The Global Economy’s Next WinnersJuly/August 2019 127
nies, such as Adidas, Fast Radius, and Lincoln Electric, have opened
U.S. facilities in recent years. Apple has announced a major expansion
in Austin, Texas, and is planning new data centers and research facilities
in other cities across the United States. Companies based in the devel-
oping world are also investing more in the United States and Europe.
The growth in trade in services is providing another boost for ad-
vanced economies. The United States, Europe, and other advanced
economies together already run an annual surplus in trade in services
o almost $480 billion, twice as high as a decade ago, demonstrating
their competitive advantage in these industries. New technology will
let companies remotely deliver more services, such as education and
health care. Countries that already specialize in exporting services,
such as France, Sweden, the United Kingdom, and the United States,
are in a good position to capitalize on these trends.
Finally, as the developing world gets richer, it will buy more cars,
computers, airplanes, and machinery from the developed world. Ad-
vanced economies send more than 40 percent o their exports to emerg-
ing markets, almost double the share they sent 20 years ago. Those
exports added up to more than $4 trillion worth o goods in 2017 alone.
The picture for advanced economies is not uniformly rosy, how-
ever. Some industries will face Ãerce new competition from the de-
veloping world. Homegrown companies in Brazil, China, and other
middle-income countries are branching out into higher-value-added
industries, such as supercomputing, aerospace, and solar panel manu-
facturing, and relying less on imported parts from the developed
world. Chinese companies are beginning to manufacture the com-
puter chips they used to buy from abroad. (Although for smartphones,
China still imports chips.) China’s total annual imports o intermedi-
ate goods from Germany for vehicles, machines, and other sophisti-
cated products peaked in 2014 at $44 billion; by 2017, the Ãgure was
$37 billion. Japan and South Korea have also seen their exports o
intermediate goods to China in those industries decline. The Made in
China 2025 initiative aims to build the country’s strengths in cutting-
edge areas such as ¬, 5G wireless systems, and robotics.
STUCK IN THE MIDDLE
Middle-income countries, such as Brazil, China, Hungary, Mexico,
Morocco, Poland, South Africa, Thailand, and Turkey, will reap some
o the beneÃts o the new globalization, but they will also face new