TREND IN COUNTRIES WITH HIGH-INCOME ECONOMIES - ECONOMY - 2025

The World Bank defines a high-income economy country as a nation that has a per capita gross national income of $ 12,056 or more in 2017. This is calculated using the Atlas method.

Although the term "high income" is often used interchangeably with "developed country" and "first world", the technical definitions of these terms differ.

Source: pixabay.com

The expression first world commonly represents the nations that aligned with NATO and the United States during the Cold War.

Various institutions, such as the International Monetary Fund (IMF) or the Central Intelligence Agency (CIA), take into account other factors in addition to high per capita income when classifying nations as developed or with advanced economies. For example, according to the United Nations certain high-income countries may also be developing countries.

There are currently 81 countries with high-income economies, among which are the United States, Spain, Chile, France, Finland, Qatar, Saudi Arabia, Singapore, Canada and Australia.

Trends in high-income countries

Growth acceleration

One of the components that stands out in countries with high-income economies is the acceleration of economic growth.

However, it is largely something that could be expected. Japan and Europe are renewing themselves in the face of what was a lost decade for the Asian country and many European countries, after the mortgage crisis.

Portugal and Spain are clear examples of this reaction. For the United Kingdom and the United States, political uncertainty is high and growth prospects are trending downward. On the other hand, deflationary forces still persist in Italy and France.

Thus, in countries with high-income economies there are possible factors of global instability and heterogeneity. However, in general, progress is being made to recover what was lost in previous years.

Productivity in agriculture

Investment in research and development (R&D) is a major driver of productivity growth in agriculture. In high-income countries, such as the United States, Australia, and France, increased productivity typically accounts for almost all growth in agricultural production.

In high-income countries, governments have tended to invest a relatively high proportion of their total public spending on research and development in agriculture.

One reason is that technological innovations, such as new seeds, are often difficult and expensive to develop. However, they are then relatively cheap to distribute and copy.

A second reason is that the farms are generally too small to conduct your own research. Even today's large farms are mostly small businesses.

However, as agricultural Gross Domestic Product (GDP) has fallen to a small share of national economic output in high-income countries, the share of agricultural R&D in total public spending has followed suit.

Research and development spending

Until recently, public spending on agricultural R&D in high-income countries could still grow at least as fast or faster than agricultural GDP. However, this trend was reversed in many high-income countries after the global financial crisis of 2008-09.

Between 2009 and 2013, after adjusting for inflation, total agricultural R&D spending in these countries fell by almost 6%. This is the first sustained decline in more than 50 years.

If this decline in R&D investment continues, productivity growth and agricultural production may eventually decline.

Changes in the labor market and the rise of automation

Researchers claim that 73% of the time humans are paid for now is spent on activities that could be automated with existing technology.

In addressing this, the StudyPortals report said leaders will need to rethink the purpose of higher education in shaping students for the future world of work.

After many decades of continued growth in college degrees, undermining intermediate and mid-level skills, some reversal may be seen. This is because skilled manual labor, such as cooks, plumbers, or electricians, will be among the most difficult to automate.

On the other hand, many occupations at the university level, such as law, accounting and journalism, are already being put on hold.

Institutions must prepare students to be entrepreneurs and with the capacity to continue learning. They must reinvent themselves and their careers multiple times in their lives.

Life expectancy

In a study carried out in member countries of the Organization for Economic Cooperation and Development, all the specific causes of mortality available in 2014-2016 were analyzed.

Most high-income countries experienced declines in life expectancy during 2014-2015. The average decrease was 0.21 years for women and 0.18 years for men.

In most countries, this decline was primarily due to mortality in the elderly (over 65 years). Also in deaths related to respiratory, cardiovascular, nervous system and mental disorders.

In the United States, the decrease in life expectancy was more concentrated in those under 65 years of age. Drug overdose and other external causes of death played an important role in reaching this decrease.

Most of the nations that during 2014-2015 saw decreases in life expectancy, during 2015-2016 saw solid increases in life expectancy. In this way they more than offset the decreases.

However, the United Kingdom and the United States appear to be experiencing continuous declines in life expectancy. This raises questions about future trends in these countries.

Emerging Asia

Another important factor is Asia's perseverance as an engine for global growth. Despite the profound organic changes that are taking place in the region, that territory does what is necessary to grow up to two and three times faster than countries with high-income economies.

On the one hand, there is India, which in the next few years could even grow above 7%.

On the other side is China, which is in a process of rebalancing both demand, where consumption contributes more to growth than investment, as well as supply, where the service sector contributes 50% of GDP. Ten years ago it was barely over 40%.

This results in growth of over 6%. Between these two countries there is a population greater than 33% of the entire world population.

References

1. The Bmj (2018). Recent trends in life expectancy across high-income countries: retrospective observational study. Taken from: bmj.com.
2. Shalina Chatlani (2018). 8 global trends impacting higher ed. Taken from: educationdive.com.
3. Paul Heisey and Keith Fuglie (2018). Agricultural Research in High-Income Countries Faces New Challenges as Public Funding Stalls. USDA. Taken from: ers.usda.gov.
4. Wikipedia, the free encyclopedia (2019). World Bank high-income economy. Taken from: en.wikipedia.org.
5. World Bank (2019). World Bank Country and Lending Groups. Taken from: datahelpdesk.worldbank.org.