How growth markets are redefining the global economy

Employees walk in front of a pyramid-shaped building at the Infosys campus in the Electronic City area of Bangalore. Reuters

For decades, development has been measured almost exclusively through gross domestic product and other macroeconomic indicators. Using these metrics, the world economy delivered rising growth rates, expanding infrastructure and global integration. Yet the model left critical gaps: lagging human development, underdeveloped private sectors in many countries and little emphasis on equity or sustainability.

The 2025 UN Human Development Index Report makes this stark. Human development progress is experiencing an unprecedented slowdown. Excluding the crisis years of 2020-21, the meagre rise projected this year is the smallest since 1990. This is not a blip but a structural failure.

A core issue is the “success” metric itself. All nations and governments chase and report GDP growth, while GDP was never designed to capture well-being, inequality, environmental sustainability or social cohesion. In fact, GDP can show growth even while living standards stagnate and natural resources are depleted. As a result, many countries may appear successful on paper while citizens face widening disparities and declining well-being.

This critique is not new and, indeed, now widespread. Today, policymakers, academics and business leaders alike recognise that 20th-century growth models are no match for 21st-century challenges. If we continue chasing GDP while ignoring human development, the future risks becoming one of high output but low well-being.

However, if we recalibrate and work on putting people, equity, innovation and sustainability at the core, we can enter a new era of prosperity.

This recalibration is the first, and core, element of the new calculus of prosperity. Prosperity cannot be measured only by economic size but by opportunities for people, resilience of systems and fairness of outcomes. It must be entrepreneurial, innovative, and built on sustainability and inclusion as non-negotiables.

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We now argue that there is a second element for this new calculus: the so-called “emerging” markets. The majority of these markets, of which the GCC is one, are no longer just catching up (or emerging). They are part of defining the future and have now earned a new title: future growth market.

Globally, and according to the 2025 IMF World Economic Outlook, emerging markets and developing economies will grow at 3.7 per cent this year, nearly three times the 1.4 per cent forecast for advanced economies. World Economics puts the contrast sharper: 5.7 per cent versus 1.9 per cent. This is a structural change, reshaping the global economy for the century ahead.

West Asia illustrates this vividly. The GCC controls $4.2 trillion in sovereign wealth assets, according to the Sovereign Wealth Fund Institute, operates world-class trade hubs, and the World Bank reports that it is seeing non-oil GDP growth above 4 per cent annually. Meanwhile, India, now the world’s most populous nation at 1.43 billion people, will account for more than 16 per cent of global GDP growth from 2023-2028, according to the IMF. Its middle class of 400 million is expected to double by 2030, a 2023 Brookings Institution report says, unleashing demand, innovation and investment on an unprecedented scale.

In Africa, the numbers are equally interesting. By 2050, the continent will be home to 2.5 billion people, more than 60 per cent under 25. This will be the largest youth cohort in history. Already, Africa has the world’s highest entrepreneurship rates – more than one in five working-age adults are starting a business. Combined with rapid urbanisation and mobile adoption, the continent is a laboratory of innovation.

Critically, global growth markets are not merely copying advanced economies – they are leapfrogging. Kenya’s M-Pesa reinvented finance with mobile money, India’s telemedicine platforms are influencing rural healthcare models globally, and the UAE’s digital government services are among the world’s most advanced.

The old binary of 'developed versus developing' is obsolete

These are not just stories of growth; they show prosperity can be inclusive, sustainable and driven by innovation.

In this new calculus, human capital is the most valuable resource and digital infrastructure the ultimate enabler. Countries that invest in their young, entrepreneurial populations, and that build sustainable, tech-enabled systems, will define the coming century.

Innovation no longer flows only from “advanced economies” outward. Increasingly, it flows in all directions. What starts in Lagos, Jakarta or Dubai may soon shape practices in London, Tokyo or New York.

Barriers remain. Venture capital still flows disproportionately to Silicon Valley rather than Nairobi or Riyadh. Perception biases, not performance, often disadvantage startups from growth markets, and trade barriers and regulatory fragmentation persist.

Yet the old binary of “developed versus developing” is obsolete. The real choice is this: cling to outdated models that prioritise GDP growth while neglecting equity, or embrace a new order focusing on well-being and where global growth markets lead prosperity – entrepreneurial, inclusive and sustainable.

The 21st century will not be defined by those who dominated the 20th. It will be shaped by those who innovate, adapt and build systems where people and the planet thrive.

From Riyadh’s corridors to Bangalore’s campuses, from Abu Dhabi’s ports to Nairobi’s tech hubs, a new generation of economic champions is already rising.

The era for this new calculus has begun.

Dr Yasar Jarrar teaches at the Hult International Business School and is a columnist for The National

Dina H Sherif is the executive director of the MIT Kuo Sharper Centre for Prosperity and Entrepreneurship, and a senior lecturer at the MIT Sloan School of Management