New results of a PwC report sets out the latest long-term global growth projections to 2050 for 32 of the largest economies in the world. The research was started in 2008 and updated every second year from 2011 onwards. The full report reveals fascinating insights regarding the dynamics of economic growth and change. The research especially focusses on the development of the G7 countries (US, UK, France, Germany, Japan, Canada and Italy) versus the E7 countries (China, India, Indonesia, Brazil, Russia, Mexico and Turkey). A comparison of these two groups of countries is stunning. In 1995, the E7 countries were half of the size of the G7 countries, twenty years later they reached nearly the same size, and by 2040 they are estimated to be double the size of the G7.
Here some of the key findings:
- The world economy could more than double in size by 2050, far outstripping population growth, due to continued technology-driven productivity improvements
- Emerging markets (E7) could grow around twice as fast as advanced economies (G7) on average
- As a result, six of the seven largest economies in the world are projected to be emerging economies in 2050 led by China (1st), India (2nd) and Indonesia (4th)
- The US could be down to third place in the global GDP rankings while the EU27’s share of world GDP could fall below 10% by 2050
- UK could be down to 10th place by 2050, France out of the top 10 and Italy out of the top 20 as they are overtaken by faster growing emerging economies like Mexico, Turkey and Vietnam respectively
- But emerging economies need to enhance their institutions and their infrastructure significantly if they are to realise their long-term growth potential.
What are the implications for economies, governments and project management? There are certainly many challenges ahead, but also positive trends for all of us. Let me highlight some of them here in this short blogpost.
Projects and programmes are key drivers for strategic change and economic growth. Whether it´s investment in new infrastructure, development of new products and services or simply the improvement of the way of living in a country – projects (and increasingly also programmes) are enablers for economic upswing. However, the management of those projects does not only require a strong methodology, but the engagement of stakeholders, the management of change activities and the strategic direction setting by leadership. Despite the recent signs of nationalism and protectionism, the developments require global collaboration on all levels, between governments, corporations, projects and people. Therefore, project management needs to be pre-dominantly cooperative, which means to overcome barriers such as language, distance, borders, cultures, religion, race and other man-made obstacles.
Economic growth requires efficient utilisation of scarce resources, such as competences, energy and financial means. Portfolio management is required to thoroughly select and prioritise projects and programmes according to the available resources and the strategic priorities. Strategic PMOs may support government agencies and top managers in this crucial task. The alignment of all projects and programmes with the strategy and overall objectives is mandatory, otherwise it may end in doing something, for the sake of doing something.
The report addresses the challenges for policymakers for achieving sustainable growth. In order to realise the potential growth will require governments to implement growth-friendly policies that attract businesses, investment and talent. The policy makers should look to revive stagnating global trade growth, engaging in global markets, sharing best practice, and supporting the fluid movement of goods, services and people around the world. Recent political developments exemplify that in the face of rising inequality in many economies, governments need to ensure the benefits of growth are shared more broadly across society. In particular, they need to support education and life-long learning to create vibrant and dynamic workforces, mitigating the impact of ageing populations. Governments need to make concerted efforts to tackle climate change and align growth with long-term environmental sustainability. Finally, all of these actions require strong, reliable and trust-worthy institutions that develop strong macroeconomic fundamentals and enact structural reform. It requires policymakers to be more engaged in the execution of their concepts, actively support the project managers, establish a project-friendly culture and embrace the project management way of thinking. In this way, emerging economies will generate the correct political, social and economic incentives to support long-term innovation and growth.
Education and training should be at the heart of a growth strategy, starting in school and continuing throughout the life of people in their private, business or voluntary engagements. There is no “silver bullet” of project management. All concepts should be flexibly aligned to the context people are learning and working in. That means for the E7 countries to downsize the G7-concepts of project management to be more “fit for purpose”. Small and medium-sized companies, a relationship-oriented culture and the specific cultural context requires the education and training provider to adapt curricula and learning methods. Operational efficiency, agile processes and organisational settings as well as a special focus on innovation are some of the challenges that will shape the way projects are “managed” in future. Skills like “self-organisation”, “entrepreneurship” and “cultural awareness” are key for the success in this world of projects. I guess we can learn a lot from the Generation Y (in IPMA we call them “Young Crew”) how things will be handled in future.
The dominance of some western countries (E7) will disappear and new countries will rise to the top of the economic ranking. Countries such as Vietnam, Philippines and Nigeria are the biggest risers. Do we know how they manage projects? What is the context for doing projects and cooperating with partners out of these countries? Can we learn from them and develop a new way of thinking and working in projects? The IPMA is a perfect example of collaboration on a global level! We value the diversity of our network and advance the concept of managing projects through a mutually beneficial global exchange. Certainly, more research is needed to support the growth of society and our profession. The journey continues it remains challenging yet beneficial for all of us…