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The paper examines the thesis that by mid-21st century BRIC economies of Brazil, Russia, India and China (the "East") would be wealthier than today's seven largest developed economies of the G7 (the "West"). After analyzing the thesis, the study proposes the following. First, economic power is likely to shiftfrom West to East because the combined GDP of the BRICs would be larger than that of the G7. Second, competitive advantage is less likely to shiftfrom West to East, as after reaching G7's income levels, BRIC economies would simply at best become as competitive as G7 economies.
INTRODUCTION
Over the last ten years, developed countries have grown very little. Comparatively however, several developing economies have expanded at unprecedented rates. As developing countries' share of the world economic output has been rapidly rising, economists have started to predict that in the next few decades, global competitive advantage will likely shiftfrom West to East. In the context of this prediction, West refers to the United States, Canada, most of Europe, and developed countries of Asia (primarily Japan). On the other hand, East involves a few developing countries of Asia, Latin America and Eastern Europe. The shiftin global competitive advantage is a proposition advanced by organizations such as the Brookings Institution (Kharas, 2010; Lieberthal, 2010), Morgan Stanley (Morgan Stanley Capital International, 2011), the Financial Times (Pilling, November 22, 2010), and Investopedia (2011). Of a particular significance is the "BRIC thesis" formulated by Goldman Sachs' economists (O'Neill, 2001, July 2011; O'Neill & Stupnytska, 2009; Wilson & Purushothaman, 2003; Wilson, Kelston, & Ahmed, 2010). BRIC is an acronym for four largest developing economies of Brazil, Russia, India, and China. The thesis advances that by 2032, the combined GDP of BRIC economies would be as large as that of G7. G7 are seven biggest developed economies (the United States, Japan, Germany, France, the United Kingdom, Italy and Canada). The thesis also suggests that by 2050 BRIC countries would be wealthier than most of current developed countries. The purpose of this research is to study the impact of the growing economic power of developing countries, especially BRIC nations, on the ability of developed countries and their companies to sustain their current competitive edge. In particular, the paper will examine the proposition that...