While the advanced economies steer through a period of sluggish recovery, the world’s emerging markets are stepping into the spotlight. These economies are no longer just recovering from past shocks, they are becoming growth engines in their own right. In this article for Bidaya, we examine how emerging markets are powering global growth, what structural shifts are driving the dynamic, and what this means for entrepreneurs, multinational firms, and investors. We also identify the opportunities and risks that lie ahead in this evolving global economic landscape.
The Emerging Markets Growth Surge
The most recent International Monetary Fund (IMF) data show that emerging-market and developing economies are projected to grow at about 3.7 per cent in 2025, compared to 1.4 per cent for advanced economies.
Meanwhile, a broader estimate suggests emerging markets contributed around 66.4 percent of global GDP growth between 2015-2025.
This means that even as global growth looks muted overall, the emerging markets are doing the heavy lifting. According to the IMF blog, “the global economy enters a new era,” with these markets playing a larger share of output and growth.
What this means: for business leaders and investors, this shift signals that growth strategies which focus only on advanced economies may be missing the real story. Emerging markets represent not only higher-growth geographies, but also frontier opportunities to innovate, invest and scale.
What’s Driving the Momentum in Emerging Markets
Several structural and policy factors underpin why emerging markets are not just bouncing back, but powering ahead.
1. Demographic and urbanisation tailwinds
Emerging markets tend to have younger populations, faster urbanisation, and rising middle classes all of which create robust domestic demand. For instance, the “Emerging Markets” group (as defined by World Economics) covers more than 4.3 billion people and has a median age of 34.
2. Improved policy frameworks and deeper markets
The IMF notes that many emerging economies have stronger institutions, more credible central banks and deeper capital markets features which reduce vulnerability to shocks and support growth.
3. Diversification away from commodity-dependence
While some emerging markets still lean heavily on natural-resource exports, others are transitioning into manufacturing, services and tech export hubs. The strategic shift away from pure commodity dependence helps stabilise growth.
4. Global value-chain realignment and regionalisation
As global firms reassess supply-chains (driven by geopolitical risk, trade frictions and pandemic-lessons), many are relocating or expanding into emerging markets that offer low-cost labour, infrastructure investment and regional market access. This means emerging markets are not only consumer markets but also production and export platforms.
5. Domestic innovation and leap-frogging
Emerging economies increasingly leverage digital technologies, fintech, renewable energy, and mobile infrastructure often leap-frogging older stages of development. This innovation-led growth is less visible in advanced markets, giving emerging economies an edge.
Data point: The IMF’s July 2025 Update flagged an upward revision in emerging-markets growth to 4.1 per cent, driven by an improved view of China and other large economies.
These drivers combined create a powerful platform for growth that goes beyond simple rebound from earlier shocks.
Case Studies of Emerging-Market Leadership
India: Manufacturing, services and scale
Consider India. With a growth forecast putting it among the fastest-growing major economies globally, India is expanding both domestic consumption and export capacity. For firms looking to scale regionally, India offers a combination of abundant human capital, aggressive infrastructure investment and a government pushing “Make in India” and digital-economy initiatives.
Southeast Asia: Regional growth hubs
Countries such as Indonesia, Vietnam and the Philippines are increasingly handling manufacturing shifts away from China, while growing domestic middle classes fuel consumption. Emerging‐market status doesn’t preclude becoming a regional production and consumption node.
Latin America: Monetizing commodity + tech transitions
Emerging markets in Latin America, such as Brazil and Mexico, have the advantage of natural-resource endowments and are increasingly leveraging renewable‐energy, agritech and digital platforms to diversify their economies.
These real-world examples underscore the key point: emerging markets are not all the same, but many share common dynamic features scale, innovation potential and structural transformation.
Opportunities for Entrepreneurs and Investors
Given the above trends, what are the actionable opportunities?
• Tap consumption in growth-markets
With middle-class expansion in emerging markets, companies that tailor products and services to these segments can gain disproportionate growth. Think services for urban millennials in Africa or Southeast Asia, not just luxury branding aimed at advanced economies.
• Invest in infrastructure and digital transition
Many emerging markets still face infrastructure gaps. For entrepreneurs in fintech, telecoms, logistics, clean-energy or smart-cities, these gaps represent growth platforms. Investors can gain exposure via private equity, venture capital or partnerships.
• Leverage supply-chain diversification
Manufacturing and export-services are shifting. Multinationals can build or partner with local firms in emerging markets to access low-cost manufacturing, regional markets and trade-diversified platforms. Start-ups may leverage the same local ecosystem.
• Explore regional trade blocs and intra-emerging-market flows
Emerging markets increasingly trade among themselves creating regional value chains independent of advanced economies. Understanding and leveraging these intra-emerging-market linkages can open novel opportunities.
• Align with sustainability and climate agendas
Emerging markets face urgent climate-adaptation and decarbonisation needs. Entrepreneurs and investors who bring clean-tech, green-finance solutions are well placed to ride this wave.
Risks and Guardrails for Growth
While emerging markets hold promise, there are meaningful risks and caveats to track.
• Global headwinds remain
Global growth remains modest the IMF projects roughly 3.2 per cent for 2025 overall, reflecting ongoing drag. Tighter global financing, trade tensions or commodity-price shocks could disproportionately hit emerging economies. The IMF has warned of downside risks.
• Heterogeneity and structural constraints
Emerging markets are not a monolith. Some suffer from weak institutions, governance issues, high debt, volatile currencies and fragile financial systems. Growth may be uneven and volatile.
• External financing and debt vulnerabilities
While improved policy frameworks help, many emerging markets still operate with limited fiscal buffers. Tighter global funding (e.g., higher U.S. interest rates) can raise borrowing costs and constrain growth.
• Trade-policy, geopolitics & supply-chain risk
Emerging markets can benefit from supply-chain shifts, but they can also be vulnerable to trade frictions, sanctions, commodity-price swings or regional instability. These must be factored into risk models.
• Execution risk in building new capabilities
Moving from commodity-based growth to high-value manufacturing or services requires effective policy, infrastructure and human-capital investment. Execution delays or mis-steps may blunt growth potential.
Conclusion
Emerging markets are no longer simply recovering they are driving the next phase of global growth. For global entrepreneurs, investors and multinational firms, this means a strategic pivot: growth will increasingly be found in dynamic emerging-economy ecosystems. Embracing this shift requires being attuned to local market nuances, structural strengths and risks.
Actionable take-aways
- Prioritise emerging-market geographies in growth planning: scale matters.
- Align with infrastructure, digital and consumer-demand trends in these markets.
- Factor in regional inter-linkages and intra-emerging-market trade flows.
- Maintain robust risk-management frameworks for financing, governance, trade and geopolitics.
- Monitor policy shifts, institutional strength and execution risks in local markets.
Looking ahead, if emerging markets can continue to deepen institutions, expand innovation-ecosystems and diversify away from legacy sectors, they stand to reshape the global economy. The time for global players to engage not just observe is now.
