The Growth Map
Portfolio Penguin, 2011
In 2001, economist Jim O'Neill became famous in the financial world when he coined the acronym BRICs - Brazil, Russia, India and China. These countries, he predicted, would be the "new 'bricks' from which the modern economy would be built". His prediction has, in many ways, been proven correct and O'Neill is credited with boosting the importance of those economies in the minds of investors and encouraging the world to pay attention to them. Ten years on from coining the term, O'Neill, now chairman of Goldman Sachs' asset management arm, reconsiders the state of the world's emerging market economies in The Growth Map: Economic Opportunity in the BRICs and Beyond, a book which, although fast-paced and engaging, goes off-road and sadly loses its way.
The Growth Map's main argument is that the BRICs, in addition to Indonesia, South Korea, Mexico and Turkey - four of the "Next Eleven" emerging economies identified by Goldman Sachs in 2005 - no longer fit under the emerging markets umbrella. Instead, they have emerged and become "a fundamental part of the modern world." As a result, says O'Neill, it's more appropriate to consider them "growth markets" - a label which aims to distinguish them from often politically and economically unstable emerging markets where investors can fear to tread, and emphasise the opportunities in these more advanced economies.
O'Neill tries to counter the claims of cynics that the growth markets concept is a marketing gimmick, designed to attract investment for Goldman Sachs or cash in on the tenth anniversary of the coining of the "BRIC" term. Growth markets are, he explains,"countries which we reckoned had the right demographics and productivity momentum to grow faster than the world average", alongside having the "financial infrastructure, market size and depth required by international investors". He says he would be proud if the concept could help the growth markets' populations become wealthier, but the new moniker is less compelling than the BRICs - and is unlikely to be as influential.
O'Neill's journey across his "growth map" gets off to a good start, with an interesting explanation of how economists measure countries' growth prospects. He then visits each of the BRICs individually and, in 50 pages of I-told-you-so's, he explains how the four nations have progressed beyond his own expectations, with the aggregate GDP of the four economies having quadrupled from $3 trillion to $12 trillion (