With over 140,000 people in 2,400 offices in 107 countries, WPP is a truly global enterprise and its CEO, Sir Martin Sorrell one of the best equipped commentators on emerging markets and globalisation.
We caught up with Sir Martin – a governor of London Business School – at the 2010 Global Leadership Summit. First, we asked what should we be learning from emerging markets?
The first thing is not to call them emerging markets, but to call them faster growth markets. So Brazil, Russia, India, China -- what Goldman Sachs calls the BRICs -- and the next group are growing faster and that’s where the balance of power is shifting. So what we should learn is very simple.
Most people focus on the shift from the west to the east, to China and India and maybe Russia. But there’s also a move to the south because this is, in my view, the decade of Latin America. Brazil will have the next World Cup in 2014 and they’ll have the Olympics in Rio 2016. Brazil is the driver for Latin America so there’s a move to the south.
And where else is on this trajectory?
With the World Cup South Africa was very much at the top of people’s minds. Africa, as a continent, is now presented, I think, more as a continent of opportunity, rather than a continent of challenges.
I think it’s very demeaning for people in the West to call these markets emerging when China, at the beginning of this year, was the third largest economy in the world with about $4.5 trillion (GDP) as opposed to Japan’s $4.9 and the United States at $14. So my guess is with the revaluation of the RNB China has probably surpassed Japan, so it’s the second largest economy in the world.
So it’s not actually emerging; this thing has emerged. And you could make the same claim for India, or indeed, Russia and certainly for Brazil. So this is where the growth is, this is where the action will be, certainly much more than Western Europe, although never write off America. America will always be big and successful with its human resources, entrepreneurial energies and natural resources. People wrote them off in the 1980s and then President Reagan came along and they were back. And in fact America has bitten back in the last three, four, five months, certainly in our experience and the experience of our clients.