Where Global Growth Is Emerging and What It Means for Leaders

By Robert Grosse, professor of business administration and director for Latin America

The centers of global economic growth are changing. For leaders, understanding where growth is emerging, what is driving it, and how economies are connecting to one another is becoming increasingly important.

That requires more than following economic growth rates. It requires a global perspective.

At Thunderbird School of Global Management at Arizona State University, that perspective is central to how leaders are prepared. Students are expected to look beyond the country they come from, understand different economic and political systems, and consider how businesses and economies connect across borders.

That matters because some of the most important growth stories today are emerging beyond the markets that have traditionally dominated the conversation.

New centers of growth are emerging

The United States and China remain major centers of global growth. China continues to grow at rates well above most developed economies, while the United States remains one of the fastest-growing major industrial economies.

India

India has emerged as another significant center of global growth. With more than a billion people, relatively low per capita income, and rapid economic growth, it represents both a major market and an increasingly important source of global economic activity.

Southeast Asia

Southeast Asia is another region to watch. Vietnam, along with Thailand, Malaysia, and Indonesia, is becoming increasingly important as these economies build on the development paths established by earlier Asian growth stories, including Japan, South Korea, Taiwan, Singapore, Hong Kong, and China.

Arabian Peninsula

The Arabian Peninsula presents a different model. Countries such as Saudi Arabia and the United Arab Emirates have used wealth from oil and natural gas to invest in technology and build new capabilities.

These economies are following different paths, but they share an important connection: their growth is tied to participation in the global economy.

For leaders, that makes understanding global markets more important than ever.

Openness can create a path to growth

Economic openness has been a recurring feature of successful growth stories. The ability to trade, attract foreign direct investment, and participate in international flows of capital gives companies and economies opportunities to develop new capabilities.

Global value chains are an important part of that process.

A company does not necessarily have to build an entire industry from scratch to become part of a growing global market. It can begin by performing one part of a larger process, develop expertise, and gradually move into higher-value work.

Foxconn provides a useful example. The Taiwan-based company became a major global manufacturer by assembling products for companies such as Apple and Samsung. Over time, it developed additional capabilities and expanded its role in the value chain. Its manufacturing operations have also expanded into countries such as Vietnam and India.

The same basic process can create opportunities for emerging markets. A company might begin by assembling clothing or electronics, producing a raw material, or performing another relatively specialized part of a global production process. From there, it can develop technological capabilities, expand its business, and move further up the value chain.

That is difficult. But it provides a potential path from participation in global markets to broader economic development.

Understanding how those opportunities form is part of what global management education needs to accomplish.

Leaders need to know what is driving growth

Not every rapidly growing economy represents the same kind of opportunity.

Guyana, for example, has experienced extraordinary economic growth following the development of its oil resources. But resource-driven growth does not automatically translate into broad industrial development. That is why leaders need to look beyond the headline numbers.

What is driving growth? Is an economy attracting foreign investment? Is it developing technological capabilities? Is it becoming more integrated into global value chains? Are businesses moving into higher-value activities?

Those questions can help distinguish a temporary surge from a broader development trajectory.

They also illustrate why predicting the global economy decades into the future is so difficult. Technology, government policy, and other factors can change the direction of an economy quickly. For leaders making decisions today, a 10-year horizon can be a more useful framework.

The goal is not to predict everything that will happen. It is to understand the forces shaping the next phase of global growth well enough to make informed decisions.

Thunderbird prepares leaders to operate in that reality

This is where Thunderbird's approach to global management becomes particularly relevant. With locations in East Asia, South and Southeast Asia, and the Middle East, Thunderbird has a presence in these growing markets.

Global business cannot be understood from a single national perspective. At Thunderbird, students are required to engage with international political economy, international finance, and other subjects that force them to consider what is happening beyond their own countries.

The experience extends beyond the classroom. Students have opportunities to work overseas and engage directly with different markets and communities. Just as important, they learn alongside people who bring different experiences and assumptions to the classroom.

Historically, about half of Thunderbird's students have come from outside the United States. That creates an environment in which students are continually exposed to different cultural, legal, and economic perspectives.

That kind of interaction changes the questions leaders ask.

Instead of assuming that a business decision will work the same way everywhere, leaders learn to consider the interests, needs, institutions, and conditions that shape decisions in different markets.

Global growth creates new leadership questions

The emergence of new growth centers does not mean established economies are disappearing. It means the global economy is becoming more interconnected.For leaders, the opportunity lies in understanding the connections.

Where is investment moving? Which economies are developing new capabilities? How are companies entering global value chains? What policies are encouraging or limiting that participation? And where can a company contribute enough value to move from one part of the chain to another?

They are also questions that require leaders to look beyond familiar markets and challenge their assumptions about where economic opportunity comes from.

That is the reality Thunderbird prepares leaders to navigate: a global economy in which growth is increasingly distributed across regions, industries, and networks, and where understanding those connections can be as important as understanding any individual market.

The next center of growth may not be obvious. Leaders need the global perspective to recognize it when it emerges.

Find out more about Thunderbird’s global reach and explore program offerings.