Emerging markets have attractive attributes that could contribute to strong future growth:
- Favourable demographics: The populations of nearly every developed country—with the significant exception of the U.S.—are expected to begin shrinking before mid-century. While some developing countries face similar futures, many have large, young populations that are increasingly moving to urban areas for employment opportunities.
- Growing consumption: Emerging markets’ economies historically have tended to focus on exports—producing goods to be shipped abroad to wealthier countries. Many economists predict a shift away from this model toward domestic consumption-led growth as incomes rise and populations migrate from poor rural areas into cities.
- Room for productivity gains: Productivity in emerging markets has greatly lagged that of mature economies. Analysts predict that better infrastructure and technological advances in emerging markets could greatly boost productivity, a major factor in sustainable economic growth.