It was suggested that the disparity between developed world and developing world incomes will begin to narrow – with potentially unpleasant repercussions in the developing world. For example, as $40K incomes drop to $30K in developed countries, $10K incomes will rise to $20K in developing countries. Many services and functions can now be provided remotely which will benefit the developing world in terms of further job creation.
There is a significant correlation between economic growth in the developed world over the last 30 years and immigration patterns. For example Canada imports around a million new immigrants per hear (3% of the population) – and the growth rate of the Canadian economy is usually around 3%. As countries in the developing world start to exploit the demographic advantage associated with young and growing populations, the developed world will continue to struggle with the economic challenges of an ageing population/workforce. This will cause significant disruption over the next 10-20 years.
China has invested a lot of resources in Africa and has gained significant political influence. However, there is also a growing realisation that the deal China is offering in Africa is not substantially different from the deal offered by Western countries during the 1960s.
Alongside the rise of the middle class in Africa, 40% of Africa’s population still lives within diaspora communities in other countries. This diaspora is now returning home to set up businesses, investing their money and skills and penetrating policy making circles. However there is a need to educate young people on how to appreciate and exploit the value and resources in their own countries – rather than allowing foreign operators to monopolise the high margin components of the supply/value chain (for example in the area of mining of minerals and metals). There needs to be more coordinated national and transnational discussion and debate about how to better exploit and share existing innovation.
It was suggested that there are limitations to bi-polar approaches which split the world in developed and developing countries. For example, China is currently experiencing rapid rates of economic growth, although their competitive advantage is substantially based on large social and economic inequalities. As those inequalities become increasingly difficult to maintain in the face of rising pressure for political, social and economic freedom, then this competitive advantage will start to be eroded. Higher levels of welfare and environmental protection for Chinese citizens will inevitably involve higher costs and therefore higher prices for Chinese exports.