From the WEF's Agenda page:
The world is now facing what observers are calling a “synchronized”
growth upswing. What does this mean for the economic “convergence” of
developed and developing countries, a topic that lost salience after the
Great Recession began a decade ago?
In the 1990s, developing economies, taken as a whole, began to grow
faster than their advanced counterparts (in per capita terms),
inspiring optimism that the two groups’ output and income would
converge. From 1990 to 2007, the developing economies’ average annual
per capita growth was 2.5 percentage points higher than in the advanced
economies. In 2000-2007, the gap widened, to 3.5 percentage points.
Though not all countries made progress – many small economies did
not do well – on an aggregate basis, the structure of the world economy
was being transformed. Asian countries were catching up at a
particularly rapid clip, driven by the large, dynamic economies of India
and, even more so, China (which experienced nearly three decades of
double-digit GDP growth).
After the global financial crisis began in 2007, however, the
dynamic changed. At first, it seemed that convergence was accelerating.
With advanced-economy growth having ground to a halt, developing
countries’ lead in per capita growth increased to four percentage
points.
By 2013-2016, however, growth slowed in many emerging economies –
particularly in Latin America, with Brazil experiencing negative growth
in 2015 and 2016 – while growth in the United States picked up. Are we,
as some observers have
claimed, witnessing the end of convergence?
The answer will depend on developing economies’ ability to find and
tap new, more advanced sources of growth. In the past, the key engine
of convergence was manufacturing. Developing countries that had finally
acquired the needed skills and institutions applied advanced-country
technologies locally, benefiting from plentiful, low-cost labor.
But, as Dani Rodrik has argued,
that source of easy copycat catch-up has mostly been exhausted. The
low-hanging fruit in manufacturing has already been picked.
Technological catch-up is more difficult in the services sector, which
now accounts for a larger share of total value-added....MUCH MORE
