Outlook What do Ireland and the combined economies of Brazil, Russia, India and China (dubbed the Bric countries), have in common? Both account for roughly 7 per cent of Britain's export sales. As a PricewaterhouseCoopers report, "The World in 2050", concludes today, if that state of affairs is allowed to continue, the UK will risk "playing in the slow lane of history".
Clearly, there are historical and geographical reasons for the fact that Ireland accounts for as big a market for British goods as the Bric countries combined. Still, we are already being left behind. Germany, for example, has raised the amount of its exports going to the Bric countries to 10 per cent of its total overseas sales. It has no particular advantage in the bid to sell to these nations – it has just been smarter and quicker to recognise the opportunities presented by the emerging economic powerhouses of the next century.
Make no mistake, that is what they are. PwC estimates that the E7 group of countries – the Brics plus Mexico, Indonesia and Turkey – will have a combined economy bigger than that of the G7 nations by 2017. It has China overtaking the US by 2018, and Brazil overtaking the UK by the end of the year after next. These estimates are based on purchasing power parity, adjusting for the lower prices of most goods and services in the E7, but moving to a more straightforward market exchange rate basis only pushes the overtaking dates back by 10 to 15 years.
Nor would a failure to recognise this theme will just be a case of missed opportunities. There will be threats too, with Asian multinationals expanding rapidly into industries where their presence on a global scale is as yet relatively modest – financial services, for example.
Having dispatched trade missions to both India and China in the first seven months of its administration, the new Government appears to have got it. But this is the year to prove that with policies that help us catch the Germans before it is too late.