'It's time to head east to grab new business'

Yorkshire firms could face a bleak future as the UK enters the "slow lane of history" predicted in a new report released by Pricewaterhouse Coopers (PwC).

It says that economic supremacy could shift east to the emerging economies leaving UK firms, along with those in the rest of the western world, in the doldrums.

The report says that the UK should avoid focussing on markets in the west and actively seek out opportunities in the so-called emerging economies.

In the latest of its The World in 2050 series of reports, PwC concludes that the global financial crisis has accelerated the shift in economic power to emerging economies.

Recent figures reveal that the emerging economies of China, India, Brazil, Russia, Mexico, Indonesia and Turkey – known as the E7 – are likely to overtake the G7 economies of the US, Japan, Germany, UK, France, Italy and Canada before 2020 although other data suggests it could be around the 2030s.

The most significant increase in its share of world Gross Domestic Product (GDP) – the total market values of goods and services produced – is projected for India. In 2009 India's share of world GDP was two per cent but by 2050 it could be 13 per cent.

Steve Denison, northern chairman at PwC, said: "This changing world order poses both challenges and opportunities for businesses in the current advanced economies, including the UK. On the one hand, competition from emerging market multinationals will increase steadily over time and the latter will move up the value chain in manufacturing and expand strongly in areas like banking where the global financial crisis has hit the West harder than the East.

"At the same time, rapid growth in consumer markets in the major emerging economies associated with a fast growing middle class will provide great new opportunities for Western companies that can establish themselves in these markets."

He added: "If the UK is not to be playing in the slow lane of history for the next 40 years, then it needs to find a way to break into these fast-growing emerging markets on a much larger scale than achieved so far".

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