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Opinion / Web Comments

Differences of developed and emerging economies

By Marcos Fava Neves (chinadaily.com.cn) Updated: 2012-11-09 13:25

This article has the objective of classifying some differences seen in emerging and developed economies. How can these countries be generally characterized, what are the major concerns and specificities and the huge differences that exist, being the most important probably the speed of growth and development.

The world economy can be understood as several markets, intercommunicated and linked in different blocks, with totally different dynamics. The world markets are a much more complex environment. In this context, it is necessary to evaluate and differentiate the present economic profiles of these markets. These profiles are dynamic and change with the fast changing political, economic, social and technological environments.

Nowadays, markets can be divided into two major groups: those already developed and mature represented by countries belonging to the European Union, Canada, USA, Japan, South Korea for example, and those under development, called emerging economies or countries. Brazil, India, China, Russia, South Africa (the so called BRICS) are examples that can be classified in this emerging category and several other Asian, African, Eastern European and Latin American economies.

It is quite a challenge, but I try here to establish some points of comparison and to classify what is going on in these two categories. Several problems arise from this comparison, since inside each block there are several differences and even levels of development that can’t be compared, but to generalize, these characteristics might be useful to settle a “go to market strategy”.

The analyzed aspects are listed below, and after that, the table with the analysis is shown to summarize: Gross domestic product (GDP); size of population; degree of urbanization; maturity of food markets; impact of income growth and distribution; consumer profile; groups of countries profiles; quality (food safety) in markets; participation (share) of food service; status of retail systems; expansion of commodity production possibilities; environment and preservation issues; adoption of biofuels; profile of consumption; maturity of logistics and infrastructure; institutional environment. Table 01 summarizes the differences.

An analysis of this table shows that developed markets are more mature and stable, have predictable characteristics with very well established aspects such as, for example, logistics, retail and institutional environment. This maturity is reflected in the population that tends to search for differentiated products and services, featuring various niches as those seeking healthy products, environmental and social trends, among others. After this analysis, the next article will focus on “go to market strategies” for companies in the fast growing emerging markets of food, where things and markets are really booming.

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