Over the next several decades multinationals from emerging economies Essay

Over the next several decades multinationals from emerging economies are likely to become a key force in the shaping of the glob - Essay Example However, over a certain period of time, the emergence of a significant number of rising markets as well as ostensible deterioration in developed markets have been observed. Nowadays, a huge exodus of MNCs from developed economies to emerging economies has been observed. A majority of MNCs have found favourable working conditions and are establishing themselves in the developing economies. In this effect, MNCs from developing economies are bound to become a major force in determining the international competitive landscape (Roach, 2007). Considering this aspect, the discussion is based on evaluating the validity of the statement that in next several decades, MNCs from emerging economies are likely to become a key force for shaping the global competitive landscape. ... MNCs from emerging economies usually obtain leverage from inexpensive labour, favourable trade principles and overall inducements to expand the business itself. Apparently, not just the MNCs are impacted by international expansion, the host nation’s economic environment and organisational experience are also impacted by MNCs. A proliferation of MNCs from emerging economies can lead to increased competition, augmented innovation in markets, better rearrangement of resources and increased job opportunities (Ernst & Young Global Limited, n.d.). MNCs of Emerging Economies as Key Force in Shaping Global Competitive Landscape In present days, emerging markets serve as an inducer of economic growth for entire world. The emerging economies have stronger potentiality of growth in terms of Gross Domestic Product (GDP) at Purchasing Power Parity (PPP). According to the estimation of World Bank, the market size of E7 economies will become 64% larger in comparison to present G7 (Pricewater houseCoopers LLP, 2011). A significant convergence has been observed between E7 and G7 in recent times, which was accelerated by international economic recession of 2007. In 2007, the total GDP at PPP of G7 nations was almost 60% bigger than E7 nations. In 2010, it has been observed that the gap between GDP at PPP had shrivelled by 35%. The major drivers for growth of E7 nations are China and India (PricewaterhouseCoopers LLP, 2011). The following table shows the GDP at PPP in 2009 and estimation at 2050: Rank in 2009 Country GDP at PPP in US$ billion Rank in 2050 Country GDP at PPP in US$ billion 1 US 14256 1 China 59475 2 China 8888 2 India 43180 3 Japan 4138 3 US 37876 4 India 3752 4