150 Western European companies in last year’s Fortune Global 500 had been founded before 1900.