What is the difference between a developing country and a developed country? What significant trends are occurring in each type of market that relate to international business decisions?
Answer: Low- and middle-income nations are known as developing countries. This type has low per capita income—an average of $2,963 in 2009. The vast majority of their citizens have a low standard of living with limited access to few goods and services. Developing countries comprise the largest number of countries (151 or so, according to the World Bank) and have the highest number of inhabitants (a combined 5.5 billion) in the world. In contrast, developed countries are those with high per capita income—an average of $37,970 in 2009. Their citizens have a high standard of living with access to a variety of goods and services. Emerging economies are developing rapidly and have increased their share of the world's foreign-exchange reserves by 70% since the mid-1990s. Since 2001, annual growth in emerging markets has averaged 6.4 percent; in contrast, the rich economies have averaged 1.6 percent. While they expand, the global financial crisis slows and shrinks many developed economies.