Someday, U.S. economic dominance will be a distant memory. A new report is showing just how soon that might be. The paper, from the Organization for Economic Cooperation and Development, a European-based think tank, shows that over the next 50 years, the size of China and then India's economies will surpass that of the U.S.
According to the report, the global economy is expected to undergo seismic shifts over the next 50 years. China will surpass America as the world's largest economy as early as 2016, and a fast-growing Indian economy will outstrip the American economy by 2060.
These are just individual examples of a broader change that will take place over that period. The share of global GDP from OECD member countries—currently consisting of many of the world's large, advanced economies, like the U.S., European Union member countries, Japan, Australia, Canada, and Mexico—will shrink considerably, from nearly 65 percent as of 2011 to 49 percent in 2030 and just over 42 percent in 2060. Non-OECD countries, a group that includes all of the emerging BRIC countries (Brazil, Russia, India, and China), will likewise grow, from 35 percent in 2011 to nearly 58 percent in 2060.
"As the largest and fastest-growing emerging countries fully assume a more prominent place in the global economy, we will face new challenges to ensure a prosperous and sustainable world for all. Education and productivity will be the main drivers of future growth, and should be policy priorities worldwide," said OECD Secretary-General Angel Gurria in a statement accompanying the report.
The booming emerging economies will be led by China and India, as well as Indonesia, which are all expected to show massive productivity growth.
"The reason why productivity growth over the next 50 years tends to be higher in emerging economies as compared with more mature economies is that they start out from comparatively low levels of productivity," writes Asa Johansson, OECD senior economist and the report's lead author, in an email. "Thus, there is greater scope to 'catch-up' with leading economies" through like improving technologies, management practices, and labor force skills, she says.
But once those productivity-building phenomena take hold, those economies' growth will slow from their rapid rates. Non-OECD economies on average grew by 6.7 percent annually from 1995 to 2011 but are expected to only grow by 2.8 percent from 2030 to 2060.
The idea of the U.S. losing its No. 1 spot may sound alarming, but it doesn't mean that the American economy is set to shrink. Rather, it means that its share of the global economic pie is shrinking, though the pie itself will continue to grow. With the world shaking off the economic crisis, the OECD predicts that global GDP will grow at around 3 percent, on average, through 2060. The U.S. economy's rate will grow slightly more sluggish, averaging 2.3 percent growth from 2011 through 2030, and only 2 percent from 2030 to 2060.
That slowdown will be largely due to Americans growing grayer. As the U.S. population grows older, the population of working-age Americans will grow more slowly, says Johansson. In this way, aging will also contribute to several other countries' slowing growth in coming decades, as life expectancies grow and, in some countries, fertility rates drop. In other words, we will simply slow down as we grow older.
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Danielle Kurtzleben is a business and economics reporter for U.S. News & World Report. You can follow her on Twitter or reach her at firstname.lastname@example.org.